5 Reasons Why You Should Pay More For Your Car Accident Leads

Why Pay More for Car Accident Leads?

It’s a saying that’s been around for generations…

“You get what you pay for.”

And it’s been around for a reason. This is especially true when you’re talking about legal lead generation, and in particular when you’re talking about car accident leads, which tend to be one of the most expensive practice areas from an advertising & marketing standpoint. In addition to the fact that you have to question a lead that costs less than a single click on google, you have the fact that the ABA (and pretty much every state bar association in the US) has strict regulations on attorney advertising, which means that by outsourcing your marketing to a less than ethical lead generation company could land your law firm in hot water with the bar.

With that, here are 5 big reasons why you should think about paying more for your car accident leads: 

1. The CPL (Cost Per Lead) is directly related to lead quality


This is the big one, as it directly relates to whether or not you’ll be successful with any legal lead generation campaign, and it’s not only possible, but probable, that cheaper leads end up with a higher cost per signed case when all is said & done. 

Obvious caveat here – make sure you’re doing business with a reputable & ethical legal lead generation company. You shouldn’t buy leads JUST because the price is high, some companies will charge a ton of money for crap leads… charging a lot of money for them doesn’t make them less crappy. So make sure you’re asking the right questions before you buy personal injury leads. That said, let’s assume the lead generation company is reasonably ethical and smart enough to understand that there’s a lot more upside to a long term client that you make a fair margin on, than there is to a one time big profit and a client leaving pissed off. 

Using that assumption, let’s say the lead gen company needs to make a 20% gross margin on the retail lead price in order to cover operating costs & make a little money for themselves. Now let’s say you’re paying $250 per lead for an MVA Lead generation campaign with that company. Which means this company is going to want to get you as many quality leads as they can, as long as the cost per lead is $200 or less. 

Most firms will want volume once they know that the leads are converting, so from the lead generation company’s perspective, the most profitable play here is to maximize volume by getting as many leads as they can without going over that CPL. As soon as the cost per lead goes over $200 to generate, the lead generation company is going to have to start scaling back… scaling back their cost per click, scaling back their more expensive marketing campaigns, scaling back the total amount of ad spend or content gets allocated to that area, etc. 

Now these would all result in lower volume, and probably lower quality. But the real risk here lies if the price per sold lead is too low, and the lead generation company is forced to abandon things like organic SEO or google adwords, both of which are historically the highest converting advertising medium online, because there’s inherent intent shown when someone takes the proactive step of searching google for a lawyer or legal information. When you start to look at display advertising, social media, affiliate marketing, email blasts etc… the intent gets lost and the lead quality is directly affected. 

To better understand the math from the lead gen company’s standpoint, let’s look at the conversion rate calculation for a $200 lead: 

  • Average Cost Per Click for an MVA Campaign on Google Adwords: $15 
  • Average conversion rate (Percentage of website visitors/clicks who fill out a form or make a phone call): 10% 
  • Throwaway rate (Leads that can’t be sold because they are unqualified – have an attorney, found at fault, etc): 30% 

$15/click x 10 = $150 per lead + $45 (30% throwaway) = $195

And these are very optimistic numbers. Based on advertising costs as of August 2020, any lead generation company that claims to be able to sell you exclusive auto accident leads for less than roughly $200 per lead, or workers comp leads for less than $100 or so, is without a doubt doing something other than search engine marketing to generate at least the bulk of their leads. It’s just not possible to sell a lead for lower and still make money if you’re paying for search based leads. So by paying too little for auto accident leads, you may end up shooting yourself in the foot and paying for leads that convert at a much lower rate, leaving you with less cases for more money.

2. The Cost Per Lead is directly tied to Lead Volume



This one is pretty self explanatory, especially going back to the example above. Once the cost per lead is set, the smart lead gen company wants to max out volume without going over their target CPL, so any increase in the clients CPL should be directly applied to the advertising bids in their area.

