Selling Online: The Sales Funnel

Most agents we come in contact with are familiar with the industry sales numbers for face-to-face sales. While it’s great to have the mindset of using data-backed analysis to transition to selling online and over the phone, the sales funnel is not identical. Several different factors are at play, with the primary two being 1.) how a lead is generated, and 2.) how the lead is being sold.

Understanding The Online Sales Funnel To Maximize Your Bottom Line

Knowing the funnel from top to bottom of any business allows one to decide how to market, where to focus to squeeze out extra profit, and how well the business is actually doing. Knowing you can put in “X” dollars and get out “Y” in profit is a huge indicator of both success versus failure, as well as future growth. Unfortunately, there are a lot of factors at play. If it were as easy as it sounds, every agent or agency would be making money. The process itself is a simple one to understand; it’s effectively putting it to work and tracking your own numbers where the real effort takes place. In the end, the numbers don’t lie; they can be a great guiding force to help you improve and grow. Let’s pull apart a typical sales funnel.
  1. Traffic hits your website.
  2. Your website generates leads.
  3. You work your leads to make sales.
  4. Your sales turn into revenue.
It’s a very basic, streamlined process. But, was it profitable? In order to track the actual profitability of your time, effort and marketing expenditures, we’ll need to track significantly more data. The more data you track, the better you can find the gaps in your own sales funnel and mitigate risk of losing money (or, better yet, improve your return on investment). Let’s go through the list of things every online agent ought to be tracking:
  • Traffic numbers and costs
  • Conversion percentages
  • Good/Bad lead ratios
  • Contact percentages
  • Initial sales percentages
  • Placed sales percentages
  • Annual premium
  • Commissions
  • ROI
If you can track every step of this process, you can calculate putting in a specific amount at the top of the funnel with reasonable expectations of what you’re going to receive from the bottom of the funnel. Any type of marketing campaign you have would need its own funnel to mark it’s profitability.

Gathering Data

As you transition to online sales, you likely won’t have any idea about a few of the aforementioned variables, such as traffic data, conversion percentages and good to bad lead ratios. However, you should be able to decipher the rest of the funnel, to a degree. If you are truly starting from ground zero and have no idea what any of your numbers are, the best you can do is start with industry benchmark averages. Each variable has its own. Let’s go over the variables.


Traffic numbers are the amount of visitors your website gets. There are several ways to get traffic: organically through search engines, by referral from your link on another website, direct (clicking a link in your email, for example), and through paid advertising. We focus primarily on either organic traffic or paid advertising. These two avenues have proven themselves for years, and we can clearly define profitability from each with pretty sufficient accuracy.


When a visitor to your website decides they’re where they need to be and punch in their information to get a life insurance quote, they are now considered a conversion. While this is pretty straightforward, there are different conversion rate benchmarks for every type of traffic type. As a quick example, you might only expect 5% of organic traffic to convert, but you should expect much more for paid advertising, to the tune of 25% or more. This is because you’re able to target more focused traffic with paid advertising, and can direct them to specially built landing pages which convert very high.


When users put in their information, unfortunately, they don’t always feel comfortable enough to give you their name, phone and email right away. Instead, they opt to put in false information. This is to be expected, but shouldn’t occur outside of reason. A high bogus rate, like 45%, means users don’t trust your website, and are simply getting the info they want without committing to buying in any way. A low bogus rate implies users trust putting their contact information into your site, and, either are ready to apply, or at least want more information. Target Benchmark: 33% bogus or less


Making a contact means speaking with a prospect and having a qualifying conversation about life insurance. Good contact ratios are also not an exact science because they largely depend on the lead type, the demographic being targeted, and the systems you have in place to ensure you’ve got the best chance of getting them on the line. For example, a final expense lead from a Facebook ad campaign probably won’t have the same contact rate as an organic lead on a very niche website. This needs to be taken into consideration when calculating numbers, but also hinges on what the lead cost is up front. A low contact ratio is not necessarily bad, if the lead price is extremely affordable where the commission is enough to make it profitable. Target Benchmark: 35% contacted or higher


Making a sale, usually called ‘apping out’ in our industry, means you’ve gotten a prospect to agree to move forward in buying a life insurance policy. For the numbers and calculations we use, a sale isn’t complete until the application is signed, returned, and the process has begun with the insurance company, at minimum. If someone agrees to buy insurance but never completes the paper application or e-signature, it’s not yet a sale. Target Benchmark: 30% sold or higher


We all know every application does not guarantee approval by the insurance company or acceptance by the applicant. Therefore, we need to find out exactly how many applications go from underwriting to fully in force; this is the placement ratio or place percentage. This can be a very large determining factor of how successful a life insurance agent will be when selling online and over the phone exclusively. An agent who sells 100 applications in a month but only places 40 is not doing well at all. Most people would think that’s excellent because he’s placing 40 applications a month, but the cost to get those 100 in the door in the first place is significant. In addition, both carriers and general agencies may have certain placement numbers they’re going to hold their agents to in order to continue submitting business through them. Target Benchmark: 55% placed or higher


Annual premium is, of course, the amount of premiums your clients will pay through the year. When we calculate our premium average, we divide the total annual premium sold by the number of policies sold to give us an idea of what each applicant is worth, roughly. This is another one of the variables which can vary widely. An agent with a focus on young, healthy clients will have low premiums, whereas another agent working an older, unhealthy demographic would likely see much higher premiums. We try to remove the abnormally large policies from the equation so they don’t skew the numbers and make a campaign seem more profitable than it is. In the long run, these large cases shouldn’t be the only thing to keep a campaign from losing money.


Commissions are, of course, what you end up with as a percentage of the annual premiums. But, remember, we need an average for our funnels to work correctly. In different markets, there are huge discrepancies on commission rates, renewals, and other factors at play. For us to effectively make our funnel work, you’ll need to find a comfortable average of commission percentage to use and disregard the excess or extreme cases.


At the end of the funnel lies our return on investment. If we put in “X” amount of dollars at the top of the funnel, how profitable are we? A good or bad ROI is dependent on the person and their own expectations. Something for you to consider is the time it takes for you to recoup your investment. In our industry, not all companies advance commissions, so you may find a great ROI but a long term commitment to make it work. On the flip side, you may find a smaller ROI, but it might work nicely because of the market you’re working advances your pay.

Figuring Out Your Own Numbers

Once you understand what everything means, it’s time to build your funnel. But rather than sit down with advanced spreadsheets or abusing your hand with pencil and paper, we’ve gone ahead and built a couple calculators for you. We had to build more than one to accommodate the different numbers behind both organic and paid traffic.

Organic Traffic Calculator

Here is a link to our organic traffic calculator.

Paid Traffic Calculator

Here is a link to our paid traffic calculator. *Please let us know if you have any additional feedback or calculation requests, and we’ll see what we can do to implement them.