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How Fast Can Agents Expect A Return On Insurance Leads?

How Fast Can Agents Expect A Return On Insurance Leads?

One of the questions I’m asked quite frequently is, “How fast can I expect a return on insurance leads?” Agents spending money on leads want to know when they’ll have something to show for it—and rightly so.

How fast you can expect an ROI depends not only on the overall quality of the leads, but on what type of agency you have and your goals. (Tweet This!) For example, internet leads are great tools for some short-term goals, like growing policies and your book of business. But they can also be used for long-term retention, for year-over-year growth. Here’s how we break down different timelines based on an agency’s growth stage.

Insurance Leads For Agents In Hyper-growth Agencies

ROI Timeline: Agents expecting to see growth in 1-3 months.

Hyper-growth agencies are often looking to get quick returns on insurance leads. If your focus is on increasing the number of customers you write month-over-month and not on retention, you may fit into this category.

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Variables for how quickly you’ll see an ROI on insurance leads include:

  • The carrier you’re with.
  • If your agency has shown growth in a carrier ranking system, there is a higher likelihood you’d begin to see a relatively quick return on leads. Some carriers have a scorecard that shows year-over-year growth, i.e., last year’s growth vs. this year’s growth. If you can see this, odds are good that you’ll get an immediate impact from insurance leads.
  • If your sales process is optimized, your ROI on internet-based insurance leads could be seen monthly. In my experience, generally, the majority of short-term, growth-seeking agents see growth in about one to three months; the remainder will likely see growth in three to six months.

Insurance Leads For Agents In Retention-based Agencies

ROI Timeline: Agents see growth in 6-12 months.

The majority of agents fit into this model. They care about the next contract, but they don’t want to write contracts with customers who are not likely to retain past the first 6 to 12 months. In this situation, seeing an ROI takes a bit longer, and that is to be expected. For long-term, consistent growth, you’re looking at a cycle of about six months to a year (or even more) depending on your operations and how quickly you can close leads. Here’s why:

An agent who signs on a customer with a six-month premium of $1,200 gets about 10% of the premium, or $120. If the agent is buying leads from EverQuote, their cost-per-acquisition (CPA) ends up being $150; because the customer signed a six-month policy, the agent is actually down $30 in the first six months. However, after the first six months, when the customer is ready to reup his or her contract for the second half of the year for another $120, a positive ROI comes after the second six months. But the ROI continues to grow the longer an agent keeps a customer, which is where the value of purchasing high-quality insurance leads comes in.

If you’re not accustomed to working internet leads and your CPA ends up being really expensive, it could take a long time to see an insurance marketing ROI. That’s why it’s so important, if you’re using internet leads, to have a proven process in place.

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The Key Takeaway

To know where you need to be from an ROI standpoint, you must understand your metrics as an agency owner. Top agents like Perry Olson know what they’re going to spend money on. When Olson invests in internet leads, he knows he won’t see an ROI for several months—and he anticipates and budgets for it. This is in stark contrast to other agents, who buy leads for a couple months, don’t see an immediate jump, and quit—effectively throwing money away. Also, remember that these are all “rules of thumb” based on my experience – every agency is different. But after working closely with hundreds of agents over the years, I think the vast majority fall into these buckets.

If You’re On The Fence About Internet Insurance Leads...

Here’s the bottom line: You cannot ignore internet insurance leads. In today’s world, according to J.D. Power’s research, 74% of insurance shoppers start searching online. Even if you are established in your community, internet leads are the perfect way to gain incremental business month-over-month. You know your walk-ins and referrals aren’t going to change, so you need to do something a little outside of the box. That’s where EverQuote comes in.

At EverQuote, we know our 100% originally-sourced leads aren’t right for every single agent—and that’s OK! But if you’re an agent looking to have more control over how you scale and grow your book of business, EverQuote can definitely help.

When you’re ready to move your agency from good to exceptional, give us a call. We’ll show you how EverQuote leads can equip you to do it, and we’ll stand alongside you as you find the right mix of leads to help you grow. Let us show you how—contact us now!

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Topics: Insurance Lead Generation, Featured

About the Author Ben Wang, VP of Customer Success

Picture of Ben Wang, VP of Customer Success

Ben joined EverQuote in 2015 as a Director of Strategic Accounts, then transitioned to lead one of the Customer Success Teams before becoming VP of Customer Success. Ben has over 15 years of Performance Marketing and Online Lead Generation experience across multiple verticals, and he holds an MBA with a concentration in Marketing Management from The Whitman School of Management at Syracuse University.

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