Annuity Leads

If you’re in annuity sales, you already know that you need to have annuity leads that will generate sales to stay in business.  Some of these leads will come from traditional advertising, but if you rely on advertising alone to generate annuity leads for your business, you’ll miss some opportunities as different people pay attention to different sources of information.  You want a multi-pronged approach to generate annuity leads.

The good news is that advertising isn’t the only way to generate leads – you just have to be willing to think outside the box to generate a full compliment of annuity leads.  The following are just a few innovative ways to generate annuity leads to get you started:

• Networking

Networking is the new buzz-word in marketing, but many people don’t understand how easy it is. Networking is more than just joining the local chamber of commerce and attending their after-hours business events.  Every organization, club and group you are a member of gives you an opportunity to meet new people and share what you do for a living.  You never know who is in the market for an annuity – some of your best clients could come from people you meet in your weekly pick-up basket ball game!  Joining civic groups, sitting on the boards of nonprofits or even just talking to people while you workout at your gym or shop for your groceries are great ways to network.  When asked what you do, don;t say “I sell annuities.”  State it in terms of their benefit, “I help people generate a retirement income they cannot outlive.”

• Offer to speak at networking events

Don’t just join your local chamber of commerce or civic group – offer to speak at their networking events.  The organizers of these events are always looking for people who are willing to get up and talk, and they can be a great way to get your name out to a targeted group of people.  Try to tailor your presentation to the group you’re speaking to.  If you’re speaking to a group of business people, talk about how guaranteed payments from an annuity can help protect them if they experience a slow down or go out of business.  Just be sure your content is informative, and not sales-oriented in nature – nothing will get you kicked out of these groups faster than if you get up and try to sell them something!

• Trade shows

You don’t have to buy an expensive booth to make trade shows work for you, although having a booth is well worth it (e.g. at an RV show or other event that attracts older investors).  Go to a trade show and walk around.  Present your information to those who have booths and to those who are just walking around the facility.  Even small cities have a few trade shows each year, filled with hundreds of prospects you can target.  If you do get a booth, make sure you use it properly.  Have a neat, well-designed display and don’t ever leave your booth unattended – you may miss a hot prospect!

• Ask your satisfied clients for referrals

Word of mouth is a great way to generate annuity leads.  After all, who better to advertise your business than a satisfied customer?  Consider offering incentives like a $50 gift certificate for each referral that buys an annuity or donation to their favorite charity.

When looking for annuity leads, don’t be afraid to try new things.  If you’re in sales or marketing, you always have to be on the outlook for new prospects to keep growing your business.  Think outside of the box and keep your business cards on hand at all times – you never know when you’ll come across someone who’s the right prospect.

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No matter how the annuity lead was generated, the prospect is not dying to buy an annuity.  That’s what selling is all about.  Uncovering the prospect’s desires and matching those desires with your product or service.  You do that by asking questions, not by talking about the features and benefits of annuities.

Most agents can’t sell. They think they can.  We highly recommend you study these two books:

SPIN Selling by Neal Rackham
Question Based Selling by Tom Freese

Anytime you end a sentence without a question mark, you’re doing a poor job of selling.  The main rule of a sales conversation: the one asking the questions controls the sale.  If your presentation is to tell the prospect about your product and then wait to address their questions or concerns, you’re losing 2/3 of you sales.

Another rules of selling is that you don’t explain your product and then look for a “yes.”  Products today are too complex.  Explaining your product simply confuses your prospect in most cases. In fact, you should have the prospect agree to do business with you BEFORE you even talk about your product.  Let’s consider this hypothetical sales conversion.  Note how the agent asks questions.

You: Thank you for meeting.  May I ask what motivated you to send back the card?

Prospect:  Yes.  I have an interest in what I can do to reduce my taxes in retirement and your postcard caught my eye.

You: How much tax do you pay now?

Prospect: about $20,000 every 3 months.

You:  I can see why you want to make a change.  What has your CPA advised?

Prospect:  No much—it’s kind of frustrating.

You: what options have you heard of?

Prospect: tax free bonds, annuities and E bonds

You:  Is there a reason you have not used these options?

Prospect; I don’t know enough about them.

You: rather than get into a detailed explanation of the options, it will save you time if I can just ask you some questions about what’s important to you.  Would that be okay?

