Insurance Leads Blog

Wednesday, December 18, 2013

Insurance Lead Generation - Behind The Scenes

Insurance leads companies, for too long, have not be up-front and transparent about how their company operates. As an insurance agent, I always wondered why these companies would only divulge small portions of information about their leads and how they are generated. Now that I am aware of how the system works I wanted to share it with my fellow agents out there.

Before I get into the weeds on this, please keep in mind that although you might know a little about how insurance lead companies operate, you do not know exactly how they conduct their business. I have had many agents cut me short and tell me, "Oh, I knew they did that", or they explain to me how the system works according to their knowledge. Do not be naive about the lead industry or you will be taken advantage of.

A little background about the insurance lead industry.

Many of the big lead companies started as small shops. Most of them were operated by 2-3 people at the beginning and some of them had a totally different business plan then they do now. For example, NetQuote started out as as an auto-dialer lead generation company and would send the leads to agents via fax. Later on, the co-founders had a falling out and one of them (I will leave out the name) was basically screwed out of his share of the company. The other two owners powered on, but were eventually bought out. It wasn't until the late 90's that NetQuote began their online presence.

All Web Leads was started by two college classmates from Austin, TX. Originally they took advantage of low cost keywords on Google Adwords which is why their lead quality was so good at first. These same keywords now cost 10 times as much as they did back then making it harder for them to compete with the likes of State Farm, AllState, and other huge insurance companies.

While there are other insurance lead companies with similar start-up stories, All Web Leads and NetQuote are the big ones. NetQuote was purchased by Bank Rate several years ago and All Web Leads bought out These mergers and acquisitions, in my opinion, is the main reason the online insurance lead industry took a strong downturn.

Many agents will blame the downturn in the lead market on low quality leads such as duplicate leads, survey leads, and incentivized leads. This is true. Some companies, including the the big ones are generating these low quality leads. However, is this the real reason for the downturn? I believe the answer lies deep within these companies.

The real reasons for the low quality leads

NetQuote is owned by Bank Rate who owns the website You might have even seen there ads on TV. It is my understanding that when Bank Rate bought NetQuote they aligned their lead generation strategy with that of Survey leads and incentivized leads work for because people looking to acquire credit cards are typically people who are in debt and need money. The prospects are filling out these surveys to get paid! This strategy does not produce quality insurance leads.

Another main reason for the poor quality leads in the last few years is due to the ever increasing size and financial goals of these companies. Since merging with, All Web Leads has continued to scale up. From what I hear, they are fixated on sales goals and they will do whatever it takes to hit those marks. Don't get me wrong, there is nothing wrong with setting goals and making a profit, but it should not come at the downfall of your main client. I should say that in recent months management seems like they are trying new strategies to increase profit without suffering lead quality.

NetQuote aka Bank Rate has a slightly different motivation for increasing profit and lowing costs. They are a publicly traded company (NYSE: RATE). They must report to shareholders and this can be difficult if the stock is tumbling. The shareholders of Bank Rate are most likely not insurance agents and do not care about lead quality. They are only looking at the stocks gains and losses. It goes without saying, this is the wrong motivation for an insurance lead company. It seems they have forgotten about the agents and only concern themselves with the bottom line.

I am staying positive when it comes to the insurance lead industry turning around. It gives me hope to see a few quality companies rising to the top. Even All Web Leads is starting to realize where they came from and that agents are what drives this business. If it was not for insurance agents this industry would not exist. Yes, leads are sold directly to carriers, but it is the agent that work these leads on a daily basis. Insurance agents should continue to push for better marketing techniques and technology. If they do this, lead companies will be forced to become more transparent and honest about their operations and everyone will benefit.

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