LeadsCouncil Live is a new series where we bring in experts to answer tough questions and share their thought leadership. Our first live interview attempted to answer the general question of what insurance buyers should be doing to prepare for a successful 2015. We invited Stuart Ganis of Velocify to share the expertise that he devoloped over his 25 year career as an insurance agent.
Michael Ferree: Welcome everyone to today's Leads Council call. Thank you all for joining us today. We've got a great call planned for you. Before we get started, I do want to run through a few different items with you. There will not be a presentation. This is going to be a live call with our guest. We're going to go through a number of different questions with him, and we'll have a real conversation about the topic.
We do want you to interact. There is a way for you to interact. If you have the Go To Webinar control panel up, all you need to do is type in questions in the questions section of the Go To Webinar panel. I'll see them come across, and I'll be able to insert them into the conversation. Feel free, please ask questions if you like. We certainly have a lot to talk about. It makes it all much more worthwhile when you guys interact.
Thank you again for joining us. Today's call is brought to you by the Leads Council, and Velocify. We've got Stuart Ganis from Velocify with us today. Stuart, welcome to the call.
Stuart Ganis: Thanks for having me.
Michael Ferree: Great. Before we get started, why don’t you spend a minute and tell us about you a little bit, and your history, and what you've got going on over at Velocify. Then we'll jump in and start having our conversation.
Stuart Ganis: Yes. I actually started in the business at 18 years old, right out of high school. I got a job as an insurance agent and stuck with it since then. It's kind of odd when people hear that you've been in the business for 25 years, and you just cracked 40.
I started as an agent in 1989, and then around 2000, I started an insurance agency with my wife, who is also a producer. We took the business from zero to a little more than 20 million in premium in a three and a half, four year period and then sold it in late 2005.
From 2006 until about a year ago, I was consulting agencies and actually have been in over 600 local agencies, consulting agency owners, CSR's, in areas sales, marketing, operations, best practices. I was introduced to Velocify for a consulting engagement and they ended up hiring me. I've been an employee for the first time in a long time.
It's been a fun ride, so here I am. I'm the director of Insurance. Everything that has to do with insurance, and BP, product. Anything that has to do with insurance at Velocify rolls up to me.
Michael Ferree: Twenty five years, you've seen a lot of change, or what? How has the insurance agent generate business change over the last 25 years?
Stuart Ganis: It's amazing. We started our agency in 2000, the question was, how many quotes am I going to get a day? Because the phones just constantly rang. You would walk into an insurance agency and the phone would ring, and ring, and ring, from whether it was TV, radio, yellow pages, billboards, Penny Saver, fliers on cars, traditional forms of advertising. It was a pretty easy business. Very low barrier of entry. You take a 52 hour class, back then I don’t even think you had to take the class. You just took a test when I received my license.
You get an insurance agents license, and you run a full page add in the yellow pages for a thousand bucks a month, and then you get 100-150 calls. You close half of them and you build a small book of business. You have a sign on your building. People walked in to buy, and you slowly but surely built a nice book of business, and started making 100, 200, 300 thousand dollars a year by doing that.
Then this thing called the internet became very popular. A lot of insurance agents, unfortunately didn’t embrace it. They thought it was going to go away, but it didn't. It got bigger, and bigger, and bigger. The directs and the captives were smart and they jumped in. Some of the smaller, local agents have really suffered from that.
It's evolved like mad. You walk into agencies now and you don’t see any file cabinets. You had six employees fifteen years ago. You needed 2,000 square feet because you had 20 file cabinets. It's definitely evolved. It's completely different.
Michael Ferree: You could probably argue that over the last 5 years that evolution has probably been accelerated.
Stuart Ganis: Yes, it's changed more in the 5 years, than it did in the prior, probably 10.
Michael Ferree: What does it look like? The topic of this call today is really how insurance agents need to prepare for 2015. How do they need to evolve?
I think the writing has been on the wall for a lot of people that attend the Leads Con events, or that are part of the Leads Council, and all of that sort of stuff. When we look at it generally, how do agents need to evolve to be prepared for 2015?
Stuart Ganis: That's a huge question.
Michael Ferree: I know!
Stuart Ganis: Here's what I learned. Prior to coming to Velocify, in my last probably 5, 7, 10 consulting engagements were people from outside of the industry that were coming into the industry to start an insurance agency. Never wrote an insurance policy, some of them were in their mid-20's. They may have never even bought an insurance policy, let alone sold one. They're coming in from different verticals. Whether it's technology, whether it's mortgage, just different business. They're coming into the insurance business, and they're running it like a business.
