The best way to get an insider’s look at how QuoteWizard is changing the face of the Internet lead industry is to ask an insider. So, we sat down with our Vice President of Operations, Ian Smith, for a more detailed look at how things work behind the scenes.
Ian, our business development expert and tech "superman,” has been part of the QuoteWizard team since 2006. Perhaps even more importantly, he was the person to write our very first line of code, an honor he’s continuously built upon. This makes him the most qualified person to tell you how to get the most out of your online experience.
QuoteWizard: Now, you've been in the online insurance marketing business for quite some time. What are some of the biggest changes you’ve seen over the years?
Ian Smith: Insurance marketing has always been a large industry. Only recently, however, we've seen an explosion of interest and opportunity online. This is partly because of successful commercial campaigns, like perky Flo from Progressive. It is also partly because the Internet has made searching and comparing costs so much easier. The online insurance industry has seen a boom in consumer interest to the tune of about four billion dollars a year (and growing).
QW: Four billion dollars sounds like a fair chunk of change. That’s good news for both Internet lead providers and agents, right?
Smith: It’s great news, but it’s also complicated news. Anytime there's a huge surge of interest in something, there are always people waiting around to take advantage of it. For every great opportunity, there is someone waiting on the corner to sell you T-shirts for it that shrink in the wash after the first time. Know what I mean?
The growth in online insurance sales happened so fast. Agents have had all kinds of experiences ranging from good to okay to terrible. Many agents have managed to build empires based only on internet leads, and that's great. Meanwhile, others are still struggling to find a foothold, and others are or have lost money.
QW: But the footholds exist, right?
Smith: They do, but agents need to know where to find them, and companies like QuoteWizard have to provide them. In those days, everyone made mistakes. A feedback loop didn't exist, so agents couldn't say what was or wasn't working. As a result, we all paid the price by losing some of our confidence in the online platform. Thankfully, we’ve come a long way since then.
We've managed to find new ways to buy and sell leads by learning from our mistakes and developing innovative responses.
By learning from our mistakes and developing innovative responses that get to the root of the problem, we’ve managed to find a new way to buy and sell leads.
QW: Okay, Ian—since you’re willing to open up here, why don’t you talk to us about the root of the problem? What do you think caused those early mistakes?
Smith: The short answer? Supply and demand.
QW: And the long answer?
Smith: Well, up until a few years ago, the only constant in the online insurance lead industry was change. As a young industry (we’re talking the Dark Ages of a pre-2009 era), the overall growth of online leads was pretty slow. The only people buying leads were a small number of high paying early adopters, agents who were on the cutting edge of online marketing. For them, there were always enough high intent-search leads to go around.
You can see where this is heading. This handful of agents had great success—with quality leads, how could they not? This only drove more and more agents to try and duplicate those results. Demand for Internet leads skyrocketed, but supply was sparse. Once bigger buyers like call centers and corporate agencies entered the picture, there simply weren't enough high-intent search leads for everyone.
Smith: Uh-oh is right. To accommodate all these agents and corporations scrambling to find leads, businesses selling consumer information had to get creative. Instead of using the methods of lead generation that had worked in the past, they turned to gimmicks to get fast and substantial results. "Enter your information for a chance to win a $500 gift card!"; "Sign up and get free access to our website!"; "Give us the names of ten people you know and we’ll buy you a pony!" You get the idea.
QW: So you're saying that once the poorer quality leads came rolling in, people could no longer rely on online lead-generation?
Smith: Interestingly enough, I wouldn’t say the poorer quality leads were the real culprit. There have always been low-intent consumers out there, and every agent knows that every lead—no matter how bad—has the potential to turn into a sale.
The biggest problem was that there was no place for constructive feedback or growth. Some bad leads wouldn’t break an agent, but if they got all bad leads, it might—and we didn’t know just how many of them were bad until it was too late. Everyone was busy trying to meet demand, and agents were losing faith in providing quality feedback. We didn't know what was happening out there or how it was impacting agents. We also didn't have a framework in place for making the changes that needed to happen.
This issue—having our ears plugged and our eyes shut—isn’t unique to the insurance industry. If you look at other overnight sensations like the gaming industry, you find a similar tale. Back in its day, Atari was a huge cultural phenomenon. Once people embraced idea of having an at-home arcade, there was a huge call for unique and fun games, and developers scrambled to create them. But as was the case with the insurance lead industry, there was no quality control and no place for consumers to go with their feedback. Many of the games were replete with glitches and poor development, but consumers had no way of knowing that until their money was already spent.
