September 27, 2010 - No Comments!

Customer Acquisition Workshop at midVentures Lunch

Julian and Seth shared their experiences on customer acquisition. Julian is the founder of Chicago Micro. Seth is the founder of InsuranceLeads.com which last year was ranked the 24th company in the INC 500.

Seth Kravitz
InsuranceLeads.com
Started 2004
lots of phone calls, lots of heavy biz development
#24 in the INC 500

No presentation - just doing questions and answers

Q: Tell us more about your business and how you grew
A:
Seth:
Started as affiliate in lead gen space for insurance companies
One day they realized that they didn't want to be middleman anymore
2007 made switch to providing the service themselves
they didn't have a product for four months
didn't have anything other than a name
signed up 400 agents on trust with nothing but that name
took credit cards, took deposits - used that money to grow
sign up a bunch of agents as quickly as possible
were 30 commissioned sales people - call all day long
tons of direct marketing
email constantly
if people tell us not to call back, we call back in 2-3 weeks
one of most well-liked brands in the lead gen space

Julian:
if your'e thinking about starting a company, the moral of the story
started with a amex card - now he has 8 figure revenue
had 15 banks laugh at him
got kicked out of a business
if people already do it, then you have a customer

Q: Talk about your conversion funnels
A:

Julian
we're still trying to figure it out
we make lots of phone calls every day
make 100 phone calls you'll get one customer
we meet with every business owner that does business with us
look them in the eye and say "how do you want us to do business with you?"

Julian:
consumer end:
everything you can imagine: social media, ppc, seo
huge amount of affiliates - probably largest in insurance space
probably pay $1mil / month in affiliate payout
if you're doing B2C affiliates can be one of the most powerful ways you can work

agent end:
white papers - didn't believe in them until recently
have generated 8000 leads this year with white papers
tons of email marketing
don't rely on just one analytic tool
google analytics: generic tracking tool
crazy egg: what are people clicking on?
reinvigorate: new one just came out
try to put information through lots of eyes in the company

Julian:
don't be afraid to spend money on it

Q: how do you get people to believe your product before it exists?
A:

Seth:
Insurance leads was an existing market
we weren't reinventing an industry
weren't asking people to be an early adopter
for leads: the pain point is conversion rate
selling point was that our leads converted better
treat people just like friends

Julian:
give them your cellphone number
if you're selling to doctors, put on a golf tournament

Q: (ron may to Julian) You sponsored a bunch of events. What has been the result of all the sponsorships - has it made you feel good or have you gotten real business out of it.
You used to be a top sales guy at CDW - what are you doing differently now?
A:
Julian
CDW is the greatest company in the world
I'm not doing much differently than I was doing there
they taught me everything I know
there's two types of companies:
1. aircraft carriers - press a button and destroy a nation, but slow
2. speed boats - stop on a dime
doesn't sound like he's gotten much conversion on the sponsorships

Q. What has worked out for you?
A:
Julian:
don't fall in love with every guy that wants to work for you
don't believe everyone that tells you they can give you the world

Seth:
INC magazine: huge story about a huge mistake they made last year in this month's thing
hiring sales manager outside the company hasn't worked
find the great sales guy and make him a manager
we've gotten great people and horrible people every source that's out there
great sales people talk a great game - wouldn't expect anything else from them
need to be the most reliable and trustworthy people you have
sales people should feel like partners - compensate them like they are partners
first few years - every sales guy made more than the founders
cpm advertising has never worked well for us
more direct, more face-to-face we can be, the higher the conversation rates
phone > email

Q: since you are a new company, did you have to undercut the price of the competition?
A:
Seth:
we don't give away free leads
if your product is better, dont give it away
our pricing is a bit higher than the competition
if we discount our product then that means they're not worth as much as the competitors
its all about value perception of the product
it's worth it, that's why it's not free

Julian:
I'm in a cutthroat market
people do business with people they like
if you show a company that you care and you can deliver
if you return their emails, if you pick up the phone and call them, price isn't an issue anymore

Q: Financing?
A:
Julian:
I sat out my 6 month non-compete and got to know my son
then the market went to hell
all the assets I thought I had were 30% lighter
i had no way to start except with an amex
I put $25k on Amex - maxed it out, then paid it off
they bumped up my limit, I did the same, over and over again.
Then he had a story they told them.
Went to banks... finally got a line on his accounts receivables
Don't be afraid to sign on the dotted line if you are fully committed

Seth:
We can't rely on inventory
we sell a service
banks laughed at us about loans
banks don't understand digital products, that they can generate revenue
had to survive off of credit cards - paid rent off of CC
no one wanted to give us any money
you're not going to get a loan from any bank to develop an iPad app

Q: If you go to bank, don't let them pull your credit score until the very last step - it will ding your credit
A:

Julian:
I dont even put my number down anymore.
Get a tax ID

Seth:

Q: How long do you go with a new lead gen channel that's not working before cutting it off?
A:
Seth:
we have an experimental budget for all new marketing activities
we run with the budget until it runs out
Crowdsourced PPC management - getting mixed results
you need to give things a chance to work

Julian:
sales people should show results in 90 says
social media: brought someone on as a consultant

Q: how do you find good sales people?
A:
Julian:
We are the silicon valley of sales people and tech
there are 10,000 well trained sales people in chicago alone because of CDW
from a sales perspective, this is ground zero
there's a lot of talent that is out there
look everywhere
you're going to get people that get it and people that don't
you'll fall in love with everybody you meet - be careful about that

Seth:
we never found one great place to find people
there's no formula
craigslist, monster - no one good source generated value
treat everyone like they are a partner
they get more as the company grows

Q: Do sales people need good product knowledge?
A:

Seth 45% (? couldn't quite hear) of agents are former insurance agents
having product knowledge is one of the most important aspects of sales
right now there are a bunch of unemployed sales people
now is the time to try and find them

Julian:
everyone wants to be part of something in its infancy
most people never had a shot
it might be easier to find people than you think

Q: Are there industry analysts that you cover
A:

Julian:
when I was at CDW i had to go out and talk to analysts
I met with morgan stanley sales guys etc and tell them how things were going
now i'm just a small fish, they probably won't even return my calls
I'm so wrapped up in what i'm trying to accomplish
my entire company is my analysis
I try to improve what bothers me in my analysis every day

Seth:
I hunted down an editor at AMS and convinced them to write an article about us
LinkedIn has generated millions of business for us
LinkedIn is the greatest sales tool you have
I've made more business from LinkedIn InMail in two days than 2 months of trying to get them something later
trying to get people to write articles with you
we are natural born sales people
we are not good at tech
we made a massive update to the entire lead gen distribution platform
it processes 100k leads a month
the system failed a lot
replaced existing system on july 1
normally do $1.6 mil in July. Did $400k instead.
turns out nothing worked.
agents in mass got leads from alaska
was a huge debacle
took months to repair damage of revenue and
spent last 7 months writing a book for their demographic
what can they do to help their business
we're going to give this book away for free to all of our agents
build relationships for your clients as well
we didn't lose a lot of clients during that massive failure because they trust us

Julian:
build world class systems
if you don't have world class systems you will never scale
sales and systems

Published by: Greg Baugues in Business

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