I would say to be prepared in 2015, you have to position yourself as, "I am a sales and marketing company, that happens to sell insurance." Insurance agents to often get hung up on the insurance side of things. So the conversation in the meeting, if they have them, the conversation on the sales floor, or between employees is always insurance, underwriting, product, claims. It's never, "Where am I going to get my next lead? What do I say to this person? What's my sales process? Why didn’t I close this particular prospect? What did I say? That's not the conversation. Those new people coming in the business, that's the conversation.
There's sales people and marketers that are running insurance agencies. They're not insurance people, and they're growing like mad.
I would say to prepare for 2015, you're mindset is, "I'm a sales and marketing company, that happens to sell insurance."
Michael Ferree: What about relationships? We all know that example, which is really my example of, I'm the consumer, "I've had the same insurance agent since I was just into college. He'd been part of the family, and helped my parents", and all that sort of stuff. Agents have always relied on those referrals and those relationships. Is that changing at all?
Stuart Ganis: It's still there, but it's changes in the way that the new … My daughter is 14, and she's never going to walk into an insurance agents office. She might have someone who they're insured with to get their insurance.
That relationship factor is definitely still there. When I was young, my parents had State Farm. In December, they received a, "Happy Holiday", with an annual calendar. That calendar was on our refrigerator all year. In the spring time you got, "Here are steps to take for you spring cleaning." In the summer, it was, "Here are some safety tips when you're playing at the pool.' That's how those agents stayed in front of us.
Now you need a marketing strategy. You have to invite your clients to you Facebook page. You need to be out there in the community from a digital perspective more so than mailing out traditional mailers. Because we get junk mail, and we don’t look at that stuff anymore, but we check out inbox's every 5 minutes. I think that's how it's changed. The relationship factor is still there.
That's for personal lines, for commercial lines, it is a little different. If I'm insuring a 5 million dollar building, sure, I probably have a different relationship with that Chief Operating Officer. I'm playing golf with them, I'm taking them to lunch a couple of times a year, it's different. If you’re talking basic property and casualty, you have to build a digital relationship with them now.
Michael Ferree: Yes. You touched on social media. Before we really dive into that, let's dig in to a little bit about this new consumer, the modern consumer. How do they really want to buy insurance these days? How are they evolving?
You touched on it a little bit with our example of your daughter. Let's dive into that a little bit more. What's the modern consumer look like for insurance?
Stuart Ganis: I think it's speed. Unfortunately the insurance industry kind of dug its own grave. Now it's perceived, auto insurance, and home insurance, it's perceived as a commodity. While we believe the consumer might be priced driven, and I'm not saying that a lot of them aren't, but there are great agents out there that know how to sell value, and overcome the price objection, so you don't need the lowest priced to sell something. If you need the lowest priced to sell something, then you are not a sales person.
The consumer wants speed. They want ease-of-use. They don't want to have 15 documents faxed to them to have to sign, and scan, and PDF, back to them. We we're doing that in 2000, and that was cutting-edge.
Now they want to click a link, they want to e-sign, and they want to submit, and they're done. It's really ease of use, and speed. That's what I believe the modern consumer wants. It's only going to become greater and greater as kids like my daughter become 18, 20, 25 years old. She's probably going to want to do it on her mobile phone, not even a computer.
Michael Ferree: How does the smaller agent utilize that mentality and find new customers?
Stuart Ganis: If you're an independent agent, you have to be selective with the carriers you sell. If the carrier isn't technology friendly, then you might have to take them off the menu, even if they are competitive from price point. Because you could outsell 5, 10, 15% for ease of use.
The other piece of that is added to your sales process. Whether it's contacting a leader, or when you get a lead on the phone, you can't tell somebody, "Let me take your information and I'll call you back in an hour." Because during that hour, they see 15 pop ups on CNN, and Google, and everywhere else, about how they can get a quote in 5 or 10 minutes, and they will do that. Then they won't even take your call. You have to add it to your sales process, and make it part of your culture that, "We are going to serve these people quicker, and better and more effectively than anybody else", and then execute.
Michael Ferree: I think at the core, I keep on hearing you say speed, and quicker, and what you just said. It leads me straight back to your earlier statement about becoming a sales and marketing organization that happens to do this, or happens to do insurance. That seems to be the basis of really getting an operation in shape and focused on converting those referrals, or sales leads, or wherever they're coming from as fast as possible.
