image description
, Author: Craig Fuher

12 Reasons Not To Buy Insurance Leads

When you buy insurance leads you never know what you’re going to get. While it may seem like an easy way to grow your book of business, in the end, it may end up costing you more – more time, money, effort, and lead to fewer quality sales.  

There are no shortcuts when it comes to growing your book. But if you’re looking to buy insurance leads, it’s important to realize that doing so carries several risks and potential drawbacks. While buying leads might seem like an easy way to find more customers, the reality is that insurance leads for sale aren’t always the right fit, and purchasing these leads could even hurt your business.

In some cases, buying and selling insurance leads falls into a legal or ethical dilemma, and even if everything is above board, there can still be downsides in areas like lead quality and the opportunity cost of focusing on these paid leads.

In this article, we’ll explore 12 reasons to not buy insurance leads, even though doing so can seem so appealing at first. 

If you want to acquire and convert more leads organically, we can help. Click the button below to learn more.

New call-to-action  

One of the biggest problems with buying insurance leads is that leads might not have sold to you legally. Depending on factors such as your location, there may be certain laws, such as around privacy, that insurance leads for sale run afoul of.

For example, the lead generator might have been misleading consumers to give up their information, with consumers not aware that they could then be contacted by an insurance company or agency. Even if the lead company that sells the list is the only party in the wrong legally, you still might want to distance yourself from these situations by not buying insurance leads.

#2 The Leads Might Not Have Been Sold Ethically 

Even if the leads were technically sold to you legally, they still might not have been ethically acquired and sold. Perhaps a lead vendor found a loophole in privacy laws that let them sell you insurance leads, but just because you can do something doesn’t mean you necessarily want to involve yourself in that area.

Think about all the public outrage around personal data privacy that has prompted governments and companies to adopt new rules. Even when something is legal, it might be questionably ethical and not always a good look for those that get involved.

#3 You Don’t Know the Quality of the Leads

Another big issue with lead lists is that you don’t really know the quality of the leads you’re buying. The seller might claim that these insurance leads are high-quality ones who are ready to make purchasing decisions. 

But especially if this is your first time buying from that lead generator, it’s hard to know how true that is. Or maybe they’re looking for health insurance or auto insurance, whereas you sell professional liability policies. In contrast, when you generate leads yourself, you know firsthand if someone is a qualified lead.

#4 The Leads Might Not Be Exclusive

Related to not knowing the quality, you might not know if you’re getting a truly exclusive lead. Do you know for sure whether those leads haven’t also been sold to a competing insurance agent? Or do you know if those leads were already contacted about insurance a few months ago and are now being passed on to you? Or are those leads also being sold to banks, real estate agents, and similar companies at the same time, causing these leads to get bombarded by marketing messages? These are all issues that can make buying insurance leads less effective.

#5 The Leads Might Not Be the Right Fit

Even if everything goes right in terms of getting an exclusive, legal/ethical list full of theoretically high-quality leads, you still don’t know if they’re necessarily the right fit for your insurance agency. 

When you buy insurance leads, you might be getting a list of people who are business owners, for example, which might make you think they’re prime candidates for your commercial insurance policies. But maybe the leads aren’t looking for the same type of business insurance you sell. For example, a list full of solopreneurs might not be a good fit if you specialize in selling workers’ comp policies.

#6 You Might Be Starting on the Wrong Foot

When you buy insurance leads, you also risk starting on the wrong foot. Although these leads might check lots of boxes regarding what you’re looking for in leads, that doesn’t change the fact that you still then have to conduct cold outreach. 

These leads might be a bit more defensive at first, wondering how you got a hold of their information. Even if you eventually win them over after cold calling or cold emailing, this might take more effort than if you met leads organically, such as at a networking event.

#7 Buying Insurance Leads Can Complicate Marketing Results

Another issue with buying insurance leads is that these paid leads can skew your marketing results. For example, if you’ve been sending out email marketing newsletters, your open and click-through rates might look very different before and after adding paid leads to your subscribers. While it’s possible to separate these leads into different lists, that can still make tracking your insurance marketing results more difficult than it used to be. And in other channels outside of email, it might not be as easy to track separately.

#8 The ROI Can Be Tough to Calculate

Similar to how paid leads can complicate marketing results, the full return-on-investment (ROI) from buying insurance leads can also be tough to calculate. While you can track how many of those paid leads become customers, that only tells you part of the true equation.

For example, if you get off on the wrong foot with a paid insurance lead and they leave you a bad review, that could carry a cost beyond what you spent on acquiring insurance leads for sale. In that case, it’s harder to see if it was worth it to buy insurance leads instead of acquiring them organically.

#9 Buying Insurance Leads Can Eat Into Your Marketing Budget

 Not only can it be difficult to calculate the full ROI of paid lead lists, but also the upfront cost can eat into your marketing budget, making you less effective in other lead generation areas. For example, if you spend $1,000 on a lead list, that could mean you have to forego $1,000 in LinkedIn advertising or direct mail.

And not being able to spend as much in these other areas could slow down your business, considering how different marketing areas can feed into each other. For example, having less of a LinkedIn presence could make your blogging less effective, as you’d have a smaller audience to share your articles with on social media.

#10 Managing Paid Leads Can Be Time-Consuming

Buying insurance leads can carry enough challenges, but then managing these paid leads can also become an issue due to the time you would need to dedicate. For example, you may want to ask paid leads to opt-in to receive further emails from you beyond your initial outreach, so that takes time to manage and separate the opt-ins from the opt-outs. From there, you may have to put in extra work to build relationships with those who opt-in, as you’re starting off colder than if you were, say, referred to these leads or met them organically.  

#11 You Could Put Your Reputation at Risk

A big problem with buying insurance leads is that even if everything seems to be okay legally and ethically, and even if you seem to be getting on well with managing these leads, your reputation could still be at risk at all times. All it takes is one frustrated, bad lead to leave a negative review, file a complaint, or take similar negative action that puts your reputation at risk. And even if nothing that dramatic happens, you still might unknowingly be creating a reputation for yourself as a pushy salesperson by reaching out to so many cold leads, rather than building organic relationships.

#12 You Might Miss Out on Better Marketing Opportunities

Lastly, you may want to think twice before you buy insurance leads because you could be missing out on better marketing opportunities. As mentioned, calculating the full ROI can be tough, and you might have less budget for other marketing activities, like creating a direct mail campaign. Plus, spending time managing paid leads can take time away that might have been better spent in other areas, like blogging or connecting with a potential customer on social media.

These other areas can require patience, so if you switch your focus to paid leads too quickly, you might be missing out on better marketing opportunities that might have yielded more if you gave them a proper chance. 

Don’t Fall Blindly for Paid Leads

Buying insurance leads might seem like a quick ticket to success in the insurance industry, but as these points demonstrate, there can be several disadvantages to paid lead lists. Building up organic leads might not be as straightforward a way to find potential clients, but the long-term benefits can be worthwhile. And even if you’re not having much luck organically, there are still other paid routes to take, such as social media advertising or search ads, that can yield results without the same risks as buying insurance leads.