Prospect: Sure

You: of the following three items, which is most important: return of principal, tax savings and how large a return you can get

Prospect: Return of principal is of course the most important.  next would be tax savings since the taxes, I feel, are eroding my principal.  Last would be the size of the return because I don’t want to sacrifice safety.

You: If I understand you correctly, If I could show you a way to put your money to work, with a guaranteed return of principal, and a way to slash your tax bill, we would have a basis for doing business together?

Prospect: Yes we would.

In the above dialog, you have focused on THEM and THEIR desires and THEY have agreed to work with you and you haven’t even said a word about your product.  Now that’s turning annuity leads into a annuity sales.

For financial advisors seeking exclusive annuity leads

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People who have requested non-specific information

These are people who have completed a survey at the county fair, a mall, on line, etc in which they expressed information in “investments” or “tax savings.”  As you might guess, these people are no likely to be an annuity lead any better than your deaf grandmom, Bessy.

Yet, some companies will sell you such a list with the title “annuity buyers.”

People who have requested specific annuity information

Now, this is starting to get warm.  If the prospect has requested information about annuities, then we have someone we can classify as an interested annuity lead.  Of course, that does not mean they will buy.  It does not mean they will have more then $5,000, but at least they have indicated specific interest in knowing more about annuities.

But you would like to know a little more from the annuity lead vendor how these people came to express interest.  For example, did they see an offer in a newspaper and they called up or sent in a coupon?  This would be a good quality annuity lead as they received a passive offer and they had to take action.  The fact that they had to take action indicates a level of motivation.   

On the other hand, did the annuity prospect get telemarketed and get talked into getting some information on annuities?  Or did they get an email that said “win a Ferrari, click here” and the solicitation turned out to be a solicitation for annuities and the prospect thought by expressing interest they would also get a Ferrari? If the annuity lead is an “incentivized lead,” it is less worthwhile. 
People who have requested an appointment with an annuity agent

There’a an old saying, “investments are sold and not bought.”  The same is true about annuities. People do not ask to buy an annuity.  They end up buying an annuity after a fact finding sessions with a competent professional and the conversation leads to the purchase of an annuity. The prospect did not enter the meeting or the conversation thinking, “I hope I get an opportunity to buy an annuity today.” 

So if any service or list brokers wants to sell you annuity leads that supposed requested an appointment with an agent, don’t be stupid!  While the prospect may have been talked into an appointment and may have said they were “willing” to listen to what a professional had to say, there are no prospect that “have requested” an appointment with an insurance licensee. That would be like requesting an appointment for a colonoscopy (okay, I’m overstating here). 
People who have agreed to an appointment with an annuity agent

Typically, these people have been telemarketed.  They have been talked into an appointment and have expressed a willingness for a meeting.  We know once company that sells these leads for over $100 each and their big guarantee is that they have called the prospect, secured the appointment and that the prospect has at least $5,000 of investment capital.  Woohoo!  You’ve got an elephant there.

Seriously, in such a circumstance, if the prospect is even home when you show up for this appointment, it will be an uphill battle because:

They really don’t know

• what the meeting is about
• Why you are there
• What you do
• What your agenda is and
• They have no agenda

Annuity Leads that made the first move or leads that were called

As mentioned above, ask the annuity lead source for as much detail as possible on how the lead was generated.  If you find they are vague, then pass.  If they explain it in detail, show you the ad or the coupon, and explain the process, then you have a seller who is far more revealing then most.  Our experience is that they rarely clearly tell you how the lead was generated.

Additionally, get very clear if the annuity lead was generated by the prospect in reaction to a passive offer(e.g. an ad in the paper, a post card, an Internet ad) where the annuity prospect had to take initiative and action OR was the prospect telemarketed and talked into the offer or somehow incentivized to say “yes, I am interested in annuities.”

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Annuity Direct mail

Direct mail works no matter what someone else told you or your own experience.  Just because it did not work for you, does not mean it does not work.  If you read 25 books on the science of direct mail like we have, you can make it work also.  It’s a science and if you don’t know the science, you are wasting your money.  Most direct mail pieces are lousy and fail.

We used direct mail and consistently got responses between 1% And 2% (sometimes higher).   The economics of using direct mail to generate annuity leads are as follows:

Send 1000 postcards x 50 cents (printing and postage)  =$500
Get 1% response = 10 responses
Of the 10, get 2 immediate appointments
Make 1 sale for $100,000 x 6% = $6,000
Return on investment 12 times (1200%)

We never made a sale less than $100,000 but your area may have less affluent people.  You may also earn a higher commission than 6%.

