Buying Leads is a Numbers Game
True baseball aficionados love to argue statistics. If you ask who was the best hitter, you might hear Ty Cobb, Roger Hornsby or Stan Musial. All three are in the running because of specific records: highest lifetime batting average, highest single-season batting average and highest number of batting titles, respectively. Another name that is also often in the running is Ted Williams.
By any measure, he was one of the best hitters to ever play the game, landing near the top of the records list in several categories. Yet, like the other top hitters, Ted Williams’ batting average tells us he failed more often than he succeeded.
His lifetime average was .344, and his best single-season average was .406 in 1941. This means that even when Ted Williams was playing his best, for every 10 at-bats, there were six times that he either struck out or didn’t hit the ball. And he barely made that percentage. He went into his last day of the 1941 season—a double-header against the Philadelphia Athletics—at .39955, resolved to break the .400 mark.
“I kept thinking about the thousands of swings I had taken to prepare myself,” he later said. “I had practiced and practiced. I kept saying to myself, ‘You are ready.’ I went to the ballpark the next day more eager to hit than I had ever been.”
Think about that. His goal, a feat that has not been achieved in 75 years by any player since, was to finish a season being able to boast that he had only missed six out of 10 times.
There is a tendency to think of success as a more-often-than-not concept, that a person must accomplish something the majority of the time for them to be successful. For hitters, though, success means something different—it means practicing and honing their technique in order to be “fail” less often. It means redefining success to acknowledge that missing the ball or striking out are just part of the game.
At Hometown Quotes, the most successful agents we work with take a similar view about working leads. They understand that working with leads is a numbers game, and that their efforts to gain new customers will fail more frequently than they will succeed. This is not because they aren’t good salespeople. It’s more about the huge amount of information and choices available to consumers.
So the heavy-hitters in the insurance business practice and hone their client pitches. They also look at their own statistics to develop a long-term game plan. This means tracking lead costs and resulting sales. By doing this, it is possible for agents to determine a cost-per-acquisition amount on the leads they buy.
The cost part of the equation is pretty simple: divide the number of leads bought by the cost to purchase them. Reckoning the acquisition amount—the sales acquired as a result of those leads—is a bit more complicated. Most obviously, there is the initial commission earned on a policy sold to a lead. In addition, though, agents should also track any subsequent commissions earned as a result of additional policies sold, both to the original customer and to any referrals that came from that customer—the idea being that they would not have made those additional sales without finding the customer in the first place through a lead. Once an agent gets a feel for their cost-per-acquisition, it can be very instructive in helping to figure out how many leads to purchase going forward.
One of the biggest mistakes agents make when starting to work with leads is giving up too soon. Just like in baseball, there are going to be a lot of swings and a lot of misses. Sales will be strong some months and weak others. That’s just the nature of the sales game.
The lead experts at Hometown Quotes provide direct support to help agents succeed, offering great tips and advice to help you hone your sales techniques. Whether you’re ready to try leads for the first time or want to see if you can start to work them more effectively, we’re available to help. Call us at 1-800-385-7869 or Click Here to find out more.