Let's talk a little bit about, who knows who's figured social media out. That seems like a job in itself. Managing social media, figuring out how to optimize it, so that you're actually gaining business from it. What's your take on it?
Stuart Ganis: Again, it goes to your sales process. When I sell someone an insurance policy, chances are, they're from a local agent, from a call center, from a human being talking to somebody. I'm not talking about people that click to buy.
You could even do it from people that click to buy. It's a simple question on every single call is, "Are you on Facebook?" "Yes, I am." "Great, if I e-mail you a link, with your ID card, or if I e-mail you a link, will you click on it and like our page?" Something as simple as that. Then in your e-mail marketing, if your touching people 6 to 9 times a year, have a one e-mail blast dedicated to have a message for people to follow you on Facebook.
I had a client. He had about 25 employees. They used to play , "Hangman," on their Facebook page every Thursday. They would take a picture of a white board with the little lines, and the little things that hangs people whatever that's called. People would pick a letter, and when you pick a letter, if it was right, they would add the letter to the whiteboard, take another photo, add it to the comment. By the time the word was done, they would have 70 comments, from probably about 15 different Facebook users. If you think about that, how many people are seeing that hangman game on their wall? A lot.
That's for a new business perspective, and the retention perspective. I think agents often think, "I can't generate business from Facebook." Which by the way, you definitely can. It's also for a retention standpoint. Because if I get my renewal notice, if I search Google for my agent, and you’re not on the first page. If I specifically type in the mane of your insurance agency, "Stuart Ganis Insurance", if you’re not on that first page, or dominate that first page, you're probably off the menu for that renewal. Because the consumer wants to see you online.
We don’t buy things without going to Google and researching it first. Neither do your customers. Even if you buy a lead and you don’t get a hold of them the first time you send them an e-mail. They click on your page, or they start to stalk you online. They look for your Facebook page, or Linked In page, or web page. If it's not "Lived in", then you might be off the menu because that's how we're judged nowadays.
It's not only new business, it's a retention tool as well. I hope that answers the question.
Michael Ferree: Yes. It goes back to that fear of not having a relationship. I think a lot of agents that have been in the business for a long time always go, "No, I build my business off of referrals. I have this Rolodex", and all that sort of stuff. " I send the snail mail calendars", like you had said.
Social media makes all of that so much more easier if you use it, and actually talk with your followers, and do different things. What about Linked In profiles. You said, "Not Lived in". Does somebody actually have to hire a marketing person to manage this? Or is this something that you’re seeing independent agents do on their own?
Stuart Ganis: Yes. There's a lot of tools out there where you can automate posts. There's one that I use called, "Buffer App." Anyone who's ever seen me on Linked In, Twitter, or Facebook. Facebook, I really keep personal. Linked in and Twitter, there are apps out there that you can just load it up with posts, schedule them. Whether it's a motivational quote, whether it's a link to a webinar, whether it's a lead to your company’s website.
What you don't want to do is have every post say, "Want to save money on insurance? Call 800-555-1212." You need fun, engaging content. It's things that they're interested in. Maybe it's even a current event. You don’t want to get political. You don’t want to take one side or the other. You want stuff that people are not going to say, "Hide this from my wall. I'm sick and tired of seeing these advertisements."
If you're big enough, sure, hire somebody. Because you could definitely make it a full time job for somebody. Then they could become proactive and search social media for their friends, and employees friends, for the word insurance. If they see somebody shopping for insurance, they could conceivably message that person and say, Hey, I saw you had a problem with you insurance company. We'd love to give you a quote."
If I were to start an insurance agency today, that would be the first person I hire. The first person I would hire is a social media engineer, someone between the age of 18 and 22, that knows how to build pictures. Post those Instagram, Linked In, Facebook, and can work 4 to 6 hours a day and also do some administrative tasks in between. Maybe call leads, maybe scan service documents, maybe administrative stuff. For the most part, make us a social media champion online.
Yes, I think you should, if you have the resources for it. But it's not necessary, because you can automate a lot of the posts. Then you get to listen to someone comments or does something, and you could go on and have a conversation with them.
It's so important. That's how the kids communicate now. My daughter talks to her friends through Twitter and Instagram more than she does text or e-mail. These kids think e-mail is from 1950. My daughter, I look at our cell phone bill, she had 7 minutes on the phone, and it's all with me. You've got to be there. If you're not there, you’re off the menu.
Michael Ferree: Yes. Let's talk about hiring. You touched on this earlier as well. What hiring strategies should agents implement to adapt to this changing marketplace?