Your clients would be very lucky to earn 1200% on the investments you recommend to them.

Internet Annuity Leads from Ads

Instead of mailing a postcard, you can place ads on the Internet.  The ads can range from very inexpensive to very expensive.  For example, you can place ads on many local senior web sites for less than $50 per month.  Try finding some local senior web sites in your area.  In Google, type in the name of your town (let’s use Columbus Ohio for this example) and a group of people that tend to buy annuities:

Columbus Ohio retirees
Columbus Ohio seniors
Columbus Ohio retired
Columbus Ohio grandmothers
Columbus Ohio grandparents

You get the idea.

While Internet ads to generate annuity leads on these sites tend to be inexpensive, these web sites don’t get a lot of traffic. If you want traffic, you need to advertise where a LOT of people see your ads.  For example, you could advertise on Investopedia.  However, it will likely cost you $7 or more per CLICK.  If only 10% of the people click on your ad complete your form, that’s $70 per annuity lead. So the problem with sites that get a lot of traffic is that the cost per annuity lead is very high.  The other problem is that many sites may not be able to cater to a small geographic area.  You may want annuity leads only within 25 miles of zip code 44046 but some of these web sites may only sell you leads by the state.

Internet ads do work but you will need to test many different sites to find those that work for you at a realistic cost per annuity lead.

Print ads

We used print ads for several years with good results.  The daily newspaper is too expensive but many neighborhood newspapers and senior papers have costs that will produce annuity leads for  reasonable price. Here’s an example

Cost of ad = $250
Responses = 10
Yo get 2 immediate appointments and make 1 sale for $6,000

Not bad .  That’s a 23 times return on your investment (2300%).

Note that not every publication will work.  We have tested some publications where the ad cost $400 and we did not get one call.  Another publication costs only $200 and we got 20 calls.  So you need to test many publications to find those that will work.  Of course, you better have a killer ad which means you either get a successful and talented copywriter to compose your ad OR you read 20 books on copy writing and compose your own ads.

Annuity Seminars

Seminars work and it does not matter what others have told you or your own experience.  Like direct mail or advertisements, there is a science for success.  If you have not uncovered that science, then its likely you wont have success with seminars.

We have had over 200 seminars and typical results were as follows:

3000 invitations mailed = $2200
room rental and refreshments  $450
Buying units attending 20
Appointments secured 10
New clients
Total revenue 5 x $100,000 x 6% = $30,000

Note—we never sold JUST annuities and if you do, cut the above results in half.  We offered everything so no matter the propect’s interest, we could supply it.  But even if you sold JUST annuities and generated $15,000 in commission for a $2700 investment, that’s a 500%+ return on your investment.  Not too shabby.

Referrals

You likely wont generate too many annuity leads from professional referrals. I don’t know many attorneys or CPAs who will refer clients to you so that you can sell them a product.  If you are an advisor and annuities or just one of your tools, then yes, professional referrals can fill your appointment calendar.

We will address email leads in a future post.

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If you have read the previous posts on generating annuity leads and buying annuity lead lists, you now know what to ask before buying someone’s annuity lead system:

1. how are the leads generated
2. did the prospects get talked into it or did they respond of their own initiative
3. what offer did they respond to—was it specific about annuities or general
4. what will be the cost per lead

If the answers above sound okay, then do the math.  Assume you will need to generate 10 leads to have one new client.  What will your return on investment be?  Now cut it in half.  Are the numbers still compelling?  If so, this is an annuity lead system worth trying.

Word or caution—don’t try it for 3 days.  Very few things work in 3 days.  We have found one big difference between annuity agents selling annuities that never make it and those that make millions.  Those that don’t make it try something and if they don’t get a payoff fast, they toss it and move on.  They leave behind them a strong of systems and tactics and trials that did not work (because they were not given enough time).

The big producer will NOT give up on a system or a method until they have tried 190 ways to make it work.  Only when they have exhausted all of the alternatives, will they try something else.  In other words, if you give up fast, you’ll be out of the business fast.

ProspectMatch is a source of annuity leads

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Find out which gender, which age, which income segment of people are your best annuity buyers at Javelin Marketing Downloads.  Get your copy of the data.

