How Many Prospects Do You Need to Hit Your Insurance Sales Goals?
Here is a little-known insurance industry insider nugget: P &C Insurance carriers only want 15 – 20% market share in any one geographic area.
That means that the carrier’s business model is built around letting 80% of all prospects walk out the door without buying their product.
For independent agents, the blow is softened because they have multiple carriers to shop a prospect, but if they track their quote-to-close ratio by the carrier, they will see the same close rates.
For a captive agent, this is a brutal realization when they look at their quote-to-close ratios.
I understand and agree with the logic behind the carrier’s self-imposed market share numbers.
All we have to do is look at the floods in Houston and the wildfires in California to understand their actions.
What does that mean for insurance agencies in 2018?
They need to track their marketing and prospecting quote-to-close results, increase their referral partnerships, and solidify their retention processes.
Let me explain.
Tracking your quote to close ratio by marketing campaign will tell you how many prospects you must have to reach your goals.
There is a very simple formula that you can use with any marketing campaign to correctly determine the number of prospects you need to reach your sales goals for a campaign.
You will need three pieces of information from any prospecting campaign:
- The total number of prospects you started with,
- Your sales goals, and,
- The total number of sales from a currently operating campaign or a completed campaign.
Of course, you could also use the historical information from all of your completed campaigns to help you determine the most effective lead sources and prospecting list to use in a future prospecting campaign. If you have agency-wide quote-to-close numbers, use that data in the formula below.
The simple formula is: Prospects X (Sales Goals/Actual Sales)
This formula applies regardless of the type of prospecting campaign you are currently using since it is based on the results of a currently operating prospecting campaign or a completed campaign.
You must always consider that several variables will impact your prospecting results, these include:
- Lead sources,
- Technology you use to prospect,
- The time of day you prospect,
- The method of prospecting – phone, email, mailing, conference calls, etc.
- The sales ability of the person or team that is prospecting.
Don’t over think the formula. Let the numbers tell you the real story, don’t try to skew the numbers to match what you want to happen, let them honestly show you what is happening.
Let’s apply the formula to 4 different prospecting scenarios:
- You purchased a telemarketing list of 1000 names
- You bought 100 real-time internet leads for one of your producers
- You mailed out 500 postcards (The postcards all had the Inspire a Nation recommended wording and the five key items that dramatically increases response rates)
- You bought 1000 aged internet leads
Scenario 1 – You provided your telemarketer with 1000 names from a purchased list: Your telemarketer called between 10 AM – 3 PM (The absolute worst times for telemarketing!), the campaign produced five new sales; you wanted the telemarketing campaign to produce 20 sales. Based on the formula you will need to provide your telemarketer with 4000 names to reach your sales goals. 1000 X (20/5)
Mentoring suggestion: Change your prospecting times, and you will get better results
Scenario 2 – You bought 100 real-time internet leads for a sales rep: You used a lead management tool to reply immediately to the internet leads, and you followed the Inspire a Nation recommended internet lead follow-up schedule. You closed ten new sales; you wanted twenty new sales. Based on the formula you will need to provide the sales rep with 200 leads to reach your sales goals. 100 X (20/10)
Mentoring suggestion: Though this percentage is pretty good, make sure you are purchasing the highest quality (Prospects provided real information and wanted a quote) real-time leads available.
Scenario 3 – You mailed out 500 postcards: You received 100 call-ins, had 20 people download information from your website, and had 12 people show up for a conference call; all this activity produced seven sales. You wanted ten new sales. Based on the formula you will need to mail 714 postcards on your next mailing campaign. 500 X (10/7)
Mentoring suggestion: Make sure you are mailing to areas that match the demographics of your target prospects.
Scenario 4 – You bought 1000 aged internet leads: Your team emailed, called, and mailed postcards to the aged internet leads over a 60 day period and you followed the Inspire a Nation recommended follow-up schedule for aged leads. All the activity associated with the prospecting produced 14 sales. You wanted 25 sales. Based on the formula you will need to purchase 1785 leads to meet your sales goals. 1000 X (25/14)
Mentoring suggestion: Make sure your x-date follow-up and re-quote process are just as thorough, so you get the maximum return on investment.
Of course, if you are using Inspire a Nation recommended prospecting templates, following the recommended follow-up schedules, utilizing the recommended technology and all of the prospecting options we teach you to offer a prospect, your results will be far superior to the average agent.
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