Free Leads! We’ve all gotten those emails, right?

But is it too good to be true?!?

Short answer, in most cases, YES.

Free leads are typically an enticement to contract with a particular carrier or a particular agency.

You may ask, “but they are giving me free leads, what can go wrong?”

A lot, that’s what can go wrong.

NOTE: This is not to say that all lead offers are bad, but you NEED TO READ THE FINE PRINT prior to signing a contract that is tied to a free leads offer.

Remember, that when you choose your FMO they are basically your business partner in the field. You want to partner with organizations who have your best interests in mind, and don’t want to have you sell a handful of policies, burn out, and you then forfeit your residual income from those policies sold.

Now let’s take a look at free leads…


What can happen…

To qualify for these free leads, an agent must sign a contract with a reduced commission level. It is only a few points off the street level, so why not.

After receiving an email to complete the contracting, the agent is now waiting for those free leads (let’s say there are 20 free leads promised).

After a week or so, the contract has gone through and the agent is waiting for the leads. So, the agent makes a call, and another, and another, etc.

Many phone calls later, the leads are finally delivered. The agent has been waiting, not working, for these leads to start selling.

After a week, all 20 leads are worked.

  • Six have false info
  • Five have group coverage
  • Three tell you to leave them alone
  • Four have Medicaid
  • Two have an appointment with you only to say they don’t want to change

Total Sales = 0

Is it always that bad? No, you may get a sale or two. But, even if you do, at what cost? Most agencies will give you a reduced commission to
offset their lead cost.

The top line illustrates street level commission. The second line shows a 5% reduction for lead costs. That 5% can add up real quick. Those “free” leads cost $9 per month per client, or $108 annually PER CLIENT. A more accurate term for free leads is reduced commission leads.


Plus, if you have signed a contract and now want to move your business there is a change they agency will refuse to release your contract. You may be left with a reduced commission after you are done with those free leads unless you have 6 or more months of non-production. That is 6+ months of NO BUSINESS!


What to do

Make sure you are doing your homework!

Who is offering the free leads? Will they release you if you ask? What is their reputation? Will they provide the service you expect from a FMO / Agency?

How are the leads generated? Are they telemarketer leads? What is the script?

What is street level contract vs what they are offering? How much of a commission reduction are you getting for those “free leads”? Will they adjust your contract if you no longer want leads?

Don’t sacrifice your business, your contracts, and potentially your reputation for the promise of free leads.

For information on SMS’s Lead Programs, Networking Programs, and Lead Generation Assistance schedule a FREE strategy session with your Sales Director today, no reduced commissions required!


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