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I've been having some discussions with folks about leads offline a bit and I thought I'd run it by you fine folks.
As I previously mentioned, I'm considering offering telemarketing service. I am going to be getting much more aggressive with telemarketing, the question is if I'm going to work with agents/agencies or if I'm just going to continue to keep everything in-house. This leads me to my question:
If you had a direct mail piece that was guaranteed to pull 1%, that would probably be a fair deal, right? Most folks seem to agree that it is. Based on a $400/1,000 cost that means each lead card is going to cost $40. They may or may not qualify on health, finances, or even actually be interested. Out of the 10 leads you'd have some that are junk off the top, so let's say you sit with half of them, that means you've paid $80 per appointment PLUS you had to actually call to set the appointments and work them. At this point I'd suspect you're saying "wait a minute, a guaranteed 1% doesn't sound like a good deal anymore." Right?
I think an intrinsic flaw in the notion of telemarketed leads (as I've said before) is the believe that they can be generated and sold on a per lead basis with some measure of quality control/filtering. All the time agents say "I won't pay for a lead unless I know..." then finish the sentence with whatever qualifications. In my experience and opinion, I don't believe that a telemarketers job is to do anything by find interest. Not to qualify, not to get banking information, not to do any of a list of a bunch of other things. They should find interest people, ask a few basic questions, and then pass the lead on. If you want a good telemarketer, you have to pay $10-$15/hour. No way around that. Recruiting telemarketers to a per appointment pay structure just doesn't work. Let's say it takes 3 hours to generate a good lead and the telemarketer was getting paid $10/hour. At anything less than $30/lead it's guaranteed the lead generation company would be losing money. I've had telemarketers call in areas where it was easy enough to generate a good FE lead in less than an hour, in other areas it can take all day and still not get anything. That, I believe, is the intrinsic flaw in the notion of paying per lead. No telemarketing company can predict the true cost of a quality lead so they can't sell it on a fixed price and be sustainable.
So back to my direct mail comparison, at a guaranteed 1% response rate on lead cards that means $40/lead card whether they have any interest, include their number, have money, qualify, are actually interested, etc. At the $40 price point per lead matching the quality of a direct mail card I think is much closer to being viable.
I know JD says that telemarketing doesn't work long term for FE, but if agents were paying in line with the way they were paying for direct mail leads, I think it could be viable. If agents want to keep sticking to paying per lead at unrealistically low prices expecting the leads to be waiting with the checkbook (being slightly facetious), I think we're going to keep seeing the same thing happen every time, which is that no FE lead company is coming through with anything reliable.
Your thoughts?
As I previously mentioned, I'm considering offering telemarketing service. I am going to be getting much more aggressive with telemarketing, the question is if I'm going to work with agents/agencies or if I'm just going to continue to keep everything in-house. This leads me to my question:
If you had a direct mail piece that was guaranteed to pull 1%, that would probably be a fair deal, right? Most folks seem to agree that it is. Based on a $400/1,000 cost that means each lead card is going to cost $40. They may or may not qualify on health, finances, or even actually be interested. Out of the 10 leads you'd have some that are junk off the top, so let's say you sit with half of them, that means you've paid $80 per appointment PLUS you had to actually call to set the appointments and work them. At this point I'd suspect you're saying "wait a minute, a guaranteed 1% doesn't sound like a good deal anymore." Right?
I think an intrinsic flaw in the notion of telemarketed leads (as I've said before) is the believe that they can be generated and sold on a per lead basis with some measure of quality control/filtering. All the time agents say "I won't pay for a lead unless I know..." then finish the sentence with whatever qualifications. In my experience and opinion, I don't believe that a telemarketers job is to do anything by find interest. Not to qualify, not to get banking information, not to do any of a list of a bunch of other things. They should find interest people, ask a few basic questions, and then pass the lead on. If you want a good telemarketer, you have to pay $10-$15/hour. No way around that. Recruiting telemarketers to a per appointment pay structure just doesn't work. Let's say it takes 3 hours to generate a good lead and the telemarketer was getting paid $10/hour. At anything less than $30/lead it's guaranteed the lead generation company would be losing money. I've had telemarketers call in areas where it was easy enough to generate a good FE lead in less than an hour, in other areas it can take all day and still not get anything. That, I believe, is the intrinsic flaw in the notion of paying per lead. No telemarketing company can predict the true cost of a quality lead so they can't sell it on a fixed price and be sustainable.
So back to my direct mail comparison, at a guaranteed 1% response rate on lead cards that means $40/lead card whether they have any interest, include their number, have money, qualify, are actually interested, etc. At the $40 price point per lead matching the quality of a direct mail card I think is much closer to being viable.
I know JD says that telemarketing doesn't work long term for FE, but if agents were paying in line with the way they were paying for direct mail leads, I think it could be viable. If agents want to keep sticking to paying per lead at unrealistically low prices expecting the leads to be waiting with the checkbook (being slightly facetious), I think we're going to keep seeing the same thing happen every time, which is that no FE lead company is coming through with anything reliable.
Your thoughts?