Stuart Ganis: Hiring is tough. I remember when I owned my agency, my wife and I would make this mistake often. We'd get a resume, this person knew our systems, and they had 10 years’ experience. We thought this person was going to be, "the one." Then you would hire them, and sure enough 3 weeks later, they're sitting in your office and your handing them their last paycheck. "Hey, sorry, this didn’t work out."
My recommendation is to hire people without any insurance experience. I would rather have a motivated sales person than somebody with a ton of insurance experience. I can teach the technical skill of insurance. I can hand them underwriting manual, I can send them to webinars that carriers hold. I can send them to face to face classes all over the country. Wherever you are, there is a class to teach you coverage and underwriting insurance.
I would hire people without insurance because the only way that they're going to know how to process insurance is the way you show them. There's no, "B" training and then re-training. The only thing they're going to know is, "Here's what I should say to someone when they want to buy insurance. Here's what I should say to someone when I need to service their account." That's all they're going to know. I love hiring people without insurance, maybe fresh out of college.
That would be the strategy that I would take. The downfall to that is, if you don’t have at least a little bit of training internally, then these people aren't going to be stimulated and they're going to end up quitting.
Michael Ferree: Let's also jump in and talk a little bit about the selling processes that agencies are implementing now. A lot of them are focused on a single product. Do you recommend that they focus on a single product? Should they be cross selling? What's the best way to optimize that sales cycle?
Stuart Ganis: From a marketing standpoint, you might want to focus on one product, so you’re really good. Maybe you have a place to market a single product, sure. You’re not going to survive if you only sell car insurance. It's just not going to happen. I don’t have the exact study in front of me. I've read auto insurance clients, stand alone, average about 18 months. Then when you add a home, it turns into 3 to 4 1/2 years. If you add an umbrella, it turns into 4 to 10 years. If you get a fourth line of business, they're a lifetime customer.
Think about it. If I am going to shop around, and I call a typical agent that's new, or that doesn't really understand all of those different products, and I say, "Yes, I have 3 cars. I have a house, a rental, an umbrella and my boat that I need to insure." Chances are that agent is going to say, Yeah, sure. It sounds great." And it's going to take him two days.
It's a great retention tool. You have to sell more than one product. T's a must. Even if it's renters insurance, and they don’t even know what renter's means, educate them. You can usually get a renters policy for about 100 to 150 bucks a month. It gives them a discount on their car insurance. Again, up goes that retention. At the same time, you’re helping the customer. If it's good for the customer, it's good for us. Right?
Michael Ferree: Yes.
Stuart Ganis: Yes, you have to have a round out strategy. Your CSR should be trained that whenever a customer calls it should be, "Oh, by the way, I notice you don’t have your home insurance with us." Or your sales people, after they close a car insurance quote, and they find out the person is a homeowner, they should quote them on the spot, it shouldn’t be, "Hey, are you interested in getting a quote on home insurance." Because the answer is no.
One thing I've always trained is when you get on the phone with somebody, a great way to start the conversation is, "If there is a way for me to save you money, and/or enhance the coverage on all of your insurance, is that's something that you're interested in, or should we rule that out?" Chances are they're going to day, "Yeah, that sounds great." Then you say, "Well what do you have?" " I have the car, I have the house, we have this, and that." "Okay, great, Let's start with the cars."
You start from the beginning instead of the end. Because what happens is lots of times we'll quote the car insurance and the person will say, "That's a little more than I'm paying now. You'll say. "If we quote your home, the auto will go down by this." The person says, "Nah, it's not really going to make a difference, thanks anyway."
By starting from the beginning of trying to get all that business, you could overcome that from happening. So yes, you have to round out. Otherwise, you’re just going to turn your book every 3 to 5 years, and you’re going to be chasing business all the time, and that's rough.
Michael Ferree: Yes. Out of curiosity, you mentioned the timeline to those different products. Is auto insurance a good entry point to that cycle? If I were out there initially selling auto insurance versus homeowner's insurance, which one is the best doorway into the life cycle? Is it auto? I think you said anywhere between 9 and 16 months, or something like that, turn around.
Stuart Ganis: Yes. That's a great question. That's how we're taught. Day 1 is sell the auto, get the home, get the umbrella, then toys. That's how we're taught. No, I think it's a great strategy to go after the home. Why not buy home needs, and then work your way back to the car insurance. I think that's a great way to go. I don’t think you have to lead with the auto.
