Insurance Marketing Success

As you know, the insurance business is very competitive.  There are many agents out there selling the same types of products, so how do you set yourself and your agency apart from the competition? 

Availability is a key factor in a consumer’s mind.  They want to be able to talk to someone about their policies on their schedule.  Gone are the days when insurance was a 9:00 to 5:00 job.  One of the biggest reasons that agents gain new business is because the client is frustrated with their old agent’s lack of availability.  Nothing burns a customer more than calling a place of business and having to leave a message.  If you make your clients leave messages, you better call them back! 

Here’s an idea to promote your availability and to keep your name in front of them. 

When writing new business, I’m sure most of you give the new customer a business card that has all of your contact information on it.  I want you to take it a step further.  Circle the phone number then tell clients to take out their cell phone.  Tell them, “I want you to program our office phone number into your cell phone in case you ever need it.  If you happen to get into an accident, or need us for anything, you won’t have to search around for our number.  We’re just a phone call away.”

This does a couple of things.  It promotes your availability and your sincere desire to help them when they need it, but it also causes them to think about your office more than they normally would.  Think about it, every time they look through their contact list in their phone they will see your name and think about how wonderful they were treated in that first appointment.  Why would they ever want to go to another agent?  Who else is going to take care of them like that?

You can’t turn on a television or pick up a newspaper these days without seeing something about the housing crisis, rising gas prices, or the debate about whether our economy is in a recession or not.  One thing is for sure.  We’re in some pretty tough times right now.  Everyday people are being squeezed for every nickel in their pocket, and big businesses are announcing new rounds of layoffs almost every day.  How has all of this affected your business, and what can you do about it?

 It’s times like these when companies’ sales are slowing that they begin to look at cost cutting measures.  It might be time for you to do the same.  When things are going well and sales are up, we tend to look the other way when costs begin to rise because we figure we’ll make it up with the increased revenue.  Now that sales are not coming in as fast and things have slowed down in the office, you may want to look at the money going out the door. 

Involve your team in the cost cutting to get them on board.  Explain to them that this is necessary to maintain profitability.  Without profit, there usually isn’t much room to provide raises, so this may help them see the importance of managing expenses.  Get their input.  Ask them, “What can we do without, or what areas can we look at to cut expenses?”  Ask each member of your team to provide you with three ways to save money in the office.  Don’t limit them to certain areas of the business or certain expenses.  Let them come up with the ideas on their own.  You might be surprised with what they come up with! 

 In your analysis, you should look at all areas where money is flowing out of the business.  This means payroll, office supplies, advertising, utilities, etc.  Can you get the same product or service cheaper somewhere else?  If so, maybe it’s worth switching to save money.  Are you getting the most bang for your buck out of your current marketing plan?  Are there some things that are working better than others?  Has that newspaper ad run it’s course?  Maybe it’s time to give radio a try.  Can you find replacement printer cartridges cheaper somewhere else?  It’s time to look at all expenses no matter how small. 

What do you do after the expenses are cut?  Just put the money in your pocket?  This is the part that separates the great agents from the good ones.  Great agents take some of the cost savings and reinvest it in their business.  Good agents take cost savings and put it in their pocket.  You absolutely need to reinvest a portion of the cost savings.  Reinvesting some of the money back into the business will fuel future growth opportunities while pocketing the money creates a mindset where all future investments in the business are seen simply as expenses.  Expenses can only be cut so far.  Eventually, you wind up sitting in the dark trying to lower your electricity bill because you can’t cut out any other expenses.  Reinvesting a portion of the cost savings will benefit you in the long run because you will continually be looking for ways to fund future growth. 

According to the FTC’s website, there are over 145 million phone numbers registered to the Do Not Call Registry.  If your insurance agency makes use of cold calls to find prospects you have probably found it harder and harder to reach people who want to hear your message of lower rates, better service, better coverage, etc.  Most people simply don’t want to receive your message over the phone.  It doesn’t mean that they don’t want your products and services, they just don’t want to be bothered by you on the phone unless they give you permission to call them. 

So how do we reach the people who don’t want to be reached?

Direct mail can be a powerful way to get your message in front of these prospects.  I know many of you think that direct mail doesn’t work and it’s a waste of your time and money.  It can be if your message isn’t targeted to the right people.  You don’t have the deep pockets like the Progressive’s and Geico’s of the world to send several mass mailings to your entire territory.  Even if you did, would it be very effective?  I believe you need to be more targeted and strategic in your approach to direct mail.

Two common mistakes in direct mail marketing  

Not sending enough mail. 

This is one of the most common mistakes that I see agents make.  Most people simply do not respond after the first mailing.  This is where many agents give up because they don’t have a clear strategy.  They try a mail campaign where they may send out a few hundred pieces of mail that cost them a few hundred dollars, and then sit back and wait for the phone to ring.  When it doesn’t ring, they give up and say that direct mail is a waste of money.  The key to direct mail is repetition.  You have to mail to the same list several times before you really see any type of return from it.  Now you may have received some calls, ran some quotes, you may have even written some business from it.  Congratulations if that happened, but think about how busy people are these days.  They work all day, come home, eat dinner, run kids to after school activities, etc.  Even if they get your mail piece and want to call you, it is probably pretty low on the priority list.  If you only send them one direct mail piece, they may never get around to calling you.  You should be sending multiple pieces to these households throughout the year.  Maybe they weren’t in the market when you sent the first piece, but by the time they receive the third or fourth mailing, they may have had a bad claim experience, a rate increase, bad customer service, or a number of experiences that might prompt them to shop their insurance.  You have to catch them when they’re in the market, and unfortunately this is not usually the time when your first mailing goes out.  

