Insurance agents of old knew what far too many have forgotten in the Internet age: Quality — not quantity — is what matters when seeking new business.

Before the digital age, most leads arrived at your desk via a customer referral or a direct call (on your rotary phone). You'd set up an appointment with the lead, followed by a few question-and-answer meetings, and eventually make an in-person sale. Hands were shaken, backs were patted, and you closed up your Main Street office to get home for 5 o'clock supper.

It was a nurturing process, focused on developing quality relationships with buyers to guide them through their individual purchase journeys.

Today's reality

With the rise of online lead generation, carriers and agents have access to the information of more potential customers than ever before. So why not take advantage and pay for as much of that information as your budget will allow? After all, more customers means more business, right? 

In reality, the opposite is true. Despite the increased speed of getting a lead's information, lead cultivation still requires a significant investment of time and resources for insurance agents and carriers — without any guarantee of more profits. And because the method of getting a lead's information is less direct than a customer walking into your mom-and-pop corner agency, the number of leads who won't convert is higher.

In order to get the best return on investment for digital lead generation, your strategy needs to focus on improving the quality of the leads, not the quantity, so every interaction has real potential for conversion.

Lead funnel(Photo: Thinkstock/Olivier Le Moal)

Less is more

When carriers and agents get a large number of low-quality leads, they'll see an increase in their cost per sale because of the time involved in culling through the list to close a few deals. Carriers and insurance agents then want to pay less and less for leads as their costs increase. The quality of leads continues to fall, and an inefficient — and costly — cycle continues.

The most effective lead generation strategy disrupts this cycle and serves up relatively low numbers of deeply qualified leads with an increased probability of becoming paying customers. Improving quality is about finding the right people at the right time. You will spend more upfront for a quality lead, but the cost to close a sale will deliver a better return on investment than working tons of low-quality leads that will never convert. 

Modernize where needed

Carriers and agents should take a lesson from older generations in the quality vs. quantity debate. But when it comes to working a lead, times have changed. Today, prospective customers can find answers about any given topic with a quick Web search, making the multi-appointment, question-and-answer process with an agent slow and unnecessary. And a week of time between learning about a lead and having your first sales conversation is, in today's landscape, an eternity. If you don't follow up with a lead immediately, someone else will. 

Here are four strategies you can use to increase the likelihood that your qualified leads will convert:

  • Think speed. Businesses that follow up within five minutes are nine times more likely to convert Web leads. Take this timing into account when you establish your follow-up and customer management systems. Use speed to get to your prospect before the competition.
  • Focus on customer relationship management. A single call or e-mail is not enough. Once you have a quality lead, the best chance of closing the business lies in a dedicated, multitouch process across mediums with personalized messages that emphasize the individual's details. After following up, add the lead to your customer relationship management system, and connect with him or her regularly. Just because a lead didn't close today doesn't mean he or she can't be sold six months from now.
  • Develop a quote system. Implement a system that allows customers to adjust quotes on their own with different coverage and pricing options. This allows the customer to feel comfortable, in control, and informed so you can reach out and quickly finalize the sale.
  • Test multiple lead vendors. Diversify your lead generation portfolio by testing multiple lead vendors. After six months, determine the return on investment for each vendor, and make allocation decisions based on the data. Take into account how the vendor treats returns and credits, as well as how responsive the company is to your requests.

If you're reluctant to increase your upfront investment to generate fewer leads, do the math. Higher-quality leads come at a higher initial cost, but the resulting sales will pay higher dividends. 

Zach Robbins is the co-founder of Leadnomics, a Philadelphia-based digital marketing company. He specializes in performance marketing, website optimization, lead generation and marketing technology. 

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