ACG - Agency Consulting Group

The PIPELINE

A national monthly newsletter for agency principals dedicated to agency management topic

Neighborhood Marketing

Television, Radio, Newspapers, Billboards – all have been used by agents in the attempt to interest residents of their geographic area in purchasing their insurance products from the local agencies. These are prime examples of Shotgun Advertising, more useful to build name recognition than to actual drive prospects to the agency door.

A more selective, targeted approach that we have developed is called Rifled Marketing. The specific program for personal lines is the Neighborhood Marketing Program. Here’s how it works.

The agency selects neighborhoods that have several things in common: Age of dwellings, construction (often having just four or five house types), common protection class, relatively common market values.

An employee or contract employee drives the entire neighborhood taking pictures of each home. These pictures are printed on full sheets and framed in an attractive, but low-cost plastic or cardboard frame, bagged and hung on the homeowners’ doors. You must be careful to note each address and place the right picture on the right home.

The back of the picture is printed with a message that indicates that the agency’s representative was in the neighborhood inspecting your clients’ homes and took a picture of the resident’s home. You thought that the resident might appreciate an updated photo of their home and that your agency could insure the home for as little as $XXX based on an estimated value of $YYYYYY. Invite the homeowner to call the agency if they would be interested in a quote tailored to their specific needs and requirements (don’t forget to include the agency’s telephone number).

During the year, you will deliver specific flyers with messages that are important to the homeowner for that specific geographic area and the season of the year (i.e. windstorm, brushfire, flood exposure, hail, etc). You can design these subsequent drop-offs yourself, assign us that responsibility within the design of your marketing program or subscribe to one of several good newsletters that include these types of articles for your use. You should contact these prospects no fewer than 3 times (five is better). Some agencies provide give-away material for prospects to visit their offices (better with local offices, of course). Most will use agency-branded magnets as the prime drop-off since magnets never seem to be discarded.

If you begin a new neighborhood every week or every month (depending on the size of the community and number of desirable common neighborhoods) you can create thousands of new prospects who recognize and will use your agency name when the need for insurance arises.

This sounds like a simple, straightforward marketing program. It is. But it is not cheap. You may not spend as much as Yellow Page ads and mass media marketing programs, but it will work better to drive customer to your door. You should expect to spend an average of $1 - $2/household/contact and it works best when there are multiple neighborhoods all triggered at different times for the same marketing program. At an average of 100 homes per neighborhood and adding one neighborhood/month, the cost of the marketing program could exceed $10,000. At one neighborhood/week, the cost could be over $40,000. But at an average $700 premium per homeowners and $1,000 average annual premium per auto policy and with an average 1.5 insurance policies sold/household, it would only take 65 annual sales to pay for the monthly program and 260 annual sales to pay for the weekly program. And this implies no expenses on renewals, allowing the revenue to flow through to the bottom line.

If you think that marketing involves a single ad or a single letter (with or without follow-up), this program is not for you. It implies an investment in on-going marketing and advertising and requires both follow-through (following all four steps) and management (identifying every response from each of the steps in each neighborhood program and tracking revenues received vs. costs associated with the program). But if you are serious about growing personal lines, here’s a method that will work.

Use the link below to calculate the actual payoff requirements for your own agency’s average premiums and commissions. (link to Marketing Conversion Calculator)