The problem with home insurance leads is agents are impatient when they buy home insurance leads. It's a longer sales cycle. If I submit a lead for car insurance today, chances are I have to have in 10 to 15 days, or today. If II buy a home lead, I might not need home for 60 days, because that's when my escrow closes. Or 30 days, because that's when my current policy expires. Agents grow impatient from buying home leads. They're like, "No. I'm just going back to the auto leads." If you can do both, if you can have a bullet proof strategy where you’re buying auto and home, I think that's best.
That's a great question. I love buying home leads. Homeowner's clients, there's no service. Once a year they might need evidence of insurance if they refinance their house. They don’t call you 10 times a year to add a car, delete a car, add a driver, buy a new car, this and that. That doesn't happen. I love that idea. I'd buy home leads if I started an insurance agency today.
Michael Ferree: You know more than I do, and obviously people on the call probably do as well with this question. I'm curious, what's the difference in lead costs on average between auto and homeowner's leads? Is there volume? What do you see out there?
Stuart Ganis: I think it's all over the board.
Michael Ferree: Is it? Okay.
Stuart Ganis: I think a basic home lead costs as much as the premium auto lead. It is going to be more expensive than some of the auto leads that are purchased out there, no doubt about it. Again, it's worth it because if you look at the total cost servicing that client over a year, home is going to be, I don’t have the exact data, but I have to believe it's not even half as much as what it costs to service an auto insurance client.
Michael Ferree: Yes. Probably the big pitfall too, is what you noted. There's a longer sales cycle there. That becomes difficult to manage too, right? We can dig into this a little bit more with some lead management questions.
If you have a 60 day, or a 90 sales cycle, you're having to implement a lot of different nurturing e-mails and communications in the mix. Plus, you have a huge cost for the marketing up front that doesn't realize for another 60 days or so. That would seem to be a challenge, right?
Stuart Ganis: It is. When you talk about relationships and referrals in the insurance industry, that homeowner's insurance, yes, that's where I close in 60 days, great, "Who's your escrow company." If that agent is proactive, and not just sitting there waiting or the phone to ring, or for another lead to hit their inbox, and they’re really hungry ad they want to make a lot of money, they would call that escrow officer and say, Hey, I just spoke to the client. They're buying the house. I need the quote so that it's you’re file. Oh, by the way, do you have any other escrows on your desk that don’t have homeowner's insurance? Great. What's the realtor's name? Let me call them."
The same with auto insurance. Someone's financing a car. Why wouldn’t we call the dealership they're buying the car from? Get the finance manager on the phone. Talk to that finance manager. Let them know that you have a mutual client. Let them know that you could save future clients’ money on insurance. All of a sudden, you have these referral sources coming in from purchase leads. That's a sales person. That is someone who's going the extra mile.
Yes, it's a longer sales process. What can I do in between that time? I can build a relationship with an escrow officer. I can this, I can that. If you’re established, and you have a huge book of business, and you can invest a lot in marketing, like I said, have it a blend. Put 60% of your money in auto insurance, 40% in home. If the homeowner's leads start to sell, and close, start allocating more money toward it.
Michael Ferree: Yes. Stuart, one of the big questions, and one of the issues that I've seen in the insurance vertical, there's a huge line difference between the carriers who may be working call centers and really processing through leads. Then you have the independent agents who are struggling to do that. Do leads make sense for the independent agent?
Stuart Ganis: Absolutely. Nowadays, I don't know how else you’re going to do it unless you’re at every chamber meeting and walking into real estate agent's offices using cupcakes every day. I don’t know how you can do it. The problem I see, and I told you I consulted over 600 agents. When I would go into the businesses with 15 or 20 employees or less, I would always ask the owner, "I've been in here for an hour and a half, and I've heard the phone ring once. What's going on? What do you do for marketing? Have you purchased leads? "Yeah, we tried buying leads, but they stink." "Really? What happened? " Well, you know…" "What was you process?" They can't even explain what the process is.
Generally, it hits someone's Outlook. Whenever they get the chance they forward it to somebody else, who's sort of a hybrid service and sales person. They'll print the lead. Then it will go on the bottom. Two or three hours later they're calling this lead, and the customer is, "I already bought insurance." Or they can never get a hold of them. Then they go in the bosses office and they say, "These leads are no good. " Then the boss shakes their head, "Yeah, you’re right. Theses leads suck. I just dropped a thousand dollars. What a waste of my money."
That's their experience with leads. Until you really give it 3 to 6 months, have a bullet proof sales process, train on that process, turn into that sales organization that we talked about earlier. You can’t say internet leads don't work. There are people out there right now building empires on buying internet leads. You have to.
