What is your approach on utilizing leads? Are you sure that you are handling them correctly? This article is here to present to you a very interesting justification of how leads work and how you can leverage your sales by understanding the process using a proven economic approach.
The 80/20 Principle
An economic principle which states that 80% of the output is primarily due to 20% of the input, the 80/20 principle gives a very interesting perspective on how the business world works. In the early 20th century, the Italian economist Vilfredo Pareto discovered that 80% of the land in Italy is owned by 20% of the population. This remarkable discovery was exemplified when he found out that this distribution is actually universal. Since then, a number of research and economic studies were conducted, and results recognized that the 80/20 principle is applicable to every strand of the business world.
Considered a breakthrough idea, the 80/20 principle works efficiently in ensuring the swift conversion of leads to policy buyouts. As statistical results are now being analyzed, it was found out that the 80/20 principle is very much applicable on the process of leads to insurance sales conversion. Three of the main facets of leads and insurance sales are quality, timeliness and marketability.
Quality of Leads
A very particular aspect, which is considered vital by insurance agents, is the quality of leads. If you are able to grab high quality leads, your chance of converting them to policy buyouts is superbly maximized. Now, here is something interesting. It was found out that on an average 20% of the actual leads comprise 80% of the buyouts. What does this mean? Let's go straight to the point. If you are able to grab high quality leads, you can expect a conversion rate of about 20-30%. Now, how can we achieve this percentage of conversion? The answer is relying on exclusive leads. While shared leads can generate substantial sales conversion, you cannot disregard the fact that these leads are shared by a lot of agents.
A good way of showing how efficient leads can be is by comparing it to other insurance marketing methods. Cold calling relatively generates 2.5-5% conversion or roughly 5-10 buyouts on 200 calls. While no empirical data can present the actual impact of advertising, it is a costly method which will reduce your profit to a lower percentage. Leads are remarkably good, but simply relying on it will not give you the assurance. You must understand that other factors including timeliness are also vital.
Another application of the 80/20 principle is on how you handle leads with respect to timeframes. The faster you check each lead the greater chance you will have on selling a policy to a client. Putting it simple, 20% of the time you spend with a client is responsible for 80% of the chance that the client will buy a policy from you. This crucial 20% is on how you determine the needs of the client and select the most appropriate plan that is able to meet his needs. Timeliness also includes how you deal with each lead swiftly.
The third facet that agents are totally aware of is marketability. Your policies may be identical in most part, and you might be thinking that each one is as marketable as the other. This assumption is actually lacking its merit. Recent probes revealed that 80% of you sales comes from 20% of you product. While you can actually determine the best 20% of your product by going through your sales statistics, you cannot market the most appropriate one without getting enough information regarding the client before having an appointment with him. It is at this point that exclusive insurance leads get to fill the gap. Exclusive insurance leads contain substantial information about your prospected client and his needs making it easier for you to prepare and present the best policy efficiently.
From Leads to Sales
While there is this extra mile advantage when you get to apply the 80/20 principle in selling insurance, you must still have the right resources for it to work well. By relying on exclusive insurance leads, you can suffice this requirement and achieve better conversion ratio. Leads are the best marketing tools when selling insurance, and for you to maximize its value, getting exclusive insurance leads is a must.