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Sounds good.  But have you ever heard the saying “there’s no such thing as a free lunch?”  If the saying holds true, then either the free annuity leads aren’t worth much or there is a cost you don’t know about.  Let’s look at both possibilities.

If someone is willing to give you free leads, ask about the nature of the leads.  If the leads are free, does it make sense that the provider probably did not pay much for them?  For 5 cents per name, you can get from many mailing list companies lists of people that are age 55 or over.  Do the names on this list qualify as an “annuity lead?”  If you ask me, it’s just a name on a list and 1000 of those names cost $50.  They don’t have much value and in fact, they have “negative value” because you will waste 98% of your time calling this list to find a few people who might be interested.

Now, if you take the list and then send a mailer to these people offering a free safety analysis of their annuity or a copy of a booklet, “The Truth About Annuities,” you will have some people respond.  The people that respond are valid annuity leads because they have expressed interest.  Among the 1000 names on the list, the 20 or so people that respond have value. It costs money to get a decent annuity lead.  In this case, you have the $50 for the list, and the cost of 1000 mailers (about $700 including postage, printing and mailing service).  Then you have maybe $60 for the booklets you send out including postage, for a total investment of $810.  Divide by the 20 leads you got and your cost per lead is $40.50 ($810/20).  As you see, there is no way to generate a real annuity lead for free.

Perhaps the leads you are being offered are more than just a list.  Perhaps your investigation uncovers that these leads are people who responded to a mailer as the scenario above and you are being offered $40 leads for free.  The party offering you the leads has something to gain.  Either an insurance company will earn profit from the products you sell for them (and also pay you a commission) or an intermediary (e.g. field marketing organization) will earn a commission override.  There’s certainly nothing wrong with that as these organizations are willing to front your marketing costs in return for some business form you (or else the leads will stop coming your way).  Again, these annuity leads are not free.

So think for yourself and do some investigating about the nature of “free annuity leads” and understand the true cost.

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There is no trick to making a lot of money in annuity sales.  Like all sales, it boils down to quality and quantity of annuity leads.  Quantity means that the more people you talk to, the more sales you make. Quality means that the better the quality of prospect and the better the quality of your sales presentation, the higher your closing ratio.
 
In order to have a lot of annuity prospects, you have two choices.  You can work hard to get them with inefficient tactics like cold calling, networking, relying on referrals, etc. or you can motivate annuity prospects to contact you.
What is Annuity Lead Generation?

Any way you get annuity prospects to contact you is viable: direct mail, flyers in their mail box or on their car windshield, flyers left at senior centers, etc.  There are dozens of viable ways to put a message in front of an annuity prospect and have the prospect respond and as a result, have a constant large flow of annuity leads.  Imagine coming to your office each morning to find ten hot annuity leads in your email–annuity prospects that have contacted you and wait for your reply.
 
While annuity lead generation is nothing new, it is usually conducted poorly. Fortunately, in 2008, it is now easier and less expensive as you can have annuity leads generated by using the Internet.
How Does Lead Generation Work?

There are agencies that specialize in providing qualified annuity leads to annuity agents. An agency develops a website or affiliates with several websites on which they promote and advertise the benefits or dangers of annuities (it will make sense in a minute why advertising “dangers” works).  A consumer finds these informational web sites and the annuity prospect completes an online request form. This form is submitted to the agency. These annuity leads are then sent via email to you, the annuity professional, with full contact information.

Let’s address two issues: the quantity and quality of annuity leads generated.
 

The most powerful message for an Internet ad is not to offer an annuity quote.  Consumers know that this is just an invitation to be sold and they are averse to filling out quote forms.  You get a far higher response if you offer educational information.  Now let’s take this one step further.  Offer educational information, information that if the annuity prospect does not have, it will cost them a lot!  You get more more annuity leads when you offer to alleviate pain or solve a problem than if you offer an opportunity.

For example, Wwhich headline do you think generates more annuity leads:

1. “Cut Your Taxes with a Tax Deferred Annuity”  OR
2. “Avoid the Two Assets that get Double Taxed–and Most Investors Don’t Even Know It.”
(Headline number 2 refers to annuities and IRAs that are potentially subject to income AND estate tax at death).

The second ad which presents a problem and offers to educate the consumer how to solve it will get 300% as many annuity leads as the first headline.

Now that we have insight into high volume of annuity leads, what about the quality of annuity leads?

