Facts – Insurance Marketing Agency Return on Investment – ROI

Many an insurance marketing agency plugs along, struggling by each and every year they manage to exist. An enormous problem that is overlooked is that no prospecting plan exists. Finding out the ROI, return on investment, is a critical step before an agency market plan can be enacted.

Prospecting for new clients is a step where countless agents fail to manage time and cost in an effective way. In turn, prospecting for contracting new brokers is the bloodline to survival for the insurance marketing agency. An abundance of ineffective use of time and money, along with a foolish prospecting plan is what leads to the demise of both groups. In insurance marketing, money is overwhelmingly the key issue. Along with money available to spend, it must also be understood that time is money. The ultimate goal of insurance representatives is making sales. With marketers, it is recruiting brokers that make sales.

To implement a prospecting plan without maximum benefits is detrimental to a rising insurance career. This planning must be preceded by calculating your ROI, return on investment. How much is it going to cost to make a sale, or what time and cash investment is necessary to contract a producing broker? You cannot afford to just break even. Therefore, you analyze your prospecting methods to make sure that executed sales provide you with an income profit.

There are five main modes of prospecting. They involve direct mail marketing, cold call prospecting, email blasting, internet leads, magazine or print advertising, and the combination of direct mail marketing along with select follow up calls. For this article, the profit potential, ROI, will be honestly evaluated with facts on direct mail marketing and on cold call prospecting.

Determining Return on Investment

Your intentions are multi-purpose. As a result, two basic objectives are required. First is figuring out just how much in physical dollars and time dollars it is costing you to obtain a producing broker. The other factor is determining what is termed your agents Lifetime Customer Value. In the insurance field, that is calculated by how much money a broker will provide you over a three-year period. You project this, by analyzing your present writing brokers, and average their past net value to you.

The ROI is usually a single digit number, like 3, 5, 7. or maybe even an outstanding ten. Look at this in easier to understand $1,000.00 terms. If your ROI is 4, it means if you spent $3,000 on a certain marketing recruiting plan, you could by past history, expect a return of a return of $12,000 over the next 3 years. In a similar manner if you learned how to increase your ROI to 5, you would have the same $3,000 investment, but now the return would rise to $15,000. The bulk of your competitors have no wordly idea of ROI planning.

A factual examination on agent cold calling prospecting

If you are using an unrefined list of agents to phone call, 30% are overly captive, like the heavily yellow page advertisers representing Allstate, Farm Bureau, and numerous like insurers. In addition, of the remaining 20% are too inexperienced, plus add another 5% to 10% as being life licensed stockbrokers, telemarketers, and home office personnel. This leaves 40 to 45% of which half might have the slightest interest in your particular product.

A hard to swallow fact is the 55% of residential phone numbers are on the do not call list, similarly at least 60% of the phone numbers you might obtain are home phones. A phone campaign killer is also the fact that it is illegal to cold call agents on their cell phone numbers. Some of the highest quality agents do not use an office number, and reserve a cell phone number exclusively for their insurance business matters.

Use this optimistic example. You envision your income at $100,000, which equates to $40.00 per hour. As the initial investment is cheap, you elect to do call calling prospecting to recruit agents. Figure that because of no answers and wrong numbers you will reach 10 agents per hour. As explained above, only two of the 10 could have a remote interest or meet your qualifications. Assume that you have 5 days, 5 hours each devoted to phone soliciting. Using these figures, you complete 250 phone calls. Of the 50 with a remote interest, say a high figure of 2 actually sign a contract. One of these produces an average amount of agency business, the other broker none.

The results: Your total time expenditure of 25 hours at $40 an hour, plus 2 hours contracting time equals $1,080.00. Add $20 for list and phone call costs. The total expense is $1,100. Your normal writing producer over the next 3 years is worth say $3,300. To get your ROI you divide your average Lifetime Broker Value by expenses. The ROI equals 3. That means that for every $1,000 you spend, you will get $3,000 back. When you consider that this is spread over 3 years, your first year gain is minimal. That is why random broker cold call prospecting puts many marketers without time allowance for their buildup of brokers to mature. Consequently, you have a financially stressed situation.

Examination of intelligent direct mail marketing facts

In this example, an insurance marketer who purchased a list of semi-independent agents and independent brokers of different products are used. 5,000 identified brokers are mailed a well-written oversized postcard. These cost of the list, printing, printing services, and standard mail postage equals $4,000. Now .8% to 1% is a normal business-to-business response, where a consumer response is often double. Using the conservative .8% return ratio means that 40 agents respond back to the mailed message.

