How Shared Lead Companies Make Money

There is a cost to generating a life insurance lead. Typically the cost for a life insurance lead company to generate one lead is $18-$22.  If that lead is exclusive, it will be marked up so that a profit can be made on the production of that lead. That typically puts exclusive life insurance lead costs anywhere from $25-$35 a lead. Not much of a mark up……

With a shared lead company, the cost is typically the same but the difference is they are selling the same lead to 8-10 different agents who are all competing for the same piece of business. So let’s do the math. The cost to produce a lead is $18. The shared lead company will sell that lead for around $15. However it is sold to multiple agents and for this argument lets say 10 agents. Well that one lead cost $15 to produce but made the lead company $150 gross and netted $135! ($15 a lead x 10 agents – $15 to produce = $135). Now that is a profit!

The point is many new agents who never bought leads before buy leads strictly on price versus paying a little extra for quality. So what happens is they buy the cheap $15 shared leads but will never sell a dam thing because they are competing with 10 other agents. They are pretty salty and angry with lead companies by the time they come to us and buy our leads. Here is the thing with shared leads, the prospect gets so aggravated and angry because the phone rings off the hook with ten agents calling one after another that when you talk with them they may just hang up on you.

Yes, exclusive leads are a tad more expensive but not by much when you think about how many policies you will sell when you are the only agent chasing down the business.

Bottom line, pay $5 or $7 more a lead and get better results!! Exclusive leads will generate more production!

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3 Responses to How Shared Lead Companies Make Money

  1. Whitny Stepman says:

    Damn, pretty interesting topic. How will I find this RSS?

    Whitny Stepman

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