Michael Ferree: Yes. I want to touch on that. You've done a lot of consulting for a lot of different companies. Maybe you just answered the question here. What was the one or two main issues you'd go into. You’re pretty much, "They're dialed in. They're going to have this issue going on." What typically was it? Or was there always a common issue or were they all different?
Stuart Ganis: The common thing was generally culture. You have people that have been sitting there for 5, 10, 15 years, and the owner reads a book over the weekend about change and sales, and goes in Monday and is all psyched and pumped and has a meeting. Two weeks later, it's over. You have a cultural problem. It's the "That's the way we've always done it." Then you have an owner that's sort of out of sync.
This owner, great sales person, has decided to start an insurance agency. Went out and hunted. Built a big enough book of business to where he had to hire a service person to help him. Hired that service person. Wrote more business. Then after 2 or 3 service people, said, "I'm going to go play golf." Then goes back to the office on Wednesday, and looks at his service people and says, "Why haven't we sold anything?" They're looking at him like, "I wasn't hired to sell. I don’t know how to sell. I don’t even like to sell."
There's definitely a cultural problem. Eight out of ten times, it came back to the owner of the business, to the stakeholder. You would sit down with them and ask enough questions to where they would look at you and say, "It's me, isn’t it? You would say, "Yeah, it's you." You've just got to ask yourself sometimes, "Who's name is on the front door?" Are the inmates running the prison? Or am I running a business here? I can't fire Sally, because she's been here 15 years, and she's part of the family." "Yes, but Sally's staring at Facebook 7 hours a day, and take 5 phone calls. Then, when you hire someone, they sit with Sally for a week. Sally gets to kink them for a week before you give them their own desk, and so on. You wonder why you can't hire anybody good." It is culture …
Michael Ferree: What's the fix on that? You obviously can’t fire the boss. What's the fix on that?
Stuart Ganis: The boss has to change. Change, change, change. People have to embrace change. That's why a lot of people are struggling today. They still have their yellow page ad, or their sign on their building. They're just hoping. Hope is not a strategy.
A mentor of mine used to say that all the time, "Stuart, hope is not a strategy. Hope is not strategy." They have to realize hope is not a strategy. You have to buckle down and change. Whether it's education, whether it's starting to read sales books. You've got to change. Change the atmosphere. Change whatever it is. You've got to dig deep and figure it out. Because you can’t continue. If you keep doing the same thing over and over, you're going to drive yourself crazy.
Michael Ferree: Okay. I had a conversation with a guy a maybe 3 or 4 years back when I was on the sales side of the table. He was struggling with lead qualities. The guy's leads we not good. It was sort of a surprise to us, because we had other people doing very well with him with the leads. We got on the phone and said, "What exactly are you doing when you receive these leads?" He said, "Well, I get it. I get the lead, and I'll, if I'm not busy, or as soon as I'm not busy, I'll send out an e-mail to them." We said, "Okay great. What else do you do?" He said, "That's it. I just send out an e-mail, and sometimes they'll call me back. Sometimes they won’t."
We were surprised that he was able to get any business just by sending out an e-mail. In reality, what are the best practices around converting leads these days? Is it go beyond just sending out an e-mail?
Stuart Ganis: I don’t want to philosophize too much. I'm sure many people on this call have read our research. It's speed. If a customer is on a lead provider's site, or your own and they click submit, and 30, 10 seconds later, still staring at the landing page, or that CAD is still open, and their phone rings. That's impressive. Not only are you first in, and have a greater chance of closing that lead than anybody else. From a service perspective, as a consumer, I'm going to think to myself, "Wow, these people have killer service."
What I would do when we bought leads, because again, this was 2004-2005. When we would get a lead, first thing was dial that phone number. When people would say, "Wow, that was quick." I want people who are trained to say, "Imagine what will happen when you have a claim." We would always get a chuckle. Then they would do the quote, and close a ton of these people.
It's definitely speed. Then that initial objection of, " I don’t have time. I already bought insurance. Not right now." They have to overcome that. That's generally just confirming something on a quote. "Just real quick. You have this type of car. I want to make sure you’re this age." Once they answer 2 or 3 questions, you've got them. They’re going to stay on the phone with you for 5 or 10 minutes, until I finish the quote.
It's speed, it's sales, and it's belief. Sometimes we don’t really pay as much attention to belief as we need to. If I get a lead and I believe I'm not going to get a hold of that person, I'm probably right. If I get a lead and I believe I have a great chance of getting a hold of that person and quoting them, I'm probably right. There's a belief system in these agencies that purchased internet leads, they stink. That's the belief system. Well, guess what? You don’t have a frickin' prayer.