Of these 40 responders, 11 are quickly weeded out as not qualified or interested. Of the remaining 29, a very moderate number of 14 sign a contract. Again 50% or 7 of these turn out to be average agency writers. $4,000 has already been spent, so add to this, 20 hours of phone scheduling meaning $800 of time value used. Therefore, you have a grand total of $4,800 spent. Your writing producers at the same $3,300 worth each would total $23,100.

To get the ROI, divide the $4,800 spent into the $23,100 three-year broker value. The figure is 4.812, an improvement than the other example. Every $1,000 invested means $4,812 returned. This added amount very often provides recruiting capital to invest in an ongoing direct mail campaign. Please think about your dignity, inflicting a phone scar and numb fingers is easy to prevent. Keep in mind the producer financial values used here were below average.

Increasing your ROI ratio consists of two items. Increasing the percentage of positive relies to your offering.. This can be solved with the quality of the list used for prospecting, an overall very minor expense. The second is based on your skills of providing agents with more materials and communication so more than 50% will actually write cases. In addition, work on ways to get producers writing additional products in your portfolio.

What Every Business Owner Needs To Know – One of The Seven Musts of Marketing – Direct Mail

In my role as executive coach and business consultant, I come across many opportunities to assess and evaluate technology based solutions at the enterprise, department and individual level. While technology implementations can represent challenges and occasional risks at deployment, to ignore the current patterns and solutions to improving interest in your company solutions as a product or service, could be very costly to your top line performance.There are Seven Musts of Marketing that benefit from the integration of current technology based solutions. One of them is Direct Mail. I recently had the opportunity to speak with Keith Goodman, Corporate VP Sales for Modern Postcard, with Corporate offices in Carlsbad, and a Chamber member, who shared his perspectives on this very important strategic component of business development.Miguel:”Keith, what is this thing called direct marketing and why should we care? Keith Goodman:”Well, at the end of the day, there are really two basic categories.I’m sure we could break that down into about twenty, but two basic categories of advertising. One of those is brand awareness, where you’re really trying to get your name out there. You want to establish your brand and let people know that you’re there, and really communicate the values of your business and everything else. The other side is what we call direct marketing, where it’s really driving to get a response. You’re trying to drive the person to actually create a transaction.Especially now, in the economic situation that we’re dealing with, direct marketing is becoming more and more appropriate and accepted as the norm because at the end of the day, businesses are much more interested in actually getting people in the door and driving revenues than they are in getting their name out. Many times, it’s really hard to monetize a brand campaign, where it’s very easy to measure and monetize a direct campaign. So, I think that that’s probably the simplest way to put it. I’m sure I don’t have a couple of hours to expand on that.Miguel:”Keith, how can business owners better appreciate the value that Modern Postcard brings to them in terms of the results of their direct mail/marketing campaigns?Keith:”We go through a series of questions to get a really good idea on who are the right prospects, who are their best customers, what are they buying, what are their buying habits, how do they actually generate a transaction, are they buying on the Web, are they coming into the store, are they talking to a salesperson, is it a complex product that needs to have a salesperson talk to a customer before they make the purchase decision? So, we take all these things into effect.Then we take that information and we say, “Okay, here is what we consider your best target market.” And it might be a couple of them. The best targets might be families with kids as well as wealthy singles, so we recommend testing. We recommend testing whenever possible. It is the best way to develop the best marketing piece over time. You can do that in direct mail and you can’t do that with a lot of other types of advertising, where you can test simultaneously.Then once we have the list put together, we’ll then work with the client on creative. Many times, the client will already have creative, at which point we’ll ask if they would mind if we review the creative, look at it, run it by our copywriters and designers, see if we can come up with any ideas that might make it a little bit more successful. If they don’t have creative, we will work with them in creating a piece, using their imagery if they have it, some of the copy that they have, information on their business, benefits, that type of thing, and get all that information put together. We have a team of great graphic designers here where we’ll put together the mail piece that is associated with the target market.We also have our own in-house list brokerage so we have access to over 75,000 different lists that are out there, so we do a pretty exhaustive search on the lists that would fit their target market the best. We also have technology that allows us to analyze and model their data so we can take a customer’s data, analyze it and profile it, give the client back a profile of what their customers look like, and then identify the people that most likely resemble their best customers. So, it allows us to really go in and fine-tune on who are the people that are most likely to respond. Using the modeling on the business-to-consumer side, we’ve been able to increase response rates anywhere between 200 and 400 percent by using this technology, and it’s a very incremental increase in price, small incremental increase, over what normal data would cost. So, it’s been highly successful for our clients, and we’ve seen a huge increase in the number of clients that are using that technology.Miguel:Keith, you have just described the perfect example of the linking technology in terms of results, to the goals of the business owner. Your firm, Modern Postcard, brings to the table. Keith how does a business owner get in touch with you to begin to leverage the use of this technology in their business?Keith:My direct line in is 760-692-3359.