Using the “Shotgun Approach” to direct mail.

The second mistake that I sometimes see is that agents will mail to people too far outside of their market area.  They take more of a “shotgun approach” to direct mail.  Rather than selecting a more qualified list, or one with a tighter radius around their office, they try to hit as many people as they can.  This can be a very costly mistake in our business because of the amount of competition.  This can be more of a problem for agents in larger cities.  If you are mailing to households within a certain radius of your office, think about how many insurance offices the prospect would have to pass to get to your office.  Pay special attention to the amount of competition within your own company.  The last thing you want to have happen is that you spend all the time, effort, and money to acquire the business only to see it transfer to another agent in six months because they are closer to the client’s home or office.

One thing you have to consider when planning any type of direct mail campaign is what your break-even point is.  How many policies do you have to write for your mailing to be profitable?  When calculating a break-even, remember to count renewals.  Hopefully the business will stay on your books for a long time allowing you to earn several renewal commissions over the life of the policy.  Here’s an example to show that it doesn’t take very many new households to make direct mail profitable. 

Let’s say you send out 500 mail pieces at a cost of $1 per mailing for a total mail cost of $500. (we’ll ignore any labor costs at this point) Typical direct mail response rates are in the 1% to 2% range meaning you may write 5 new households from the mailing.  We’re going to assume that you are selling them Auto insurance and your commission is about $50 on each policy for a total return of $250.  You’ve recouped half of your cost already and that doesn’t take into account any renewal commisions or additional commissions earned from multi-lining these new households.  With conservative renewal commissions of 5%, the business would only need to stay on the books for another two years to break-even.  Keep it longer, and it is pure profit!  Direct mail has a long tail on it, but if you are willing to stick with a consistent program, you can make money with it.  It’s not like people are rushing to take their names off of the Do Not Call lists, so direct mail should be a strategy that you consider.  Feel free to comment on this post if you have had success with direct mail.  We would also like to hear from those of you who have given up on this strategy and the reasons why.   

Your local marketing is one way that you can set yourself apart from your competition.  But are you taking into account all of your competition?  Your true competition is not only the agents at the other companies, but it also includes all of the other agents who represent your same company.  Captive agents know what I’m talking about.  Sometimes this competition can be more fierce than the other companies. 

So what are you doing in your marketing to separate yourself from the other insurance agents representing your company? 

Let’s look at an example of what I’m talking about. 

A new family relocates to your city because of a job transfer.  They are buying a new house and need to find a new insurance agent.  How do they choose?  For simplicity, let’s assume that they are not changing companies.  It is a mid-size city, so there are a half dozen agents to choose from.  What are you doing to get your name to move to the top of the list?  What will make them choose your agency over the other 5 in the city?  There are a number of things, but maybe they drove by a billboard with your name and picture on it when they came house shopping.  You could place a separate ad in the yellow pages.  Although these days, the yellow pages are all but dead.  What is your online marketing strategy?  Do you even have one?  Partner with local realtors to get your name in front of the prospect while they are buying the home.  You want to look for things that will get your name in their head, so that when they look online or in the phone book for an agent from your company, your name is the one that pops out at them.

Companies with captive agents usually have the problem that not all of their agents are fully engaged in marketing and growing their business.  This is a huge advantage for the agents who are willing to spend some money and get creative with their marketing, because almost anything you do will be more than the unengaged agents are willing to do.

Have any great ideas that you are using to set your insurance agency apart from the competition?  Send them to us today!

Hiring a new team member is one of the toughest things a business owner has to do.  Insurance agents have an even tougher job because they need both salespeople and service people.  You need that mix of someone who can bring in new business and pivot to other products while customers are in front of them, and the person that can hold a client’s hand through a bad claim situation and make sure the business stays on the books.  It is very difficult to find someone who can do both things well.  Some salespeople are not detail oriented enough or do not see some small service items as a high priority, while some service minded team members are not comfortable asking an auto and home customer where they have their life insurance at. 

So how do you figure out what potential team members will be good at?  In my experience, if someone wants a job bad enough, they will say about anything to get it.  The thought of making cold calls might make them sick to their stomach, but for some reason they get into an interview and tell you that they love it.  So it appears that you have the right person, then they get in the office and the sales don’t happen.  Now you waste time training and coaching when you actually had the wrong person all along.  Here’s one idea that you can try during the interview. 

When they come in, have them sit with your best salesperson for a short time so they can observe them make several calls.  It is very important that this team member makes calls rapid fire style, one after another.  If they don’t get an answer, hang up and immediately make another call.  It is very important to set this precedent now during the interview process, because so often people who are not comfortable with sales will do anything instead of making that next call. 

Once they’ve sat with them for a short while, hand them the script and have them make a few calls.  Make sure that they actually talk to someone, not just leave messages.  Give them a taste of what will be expected.  You not only will find out whether they are cut out to make these calls, you will find out how they perform under pressure.  If they are not licensed, just have them collect some basic information then hand it off to a licensed team member to quote.  Once the calls are completed, have an honest conversation with the interviewee.  Are they up for the challenge, or did they absolutely hate it?  You might have to start with a larger interview pool, but in the end it will be worth it, because you will have a better chance of finding the right team member.