Nintendo changed the entire gaming industry. They came up with their own system by taking things one step further than Atari. They not only implemented quality control mechanisms to ensure good, consistent game production, but also created a customer feedback loop that encouraged consumers to voice their concerns. Opening the doors to actual, everyday users of their product allowed them to grow and become one of the most recognizable names in the world.
QW: When did things start to change for the insurance lead industry?
Smith: We have always looked for ways to be client centered, but we made huge strides for the industry in 2013. Dissatisfied agents are not what we’re in this business for, so we had to find a way to stabilize the industry.
QW: “Stabilizing the industry” sounds easy, but how did you actually accomplish it?
Smith: The same way Nintendo did: with better quality standards, and with an easily accessible way for our agents to communicate with us. For the past four years or so, companies like QuoteWizard have been taking huge strides in agent feedback analysis. We put the focus back on agents—and on what they’re experiencing out there in the trenches. No one knows better than they do how to gauge what’s going on in the industry.
The achievement in this area I’m proudest of is called QuoteWizard IQ. It takes agent-reported returns and sales and uses machine learning to determine which leads we should generate and distribute in the future. It lets us spend our marketing dollars more effectively and move budget to sources and ad placements that produce good results. Just as importantly, it lets us cut traffic from sources producing bad results for our agents.
QW: No bad leads—that’s your motto?
Smith: It’s a little more complicated than that.
Even low-quality leads can turn into sales, and it would be doing our agents a disservice to dismiss these opportunities. Every source is constantly adapting their strategy and marketing messaging to try and improve conversion rates. When a source declines in quality we cut distribution automatically and, if it gets bad enough, we will shut them down entirely. But likewise, when they show improvement we will improve their distribution.
Everything is managed to a predicted Cost Per Application (CPA) for the end agent buying the lead in order to ensure a consistent experience. We can tell, just by looking at these numbers, that we’ll be better off funneling most (but not all) of our resources into the vendor with the low CPA. We’re putting our money where it can do the most good—which means our agents are, too. The resulting balance is better for all of us.
QW: You seem to be discussing what’s better for agents, what’s better for QuoteWizard, and what’s better for the industry as a whole. In your mind, are all these things linked?
Smith: Absolutely. The only reason the internet lead industry has succeeded at all is because of agents who trust the system—and trust us—to help grow their businesses. It goes back to that “looking for a foothold” concept. It’s a symbiotic relationship. We need agents willing to climb, and they need a lead provider they know isn’t going to leave them hanging.
QW: What does this mean for individual agents interested in pursuing and purchasing leads online?
Smith: In those Dark Ages we talked about before, there was no way for agents and lead providers to communicate. We thought we were selling great leads and contributing to the industry in a positive way, but in reality, agents were struggling and feeling frustrated at every turn.
Since we’ve opened our doors to feedback and now operate on a more transparent, data-driven level, we have a much better working relationship with our agents. Agents are encouraged to turn to CPA scores to make their own decisions regarding vendors and cost-per-lead applications, and we do our best to be upfront about what they can expect from us as a lead provider.
QW: And what can they expect from you as a lead provider?
Smith: In addition to leads? Just about everything. Ours is a full-service experience that puts agent needs first. We’re one of the only lead providers to offer a liberal return policy that empowers feedback and increases agent ROI. We also limit the distribution of each lead so that resources are never over-mined.
We’re also very tech- and data-driven, which is of course near and dear to my own heart. Agent accounts are designed to integrate easily with third-party office systems, and we support all agents in their attempts to quantify individual sales results. Educational resources like these are a great way to start learning not only how to reach a better outcome, but to understand the numbers behind the outcome so that the results can be replicated at a future date.
QW: Is there anything else you’d like to add before we bring this interview to a close?
Smith: I can’t overstate how important it is for agents to track their ROI on leads every month and to communicate what they are experiencing. Often times a quick call to Client Services team can enable us to greatly increase the effectiveness of your marketing dollars.
Things aren’t changing quite as fast as at the beginning of the millennium, but there will always be room for growth in the Internet lead industry. With our agents’ help, we plan on being a leader in the industry for many years to come.