Using the Internet solves this problem.  Annuity buyers are mature investors, not youngsters.  Look at the statistics of mature investors on the Internet:

Mature Internet users are the perfect affluent and educated group of annuity prospects.

By having the right ad which appeals to solving a problem and using the right medium, the Internet, you can have a fantastic annuity lead generation system that produces high quantity and high quality of annuity leads.

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Let’s do some math on annuity sales.  As far as I can tell, most equity indexed annuities pay the agent 8% commission.  So to earn $100,000 in a year, you need to sell $1.25 million of annuities.  Since I know agents that have sold that in ONE CONTRACT, it’s unacceptable that over an entire year, you don’t sell several millions of annuities. Simply unacceptable. 

$1.25 million is $100,000 per month.  There are 20 workdays in a month.  You can easily sell one contract for $100,000.  It might even take you a whole day if you need to drive to meet your prospect, make a presentation, take them to lunch and socialize. So what the heck are you doing the other 19 days of the month?

I’ll tell you what’s crazy.  I see annuity agents write a $100,000 policy and then they take the next day off as a reward.  NO!!!  Keep up the momentum and kick into high gear.  It’s by chaining winning days together—several days of $100,000 sales that you have a $500,000 month. If you want to take a day off, take it AFTER you hit $500,000 for the month. 

Here are the reasons that annuity agents fail to earn at least $100,000 a year and how to correct these errors:

1. You’re lazy and you don’t prospect.  Do you expect the phone to ring because you are a nice person? If you don’t have at least 3 prospecting campaigns going, get out of the business and get a government job.  Just quit now.  Or, select any three of these prospecting methods and get going:
Mailers
Seminars
ACTIVE referral system (don’t wait for referrals)
Subscribe to an annuity lead program
Cross referrals with a long term care agent or P&C agent
Email program

If you are depressed then do to the shrink and get some anti-depressants.  There are NO excuses except the ones that come out of your mouth.

2.  You don’t know how to sell.  Overconfident agents tell me all the time, “I’ve been selling insurance for 30 years, I can sell.”  It doesn’t matter how long you’ve been doing something, most people cannot sell. They’ve never had a minute of training and they don’t even know what they don’t know.  Immediately get trained.  Enroll yourself in one of these classes:  Dale Carnegie, Sandler Institute, SPIN Selling.

3. You ignore a basic rule of the universe—ACTIVITY GENERATES RESULTS. Stop sitting on our butt.  Do something, anything!  The more active you are working in and on your business, the more results you get. 

4. Hang out with successful annuity agents and copy what they do.  Why try and figure out how to be successful when you can just copy what successful people do?

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What if you could isolate the people most likely to buy an annuity?

You can.  Research by Gallup done for the Committee of Annuity Insurers isolates the best annuity leads by detailing which prospects are most likely to buy annuities.

Here are three findings of the research which can help you focus on the right annuity prospects:

Retention of First Annuity.
Almost all non-qualified annuity owners (88%) still own the first annuity they purchased.  This means that many people have old annuities with old features and possibly under market interest rates.  There is a huge pool of existing annuity owners for whom you may be able to do much better. These annuity leads already know how annuities work and are locked in to their current annuity or doing an exchange because they won’t want to pay the tax. The way you find existing annuity owners is by running an ad that attracts them.  We run an ad for an annuity booklet called “Annuity Owner Mistakes.”  Obviously, the person who would order such a booklet is an annuity owner!  Marketing in this way produces annuity leads that are the perfect target market.  (Before recommending an exchange, please be sure that the annuity owner will be better off and that you make all disclosures for an annuity exchange).
The average age of non-qualified annuity owners is 66.
Non-qualified annuity owners are more likely to be female than male (56% vs. 44%). So if you were buying a list, your best list that would encompass the best annuity leads would be a list of females between age 60 and 70. Gallup has already done the research so it’s easy to target the market that is most likely to own annuities based on their work.

Non-qualified annuity owners have moderate incomes.
Two-thirds (66%) have annual household incomes below $75,000. Only 18% have annual household incomes of $100,000 or more.  This tells us that the best annuity leads are not rich people and that you don’t want to build your business based on selling $1 million dollar annuities.  You will do better with an annuity marketing strategy to sell a lot of annuities ranging in value from $50,000 to $200,000 as your buyers are middle income people.

While too many annuity agents don’t focus their marketing efforts, you know now how to target the annuity prospects that make the best annuity leads.

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