Top Five Rookie Marketing Mistakes and How to Avoid Them

Launching successful marketing campaigns takes creativity, initiative and perseverance. Although most business owners learn the best ways to market through experience and pain-staking trial and error, there are several common mistakes made by new owners that can easily be avoided with a little foresight and preparation. We highlight these “rookie mistakes” below to help new owners generate effective campaigns that bring in higher returns on investment the first time and every time.Rookie Mistake #1: Assuming that you are your own target market.When it comes to marketing your most effective consumer audience, many new business owners make the common mistake of believing they are representative of the target market. For example, they think, “I am upscale, and I read Val-Pak, therefore other women like me read it, and in my market that is the best way to promote.” or, “This ad does not appeal to me, therefore it would not appeal to any woman who is in my demographic group.’”This thinking is wrong and you should avoid advertising based solely on your personal beliefs or preferences. While tailoring your approach to a targeted market is the most effective way of getting your message to the right people, you do not want to narrow your audience too much, or alienate consumers all together. Instead, consider testing different types of ad campaigns, using focus groups and taking note of the marketing aims of other successful companies that share your industry.Rookie Mistake #2: Giving up on a marketing plan too soon.Do not assume your direct mail campaign is a failure because your 5,000 piece mailing only yielded 10 inquiries. Creating brand awareness takes time. Re-evaluate your mailing list and the criteria used when selecting the recipients. If you know that the parameters used were on point, trust your instinct. Be patient and keep at it. Through persistence, you will build your membership base.It is common for new business owners to blame the marketing when they do not sell products or services effectively. A seasoned pro knows to keep close track of closing percentages so that he/she knows where their team is lacking. Manage every aspect of your business and keep up with any feedback you are getting. By tracking what your clients are doing, as well as how you are being received, you can pinpoint which marketing efforts are working the best.Rookie Mistake #3: “Saving” money by ordering inexpensive print materials.Ordering printed marketing materials from an online print wholesaler, a local printer, or producing your own on a home inkjet printer will nearly always translate to diminished quality. Many times, a prospective client will make a decision about your services or products based upon a single postcard, business card, or flyer they receive. Perception is reality when it comes to print quality. Keeping your print material and stationary at high quality presents a polished, professional image to the world and is well worth the money invested.Rookie Mistake #4: Not keeping consistent with your universal image or brand.Specific companies serve a specific market niche. For example, elements for women is an upscale, boutique fitness spa promoting a balanced approach to a healthy lifestyle: body, beauty, and mind. Every single marketing directive is consistent with this philosophy. The company does not aim their message at men or those interested in YMCA-type fitness facilities, because that is not consistent with the brand. While first-time business owners will want to target EVERYONE in hopes of getting more hits, they will get more results from directing their efforts towards people their brand is targeted at. It’s quality over quantity. Bottom line: stick to your niche and you will be very successful.Rookie Mistake #5: Not taking advantage of off-premise marketing opportunities.Some of the best, most cost-effective marketing can be accomplished through community events and sponsorships, and there are numerous ways to get involved while promoting your business. A community event can take many forms, including a marathon, local festival or charity ball. Although the cost varies depending on the type of event you are involved in, it is usually less costly and more personal than advertising and is a great grass-roots approach to marketing.You can increase your impact at events by setting up kiosks and trade booths. Be sure to leverage the inclusion of your logo on all printed marketing materials, including event programs, t-shirts and merchandise. The cost is small and you’ll make a good return on your investment provided your team assertively seeks and captures leads at the event. Make sure you and your team are properly attired in professional or branded gear and are excited about getting out into the community. Energy is contagious!