The proliferation of online lead generation sites has presented promise and peril to insurers.While aggregators may provide an instantaneous connection to consumers, they also can engender back-end technology obstacles for carriers, who must sift through duplicate leads and ensure data integrity.
In addition to technical impediments, carriers using the Web to elicit new business face difficulty integrating those leads with the existing distribution channel-without disrupting or alienating the agent force.
Also, no matter how many leads are generated, even the most promising will likely perish for want of effective follow up. State Farm captive Kirk Fuqua is a case in point, using 10 aggregaotrs to generate about 500 leads monthly, 40% to 60% of which are converted into policyholders.
It's no secret that Web is playing an ever-greater role in auto insurance marketing. After all, consumers predominantly shop for auto insurance based on price.
In fact, nearly one in two auto insurance shoppers start their search for a new policy on the Web, either at a carrier site or the many aggregators that provide leads for the carriers and agents, according to a report by Forrester Research Inc. entitled "How to Develop An Effective Multichannel Insurance Distribution Strategy."
And now, Web fever is spreading to life and home insurance. Forrester, in another study, "The U.S Life Insurance Buyer's Journey," says the Web has overtaken agents as the dominant source for researching life insurance, although 90% of the policies are still written offline.
Nonetheless, if consumers are researching on the Web, they can be captured as a lead. And why not: According to Leads360, a Los Angeles-based lead management software and services company, agents average an 8% to 12% conversion rate with Internet leads versus a paltry 0.9% for direct mail.
While other industries embraced the Web a decade or more ago, the insurance industry as a whole woke up to it largely over the past five years. "The insurance industry is never going to be known as an innovator, but they are a fantastic first follower," says Ellen Carney, a senior analyst with Forrester.
As for carriers, they tend to cite the proprietary nature of their Web-based lead generation programs, and guard that information resolutely.
Northbrook, Ill.-based Allstate Insurance Co. says that 60% to 70% of its lead generation is Web-based, and that 70% of that activity is via third-party lead aggregators. The other 30% of its Web-based lead generation is "homegrown." And it claims the conversion rate from homegrown Web-based leads is roughly the same as using third-party aggregators.
The biggest problem with Web-based leads, Allstate spokesperson Raleigh Floyd says, is weeding out lead duplications and the integrity of lead data. "Web-based leads [at Allstate] continue to grow based on consumer adoption of the Web," he says.
CAPTIVE
Over a variety of lines of business, some of the captive agents of Bloomington, Ill.-based State Farm Mutual Automobile Insurance Co. work with Web lead aggregators. One such agent is Kirk Fuqua of the Kirk Fuqua Agency in Edmond, Okla., who says that Web-based lead generation has been his exclusive marketing tool for about three years.
"For me, it is the only marketing I do," Fuqua says. " I do not use direct mail [and other lead generation] programs. I purchase leads from aggregators such as Insureme.com and Netquote.com."
Fuqua uses about 10 aggregators to generate about 500 leads a month, predominantly for auto. The leads are sorted by mailing zip codes in the geographical area around his office. He estimates he pays $7 to $10 per lead, of which 40% to 60% are converted into policyholders.
But there's another reason he likes the Web and, in a word, it's the immediacy. Someone using an aggregator's site is clearly in the market at that moment relative to the query.
"It's immediate and better. With direct mail, you really have to wait for people to respond to you," he says. "It's the way of the world because people really don't have time to go shopping with an agent. The Internet just makes it easy for them, and is the reality of where the market is going. It's being ahead of the curve."
Fuqua adds that being in the Oklahoma City metropolitan area lends itself to Internet leads because consumers are besieged with direct mail and much, if not most, gets tossed into the trash unopened. In rural areas, he notes, consumers get less junk mail, and are more likely to read it. "I know agents in rural areas that still have success with direct mail," he says.
Money spent on leads, no matter how they are generated, is wasted unless there's effective follow up, Fuqua points out. "It's a race to see who's first to [reach the prospect]," he says. "The people that don't have success on the Web don't do good follow up. The key to success is the follow-up over four to five months. If I swing the bat enough times, I am going to get hits."
THE INTEGRATED APPROACH
Independent agent Ken Auerbach of the E&K Agency Inc., in Eatontown, N.J., uses a variety of methods including Web-based leads, to secure business.
