What Is Lead Source ROI in Insurance?
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Lead source ROI tells you whether a lead vendor pays for itself.
What it is
ROI = (what the source earned you − what it cost) ÷ what it cost.
For a lead vendor, that is (commission from its policies − lead spend − the cost of servicing them) ÷ lead spend. Above 0 the source made money; below 0 it lost money.
A worked example
Example. You spend $4,000 with a vendor in a quarter. Its leads become policies that earn $12,000 of first-year commission, and servicing them costs about $2,000. ROI = ($12,000 − $4,000 − $2,000) ÷ $4,000 = 1.5, a 150% return.
Two sources can bring in the same premium and still differ a lot: the one that cost less to buy has the higher ROI.
How Producify works it out
On the Producify Marketing ROI tab, ROI is Net today ÷ spend.
Net today is office revenue − spend − producer commission, and office revenue is the premium times your office rate. There is no service-cost line, so it will not match the formula above to the dollar. Read the ROI page walks through the tab.
The same sum, the way the ROI page counts it
Example. A vendor's leads write $50,000 of premium at an office rate of 10%: $5,000 of revenue. Less $2,000 of spend and $1,000 of producer commission, Net today is $2,000, and ROI is $2,000 ÷ $2,000 = 100%.
Frequently Asked Questions
Should I include referrals in lead ROI?
Yes, as a source that costs nothing. With no spend entered its ROI reads as a dash, so compare it on Policies and Net today.
Does ROI count renewals?
The first year is the usual measure. A source whose customers stay is worth more over time: How to measure internet lead ROI shows the sum.
See which sources pay off
ROI for every lead source, after spend and producer commission.
Run your own numbers with the free insurance lead ROI calculator.