YouTube video (presented by Sam/Timothy Schucker) analyzing whether direct mail leads are still viable for insurance sales. It explains what direct mail leads are, describes their high-friction advantage, and lists major downsides — high cost (roughly $50–$80 per lead), long delays (around three to four weeks from mailer return to contact), and reliance on USPS. The video traces direct mail use in life insurance back to 1872 (New York Life) and concludes that direct mail is not dead but is no longer the most efficient lead source; the presenter recommends other lead types for telesales.
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In today's video, I'm going to take on one of the most hotly contested debates in the insurance industry. Are direct mail leads dead? We're going to do a deep dive and see are the insurance industry's favorite traditional lead no longer viable? For our first order of business, let's talk about what direct mail leads actually are. So you have all these mail houses stashed about around the country, and, and they send out millions and millions of mailers to unsuspecting seniors every single day. Now, if you look at the mailers, they are oftentimes extremely generic and a little bit gimmicky in a way. They're super simple, very, very simple and clean design. And they'll usually say something like state approved burial program or senior benefit life insurance or something along those lines. The idea is to basically trick people into thinking that it's some kind of free benefit from the government and get them to mail it back so that an agent can either them or go to their house. Now, the pros of this lead is that there's so many steps somebody has to take to fill in a direct mail lead. First, they have to get the lead in their mailbox, open it, look at it, think that it's significant enough to pay attention to it. Then they have to decide not to throw it away. Take the time to fill it out with a pen or pencil, sign their name to it, put all their personal information in, and then put it back in the mailbox. So the idea of these leads is that tough. There's so many steps that are involved. It's supposed to make the lead higher quality. Now, if you look far back in the history of the insurance industry, this is the first lead that the industry has really used. Now, one of the biggest downsides to direct mail leads, especially nowadays, is that the costs are so high. You're usually looking at like $50 to $80 per lead as gas of driving all these USPS trucks and postal service vehicles that are driving out to everybody's house, dropping the mailers off and then taking them back. Not to mention, people have seen the same advertising creative in the form of a mailer for almost 30 to 50 years now. People are kind of getting used to what this mailer is going to look like. Now, the other downside of direct mailers is how long it takes for you to get the information. So let's say Ms. Jones fills out a direct mailer, she sends it back. Now you have to wait for one, the mailer to go from her house to the Post office, the post office to sort it and send it to the lead vendor and then for the lead vendor to process the lead and send it to you. Especially with how slow the post office can move nowadays, you're looking at a process that can take three to four weeks between the time when the person filled out the form and you're actually speaking to them. Think about all the things that can happen in that time period. They could Google and find life insurance, they could fill out a form on Facebook and somebody else already has contacted them. Or they could already have another insurance agent that comes by and knocks on the door to sell them insurance. The last downside of direct mail is that you are entirely reliant on the usps. So if there's any delays or any issues or anything, there's actually some happened to us when I was selling face to face insurance and relying on direct mail is that the postal service just stopped receiving the leads and they had this big backup and nobody had leads for weeks. There was a drought. And so if there's anything up with the postal service, their entire business is put on hold. Alright, so let's talk about direct mail's history with the life insurance industry. Now I did some digging and did some research. I found out that direct mail's history with the life insurance industry dates as far as far back as 1872. So insurance was actually one of the first companies to use direct mailers. Believe it or not, New York Life Insurance Company was the first company to use direct mail as a form of marketing. So they would send out all these mailers to people, they would send it back and then they would go out and sell them insurance. Now that method has basically stayed pretty much the same all the way until 2022, 2023. Obviously they've gotten more efficient with printing, but the actual form of mailing, the actual form of advertising hasn't really changed much. Now the direct mail that we know it, with the mass amounts of printers and sending them out on mass, millions and millions of mailers that started to gain popularity in the 80s, which is also when a lot of the larger IMO started to take off. This is where the traditional style of what you think of where people say running the system or running FE in the field, that's where that kind of idea sort of originated was the 1980s and early 1990s. Now when the costs were really low for direct mail and there weren't any other options, the only other place people could get life insurance was to call the TV or go downtown to their local insurance agent. This was one of the best ways to get clients. But now, as return rates have steadily gone down and the cost have steadily gone up, direct mail has been a much tougher lead to work. If you're paying three to four times more per lead and late to the party, like literally every single time that somebody fills out a direct mailer, they could also fill out something else. So again, back in the old days, you know, when the only option was direct mail, call someone from the TV or go down to your local insurance agent, it made sense. But now people have Facebook, they have YouTube, TikTok, all these different places where they get access to an insurance agent in seconds and have somebody on the phone helping them get insurance. Nowadays, people really only recommend direct mail for face to face, which is also kind of a declining business just because of the efficiency. So the only reason that you would really work direct mail leads is if you're going to run face to face. But again, there's so many more costs that you have to factor in when you're selling insurance face to face. I personally know insurance agents who are writing $10,000 or more every single week, but they're tens of thousands of dollars in credit credit card debt because they're paying for leads and writing business just to cover the cost of their mailer. So to answer the question, is direct mail dead? No and yes. Because direct mail is not going to go anywhere. People are still going to be at their houses, they're still going to send things in. But is it the most efficient way to sell insurance? Hell no. Absolutely not. It's definitely not the most efficient way to sell insurance. I would recommend using another lead, especially, especially if you're going to be doing telesales. So let me know if you guys agree or disagree with me in the comments down below. I appreciate you guys tuning in and watching this video. If you guys got value from it, leave a like hit the subscribe button and I'll see you guys in the next one. Peace.