Changing the belief system. Changing the culture. Getting an owner to really embrace change, and get his or her people to embrace change. Sometimes you've got to make that tough decision. What I always tell owners is. "Look at your sales team, or our entire agency. Ask yourself this one question. "Knowing what you know about this person today, would you hire them?" If the answer is no. You need to let them go. Or you need to put them on a 30, 60 day written warning. That, Hey listen, if X, Y, Z, doesn’t change in the next 30, 60 days, we're going to have to part ways."
That's a great question. Knowing what you know about your people today, would you hire them? If the answer is no, then there's you’re problem. That's the problem. [Crosstalk 00:36:50].
Michael Ferree: Yes. I love it. That's a great question. Great perspective. I want to dive into this lead quality issue. I'm curious to know, you’re not working leads these days, and certainly may not have firsthand experience. What are you hearing out in the space generally when you have conversations with regards to lead quality over the last 12 months.
The reason why I'm curious is, I know that I've seen a number of different verticals. I've been involved in a lot of different verticals. There seems to always be cycles. Whether it's a year, or 2 year cycle where there's either a lot of lead volume. Or it goes down, and there's either a lot of fraudulent activity, and then they leave. Either they leap to another vertical and it sort of thins out.
If you don’t mind giving me your perspective, your take on the state of lead quality in the insurance space. Let me say one other thing too, before I let you answer that. I'm curious to know if it's still going on where leads are being sold 8+ times? Or have they shrunk that down? Give me what your take is on the lead quality in the industry today.
Stuart Ganis: I'm defiantly never going to mention the name if anybody asks the question. I'm not mentioning any provider name. Forget that question. What I've heard is they've gotten better. I think there was a period of time between maybe, 2009, 2010, 2011 where there was a lot of that going on. Where lead providers were selling leads to each other, then selling them to 6 people. Lead quality was really poor. What I'm hearing is it's improving, it's getting better.
I can also tell you that I see the same leads at Velocify for certain agents at the same second. There's still some of that going on. I think it's a function of trial and error. Figure out what works for you and what doesn't. You probably have to cycle around several. You have to buy from several. Some are not going to be very high quality. Some are going to be great. That's the nature of the beast.
Overall, I've heard that they have improved dramatically from several years ago before I was in the space. Remember, this space, being specifically in the lead buying world and lead management, this is still fairly new to me. I've bought leads from 2005. Lead providers are calling us, begging us to take an entire state. They would give them to us for $54 bucks apiece. It was like fish in a barrel. I've heard it's improved a lot.
Michael Ferree: Okay. I know that you just threw out the caveat that you're new to this, with regards to Velocify. Even back when you were buying leads, maybe you can relate to this. You do get calls. They all say the same thing. "We generate leads via organic surge, display media, paid surge. It's all verified. Sometimes we even call verify it. You’re going to get the best leads. Why? Because they’re generated on our pages, and you can go to our website here. It says, this, this, this, and this, yada, yada, yada." They all say the same thing.
You put the down payment down. You give them the credit card number. You start getting leads, and you find out sometime quickly, unfortunately, sometimes it takes 30 to sixty days to find out that what they were saying wasn't 100% accurate.
So you have any tips on being able to vette out a potential lead source? Or is it just trial and error?
Stuart Ganis: It's trial and error, and it's also data, right?
Michael Ferree: Yes.
Stuart Ganis: Data is the big deal nowadays. If you’re not measuring and tracking what you're specifically buying, getting turned down from, bad phone numbers, bounced e-mail addresses. If you’re not really tracking that stuff and getting super granular by lead provider, by territory, by sales person.
I was in an agency, I'm not kidding, a year and a half ago that was buying a lot of leads. A couple of sales people weren't closing at all. I coached them and spent time with them. I went, "Something's wrong here." We pulled the call accounting software from the agency, and compared to leads they called. They were calling 1 phone number out of 3. They would call the home number at 2:00 in the afternoon, when there was a home and cell number.
You really have to set the expectation with your team. Then you also have to inspect that. Make sure that they’re actually making the calls, calling every number. A lot of it has to do with tracking and measuring, and holding people accountable to do that. Because too often times, owners or stakeholders will take someone's word for it. "Hey these leads stink. I haven't closed any of them. I've called 100 of them. I didn’t quote a single deal." "Oh, okay, we'll stop buying those."
