Lead Aggregation vs. Lead Generation: Why Is Lead Aggregation Cheaper, And Should You Use It For Your Business?

If you’re an insurance agency trying to decide how to increase your lead volume, you need to decide whether lead aggregation or lead generation is best for your business. 

Lead aggregation, by definition, is a method of gathering leads that have already been generated, and then sorting and distributing them to other businesses. Lead generation, on the other hand, is a method of producing leads “from scratch”, either to sell to other businesses or to use for yourself. 

Which method produces cheaper leads? Which method produces higher quality leads? Which method produces more leads? Which method of increasing your leads should you choose for your business? 

Let’s take a closer look at each method to help you decide which to employ! 

Lead aggregation does produce cheaper leads, but…

 

Lead aggregators are able to sell leads at a fixed cost per lead that is sometimes (not always) less than the price an in-house team or marketing agency (lead generation) could achieve. For example, they’re able to sell a form submission lead for $30 when generating a form submission lead through search marketing costs $35. 

There are two ways that lead aggregators are able to sell these cheap leads. 

The first way that they accomplish a lower lead cost is by bidding on lower value keywords.  Let’s look a scenario in the Medicare Supplement/Medicare Advantage arena. If you want Medicare Supplement leads, you typically bid on keywords related to Medicare Supplement (“plan f”, “medicare supplement plans”, “medigap insurance”, “med supp plan c”, etc). In order to bring their costs down, a lead aggregator will bid on keywords like “medicaid”, “medicare”, etc. This results in lower quality leads, though. Lead aggregators will sprinkle in some higher value keywords, but will use more general or lower value keywords in order to blend the lead cost. At the end of the day, the lead aggregator’s paycheck comes from the difference of what it costs them to produce a lead and what they sell it to you for. This is important to know if you’re considering using a lead aggregator! Your leads will be cheaper, but they will not be higher quality. 

The second way that lead aggregators can generate leads at a fixed, lower cost is that they will sell the leads multiple times. Be careful when you enter into an agreement with a lead aggregator – they may tell you the leads are exclusive, but the leads may only be exclusive for a period of 5 days, and then they sell it to every other agent. They may break even on that lead the first time they sell it, so they’re able to sell it for a little bit less the next time, and a little bit less the next time, and they’re still making profit. They’ll typically sell it 4-5 times. That doesn’t even include how many times the people they’re selling it to will sell that lead. Lead quality decreases each time it is sold. 

 

Lead generation gets the leads for you

 

Lead generation is Empirical360’s speciality. What lead generation does is produce leads specifically for your business. That’s the major difference in working with a marketing agency vs working with a lead aggregator. Your leads haven’t been handed down from several other businesses or agents, and they’re not low quality with little relevance to your service offerings. The leads you get using lead generation are new, fresh, high-quality leads that are likely to convert if you dial them correctly. 

To hear Elliot (co-founder of Empirical360) share his thoughts on this topic, watch our latest video! 

Have questions about lead generation for insurance-related marketing? We’ve got you covered! Empirical360 is a Google Premier Partner who specializes in insurance marketing on major search engines like Google & Bing.. We know what it takes to get a high return on your investment and grow your agency! Contact us today for a free consultation. 

 

 

Shea Antonucci - Author

Director of Content Marketing


Shea is an expert content writer and is a classic literary nerd! She loves writing highly engaging content and has a knack for making it convert!