A closer look into buying leads online

A closer look into buying leads online

I often ask companies how they are currently generating their sales leads and have found that many companies are paying for leads online. This surprised me. It turns out that most of the agents I spoke with don’t know much about their online leads other than the (rather inconsistent) conversion rate and corresponding ROI. I decided to dig into online quotes a little more and discover what exactly it is the agents are paying for.

Where are the leads are coming from?

Direct online searches

A large amount of leads online are a product of direct online searches. Prospects enter keywords into a search engine and press enter. For every search there are companies paying money per click via Adwords to Google. After a prospect clicks on an ad they are brought to a website where they usually fill out a quote for insurance. After the quote is recorded it is then sent to a database where it is distributed to agents based on region, insurance type, or company affiliation.

People searching for a particular insurance have a direct and immediate need. The leads begin to degrade as prospects do not stop with a single quote. They will fill out several quotes attempting to get the best deal. Therefore several lead companies often get the same contact information and the same lead is sold to several agents.

Related websites

People online reading material related to insurance may be shopping around themselves. For this reason many sites that provide information for free will find a way to gather a reader’s contact information. Depending on the online source this could be a qualified lead or account for many of the junk leads agents purchase.

Public data

There are also companies online that sell leads that are based on demographics and public data. An example are services that scan the dates homeowners purchase a property. Knowing that insurance policies have a standard duration they can provide agents with a list of people in an area that may be shopping for a new policy.

How are the leads are collected?

There are many insurance lead companies and each claim to provide the most qualified leads. These companies focus mainly on direct online searches and related websites. They will create several websites and use analytics to increase their yield on Adwords. They will then ask a customer to fill out for a quote with their custom form. The quote is provided and then the lead is sold (keep in mind this happens several times for each prospect and is often split between insurance lead companies).

These companies also offer affiliate programs where they will pay websites that have high traffic (either through SEO or Adwords) to provide them with leads. After a simple cross check against their existing list they will front money for the lead. At this point they turn around and act as the middleman between the generated lead and insurance agent. Of course, a generous markup is attached.

Is there a better way?

Although it is interesting to understand where the leads are coming from the most important question is: are they providing agents with a positive ROI? Most will hastily answer yes. But I would challenge them to look more critically and consider other options, and here’s why.


When an agent is dependent on purchasing leads online they lose autonomy. A part of their revenue relies on the quality, availability, and price of leads from an outside source. As the market online changes their business is partly dependent on the direction these companies take. Agents that think of ways to grow organically will be in a much better position as they control their own destiny.

Closer look at ROI

Considering that many agents who purchase leads online usually do not realize a high conversion rate they need to take into account the time it takes to sift through the list. Sales calls take time and time is money. Therefore agents should look a little closer at the ROI by taking their time into consideration as an expense.

At Rocket Referrals we believe there is a better way to realize growth for your company. We will explore some alternatives to purchasing leads in a later post. We will explain how leveraging your current customers for referrals will result in higher caliber leads while cutting down on sales calls so agents can focus on making their customers happy.

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