How do you know that? Do you have some data to back that up? It's out there now. It's available to us now. There's tools out there that you can actual measure and track this stuff to the penny. That's how I would make that decision. I would make that a data driven decision, not a [crosstalk 00:42:11]. I think too many people do that.
Michael Ferree: That's a great point. I currently have a partnership with a company where we share our information. We share the data and the results that are taking place, good or bad. There's scenarios where it's not good. The leads are bad, and we're able to track down and figure out what those issues are within a week or so and get it resolved.
I think we've been talking about this for I don’t know how many years, sharing data. A lot of insurance agents and companies still aren't doing it. For whatever reason, aren't sharing their results and their conversion data with the lead sellers. I know you guys at Velocify make it pretty easy for them to do that. What’s your take on that? Are companies doing it? Is it beneficial? What’s the story?
Stuart Ganis: It's pretty funny. There's an agent that started a couple of years ago that writing five hundred some odd applications a month right now. He's become a very good friend of mine. One thing we always talk about is, this industry keeps everything too close to the vest. It's like, "It's my secret." What people don’t realize is that us, as insurance agents just went out there and sat in a room and shared best practices with one another and talked about what we did, and how we did it, and who we did it with, it's extremely beneficial to everybody.
I'm a firm believer of that. I've always been that way. It's amazing what kind of opportunities pop up when you're willing to share that information. Maybe there's focus groups in the industry where people could meet once a month and share best practices. Not only for leads, but even their P&L.
I went to a group with an owner where 10 owners brought their P&L, and put it up on a projector and people would hammer them. "Why did you spend this percentage of money on marketing. Why is your payroll so high?" They shared everything with each other. This industry just doesn’t do it. Everything's a secret. That's just not healthy. It's not healthy
Michael Ferree: That's a pretty awesome segue way too. Because coming up at this next Leads Con we're going to be doing something a little bit different. Those that are on the call who are buyers, hopefully you'll be able to attend and R.S.V.P for the Buyer's Summit. Because this year we're going to set aside about an hour and a half to two hours for an open forum discussion which for the insurance vertical, you're going to be leading. It's not going to be a panel. It's not going to be a presentation. It's going to be an open discussion about what's going on in the industry.
Do you have any thoughts about what type of topics you'll be talking about? I know I'm totally hitting you out from left field on that question. So far out you may have even put any though into it. Obviously no one's sharing P&L's, nut what type of things are you going to be addressing at that forum?
Stuart Ganis: I think it's everything A to Z. I think really what we need to talk about is from the time a lead hits out inbox, or our software. Or the phone rings and we pick it up. To the way we process that new client. The way we serve them. The way we reach out to them. The way we nurture them once they become a client. The way we service them. The way our customer service reps process.
I think it's anything that happens in the roof of an agency or brokerage, I think we should talk about. I think it should be a business best practices, not only folks on lead buying. Of course lead buying happens in an insurance agency so that will obviously be a part of the conversation.
Michael Ferree: Yes. That's awesome. I'm looking forward to hearing how that goes. I'll probably be in another room at that time in a similar forum. I can't wait to hear how it goes.
We're going to end it off here, Stuart. I really appreciate you taking the time to talk with me today, and taking the time to talk about everything that's going on in the insurance space and how it's evolving, and what agency to do be prepared for 2015.
You've got a tremendous amount of wealth of knowledge. We probably could have talked for another hour. If you wouldn't mind sharing your contact information with the group. If anybody wants to reach out to you directly, get some questions answered from you personally. How would they get a hold of you?
Stuart Ganis: E-mail is great. My e-mail is firstname.lastname@example.org. I'm just about the only Stuart Ganis on every single lead platform on the planet. I'm sure you've never met another Stuart Ganis. On Linked In, I'm S, T, U, A, R, T. If you want to connect with me on Linked In, I write articles, posts. I'm pretty active on there. Follow me on Twitter. There's tons of ways you can connect with me. Feel free to e-mail any questions you have at any time. I'll give any insurance agent on the planet 20-30 minutes of my time if you need any help with growing your business.
Michael Ferree: Very cool. I really appreciate it. I want to thank everybody that's been on the call listening in. Thanks for joining us today. If you have any questions, reach out to Stuart directly. It was a pleasure speaking with you. I look forward to doing it again soon. Also seeing you at Leads Con, and seeing how the forum goes and all that sort of stuff.
Thanks again everyone for joining us. We'll see you on the next call hopefully. We'll tackle another topic together. Thanks a lot Stuart.
Stuart Ganis: I appreciate it. My pleasure. Take care.