Auerbach, who also serves as general counsel and managing director for the agency, says he doesn't believe in chasing cold Web-based leads, so he uses the Internet to warm them up. Thus, he focuses his efforts on an integrated approach he calls "soft advertising," which includes a Facebook fan page, an auto insurance microsite and search engine optimization.
The auto insurance micro site, www.e-kautoinsurance.com promises personalized agency service and quotes from multiple carriers (the logos of Progressive, Travelers and Selective are on the microsite home page). In a sense, this makes E&K its own localized Web-based lead aggregator, but with a twist to serve the unique needs of his coverage area.
"We think it's important to create awareness in the community of who you are so when you call, they say, 'I know you' or 'I'm familiar with you,'" Auerbach says. "It's much more targeted than putting up a billboard [for] everyone who drives by."
The Facebook page serves to build the brand, but also to create affinity with prospects and clients through humor. For example, E&K's "friends" are encouraged to publish pictures of their pets.
"We realized that, particularly with Facebook, you can't just be selling yourself," Auerbach says. "It's called social media for a reason. You have to be funny, humorous and have an empathetic element. People started [posting] funny comments about their pets. It's a little quirky, but it really gets people's interest."
Auerbach also optimizes his sites for search engines and is training his salespeople how to use LinkedIn. "We've bought leads like everyone else, but have found they work better slightly warmed instead of super cold."
FINDING THE RIGHT ONE
Naturally, lead aggregators will tell you, hot or cold, Internet-based leads are taking over insurance marketing.
"Consumers have gone to Internet as their primary way of finding insurance products," says Jon Kelly, VP of insurance at QuinStreet Inc., the parent company to lead aggregator Insure.com. "That's where they do their research, and that is driving the process. Yellow Pages have fallen off the face of the earth. Newspapers have been in decline. Direct mail has not been hit as hard, but it's getting harder and harder to do."
Kelly, who's been in the online insurance marketing for a dozen years, has tips for agents using Web-based lead generation. First, they should experiment with aggregators because some specialize in certain geographies or certain lines of insurance.
"They should check and test the aggregator, and find the ones that work best for them," he urges. "Try to focus on lead quantity where you can react quickly and call the consumers within minutes." His message: Agents should not get 100 leads a day when they can only effectively service 20.
It's clear many carriers depend heavily on Web-based lead generation even if they aren't willing to talk about it in detail.
"Many carriers advertise on our sites," says Kelly. Indeed, a check of Insure.com's auto insurance page carries GEICO and Allstate ads. Its commercial vehicle insurance page links directly to Progressive, and its business insurance page carries the logos of Allstate, Nationwide, Farmers, The Hartford and American Family Insurance.
NEED FOR SPEED
Another way to glean how carriers use aggregators is to speak with Hussein Enan, chairman and CEO of Insweb.com, based in Gold River, Calif. An aggregator, Insweb claims about 10 million insurance consumers visited its site in 2009 looking for answers to their insurance questions.
"The consumer comes to us, fills out and sends the forms to the agents and carriers interested in that profile," explains Enan, adding that each lead is usually sent to a total of four agents and/or carriers. "All leads are fresh to the second."
The immediacy of Web leads goes hand-in-hand with a fast response by the carrier or the agent. The trick is to be persistent in follow up without being annoying. Leads360's research shows that faster and more persistent response dramatically raises the possibility of turning a prospect into policyholder.
"If you are not following these general best practices, you are wasting money on leads because the chances are one of your competitors is," says Jeff Solomon, one of Leads360 founders and its SVP of marketing. "Only about 55% of the conversion relates to the quality of the lead."
In its own study of 25 million leads, Leads360 found that speed is the top conversion driver. Chances of conversion rise 391% if the lead is called within a minute of their expression of interest; 120% within two minutes; 98% in under three minutes; 62% in under 30 minutes; and 36% in under an hour.
So where does the newfound prevalence of Web-based leads leave agents? Fuqua says he's sold on the Web as the place where consumers start their research. Likewise, Forrester's Carney does not see the Web undermining the role for agents. "People like to engage and go to the agent for a conversation that they can't have in an interactive chat on a website," she says. "They perceive the agent as someone they trust." INN
John Dodge is a freelance writer based in West Newbury, Mass.