To use a real life example, one of our clients was very happy with the MVA lead we were sending their law firm, and wanted more. We had previously been at a cost per lead of $275, and they wanted to make a splash. So they did a test at $425 per lead and we immediately moved our advertising bids on all MVA campaigns in that state by 35%. 

In doing so, we increased our impression share by over 50% and our average position on the google search results from 2.8 to 1.5, meaning we were getting more clicks from arguably more interested people. 

The end result was a 250% increase in lead volume and a conversion rate that went from just over 20% to just over 30%, leaving them with three times more cases at roughly the same cost per signed case as when they were paying less per lead.  

3. You don’t want to incentivize lots of low priced car accident leads.

When speaking to your lead generation partners, you should make clear that you’re interested in more volume (assuming you are), but not at the expense of good quality, and you’re willing to pay for high volumes of that quality. Like most partnerships, the one between a law firm and a legal lead gen company works best when there is clear and frequent communication. A law firm who is insistent on both high volume and low lead prices opens themselves up to a situation where the lead gen company is forced with a few options, none of them good: 

    1. Tell the client this isn’t going to work and either refund the money or walk away from the deal before it gets started. 
    2. Generate a small number of good quality leads at a tiny gain (or loss depending on how the campaign goes) and make next to nothing.
    3. Start looking at less than stellar marketing campaigns like affiliate marketing, co-reg, email & sms blasts and robocalls to generate large numbers of leads at a low cost. 

The only way for the lead generator in this scenario to make money is with option C, which opens up lots of potential issues for all parties involved. If we can recognize the situation, we’ll always choose option A, or give it our best with option B and then use option A as a backup if it’s not working. That said, we’re arguably more reputable than a lot of legal lead generation companies out there. And you get stuck with one of those less than ethical companies, you could end up with what you wanted – a lot of car accident leads at a low cost – but you may find that you’re not converting many while wasting lots of resources chasing the leads around. Or worse, because….  

4. You DO NOT want to find yourself in trouble with the Bar Association. 

Let’s be real here – as the lawyer in the situation, you have a lot more to lose than the lead gen company. You have years of your life & hundreds of thousands of dollars invested in your law degree and state license, and it can be taken away in a heartbeat if the bar association doesn’t like something you did. The ABA and all state bar associations have regulations on attorney advertising to some degree. As of now, all are perceptive to working with lead generation companies, but certain types of advertising or solicitations are frowned upon and can even be grounds for discipline. In one case in 2016, a lead generation company sent a robocall to one of the plaintiff attorneys on the steering committee of the IVC filter mass tort lawsuit… about joining the IVC Filter MDL as a plaintiff! Needless to say, he wasn’t very happy about the call and filed a class action lawsuit, which resulted in the attorney getting suspended and fined. There are numerous stories similar to this, where legal marketing firms do unscrupulous things to try and get lots of leads on the cheap, and the one that pays the price in the end is the law firm. So make sure you do your homework on lead generation companies and make sure that everything they do is in line with the ABA and your state bar associations rules on attorney advertising. 

5. You’re profitable with the car accident leads and want to continue getting them. 

Lead generation is a business, and just like any other business, we need to make money for business expenses, to feed the employees families, etc. If a lead generation company has a client in a particular state and/or practice area who is problematic in some way – won’t adjust the CPL to bring up quality/volume, high return percentages, frequent pauses or billing issues, etc – and another potential buyer comes along offering more… what do you think that company is going to do? What would you do? 

The clients who “get it”  – the ones who communicate their needs and what they’re seeing on their end, the ones with an appetite for volume who are willing to test new campaigns and CPL’s in the interest of long term success, the ones with low return rates… are worth their weight in gold. There is no scenario where we would sell car accident leads in certain markets with great client situations, even for double or triple the lead cost, because we know it’s not worth chasing something new when we have a stable client with good expectations who understands that this is a partnership. 

The surest way to NOT be included on a list like this, is to insist on low CPL’s. 

So while low prices are often a good thing, when it comes to something with such upside potential and downside risks, car accident leads is not the place to gamble on low priced goods.

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