Why Insurance Carriers need to support and promote DMCOs over Aggregators and Leads Vendors

As industry marketing professionals we’ve all done it.  Done ‘what’ you ask? We’ve all gone online and done a Google search for auto, home, health, life, and business insurance quotes just to see who’s on page one. Of course, we all know that page one is the only page that matters; indeed it is the most expensive place to be found online.

Lately, joining the ranks of the legacy direct writers like GEICO, Progressive, Esurance, and Amica, and leads vendors like EverQuote, you are now finding insurance aggregators like The Zebra, Insurify, GoGi, Policy Genius, Coverhound, and Next-Insurance (just to name a few).  When reviewing their landing pages you will find a common theme of how these aggregators shop and compare pretty much the same legacy carriers that still utilize the local agency distribution channel for the bulk of their sales.

The purpose of this article is to help the reader understand why this trend is not really in the best interests of the participating legacy carriers when compared to the alternative of promoting and endorsing the use of DMCOs (Digital Marketing Co-Operatives) which leverage the underwriting, financial, technology, and relationship building capabilities of the local insurance agent.

Digital Marketing Co-Operative a.k.a. DMCO – A DMCO is a modern application to the old tried-and-true concept of Marketing Co-Operatives.   Back in the heyday of yellow page (YP) advertising, I personally managed my district’s yellow page co-operative for the 12 agencies sharing the double truck ad to make sure we correctly appeared in the front of the yellow pages under the insurance section.    

That said, in order for a DMCO to exist, one must have an exclusive leads distribution engine that allows the DMCO member to utilize any URL address for the subscribed request type and zip code he/she controls.  This, of course, is much better than a YP ad because it assures an exclusive lead. FYI – most agency partnership and franchise web sites still utilize the old YP format by allowing the online shopper to choose the agent to whom to send the quote request.  This is fine for the consumer, but not so good for the agents (especially if all the agents are paying the same price to be found, but are not receiving an equal number of leads).

That’s why we built 1Lead1Buyer.com (1L1B) and that’s exactly how this subscription-based platform works within the co-op’s website via an imbedded Iframe widget.  To see a 1L1B subscription in use, visit FloridaInsurance.com.

While FloridaInsurance.com is a DBA for the Lee R. Rogers Agency Inc. exclusively operating in Florida, Mr. Rogers is well prepared to add outside producers to his group.  It’s important to note that anyone who lands on FloridaInsurance.com, and requests a quote, will open the member producer’s technology of choice, based upon the quote request type and zip code he/she owns, and thus guarantee an exclusive lead!  So while the Florida Insurance Group is not a true co-operative, the 1L1B platform can support any type of service organization that wants to distribute exclusive leads to anyone in the organization by request type and zip code. It’s just that simple and a better alternative to using leads vendors or separate websites for each location.

And Now the Why

We all know that everyone listens to the radio station WIIFM (What’s In It For Me).  Insurance companies are no different.  That said, why would legacy insurance carriers want to support and promote a DMCO?  Here’s why:

  1. Minimal financial investment – Since these same legacy carriers already utilize an established independent agency distribution channel, there is no need to incur any additional marketing expenses to promote DMCO participation to their appointed agents.
  2. Increased Revenue – A successful DMCO will result in greater sales by the participating agents on behalf of the legacy carrier.  A legacy carrier that acts in the capacity of either a DMCO administrator or affiliate partner will also be able to promote their own company and subsequently add producers in the process.
  3. More Profitable Growth – Everyone, including the legacy carriers’ marketing departments, knows the 80/20 rule.  They especially know the 20% of their appointed agencies that are contributing to their most profitable growth.  While most of these same carriers have traditional co-operative advertising programs to help these agencies grow, none have yet to consider supporting these same agencies with a DMCO sponsorship.
  4. Leverage Q&B Technology – Most legacy carriers are now investing heavily in quote & bind (Q&B) AI-assisted web forms for their direct channels.  While this is understandable, if they fail to offer these same web forms down to the individual producing agent, they will be missing out on the opportunity for exponential growth.  Why? It’s a simple matter of relationship building and the multiplier effect of these local producers using the legacy carrier’s Q&B web forms within their own social media pages, emails, web sites, and even DMCOs.

In Summary

Aggregators and leads vendors will never be able to develop client relationships.  Additionally, leads vendors will never offer truly exclusive leads to be delivered into the technology of choice for agents.  This requires them to relinquish control of the data, something neither the aggregators nor the leads vendor will do. Why? Because both know that we agents, on our best day, only have a 20% closing ratio, which means that the lead data still has value and can be resold.  In the case of a DMCO, the exclusive lead data can be imported into the agency’s CMS/CRM automated email marketing system with a much higher probability of eventual success in closing the sale. This, of course, is better for the legacy carriers too. DMCOs combined with Q&B web forms down to the individual producer level are the future.  They are the path to success for legacy carriers that still support the local agent. Aggregators and leads vendors will become less useful for all the reasons stated above.

 

About Carl Moulton

As a second generation insurance professional having served over 30 years in the industry, I am passionate about advancing the success of the local agency distribution channel on line for the benefit of the insurance consumer. It is for this reason Lee Rogers and I have created datMoose, a Co-Op Digital Marketing company. While being a separate business as Florida Insurance Group, datMoose operates as a supporting business along side of the Florida Insurance Group in which I am still the Operations Manager. To learn more about an active Digital Marketing Co-Op being operated by datMoose, please visit InsuranceComet.com. I am pleased to be a part of Florida Insurance Group which takes the best of both worlds, i.e. the speed and convenience of the web without giving up the role as the consumer advocate with personal service and help to the insurance consumer.

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