Creating and Implementing Marketing Plans

What is a marketing plan?

A program to get prospects to know you and to educate them regarding your products

A tool to generate sales

A written program detailing the costs, benefits, resources needed and procedures needed to evolve specific sales expectations.

A part of a Strategic and Tactical Plan to sponsor agency growth

What is a marketing plan – NOT!

Yellow page advertising

A newsletter

A direct mail piece

A telemarketing program

Any undocumented, un-budgeted program with hopes instead of realistic expectations

Most insurance agents sell insurance as follows: A customer tells the agent of a friend of his who has an insurance problem. The agent immediately becomes a broker and tries to solve the prospects problem by analyzing his risks and designing an insurance program for him, whether in the agent’s standard markets or in the E&S marketplace. The agent calls underwriters and seeks to put together an insurance program for the prospect. For the most part, the agent is asking the underwriters to make exceptions to fit the client’s needs.

For two hundred years, brokers have been operating as agents for the customers to place insurance with underwriters. There is nothing wrong with creative risk management. But when the brokers became licensed agents of the companies, instead of brokers for the customers, the producers supposedly took on a different role.

Agents for insurance companies represent the company, not the client. Certainly, the goal is still to fill the client’s need for insurance coverage. But the agent is responsible for doing so within the guidelines and products available from the companies represented.

Most agents of direct writing carriers understand this relationship very well. They MUST place all coverage with their carrier or risk disciplinary action. For this reason, they spend much time qualifying the risk and will decline to pursue those categories of risk that fall outside of the company guidelines. Many independent agents are the recipient of referrals from friends in the direct writing arena who can not pursue specific clients.

Independent agents have always crossed the line between being an agent of their various carriers and being a broker concerned primarily with the needs of the clients. It is the “client comes first” attitude that causes independent agents to pursue difficult and non-standard lines and makes them challenge underwriters to find ways to write coverage that is outside of the companies’ norms. Independent agents also spend substantial amounts of time working with the E&S marketplace placing business at reduced commissions to satisfy clients’ needs.

There is no value judgment intended regarding the agents’ placement of customer or of company as its first priority. The attitude seems to change depending on who the agent is addressing. We claim that our first concern is writing insurance for our customers. Those sales are what pays our expenses and, for that reason, the customer is number one. However, if the customers that we insure by asking for favors and overlooking historical or potential problems cause severe loss ratios or strain our relationships with our companies, then we understand that our carriers are our benefactors and the only way we can stay in business. Without our carriers, the customers would soon leave us for other agents. When our efforts on behalf of our clients result in the placement of a substantial amount of the agency’s volume in the E&S market, we probably aren’t growing well in our standard companies. The loss of a standard company impacts us much more severely than the loss of a client.

How does this tie into marketing plans?

If we design our marketing plans properly, they will not only sponsor growth for the agency, but they will also reflect our sponsorship of growth for our carriers. Many agents can attest to the fact that agency relationships with a company rise in direct relationship to the number of good submissions made consistently by the agency. Developing a marketing plan focused on the strengths of the carrier will enhance relationships as well as generate sales if you follow a few rules.

Marketing planning is divided into two distinct segments, one conceptual and one mechanical. How, to whom, what and why we evolve the marketing plan is the conceptual part of the planning process. The steps of the plan, itself, is the mechanical part of planning. Too many agents have advanced to the mechanical level of planning without properly detailing the conceptual level. They wonder why the well-advertised marketing methods don’t seem to work for them? The reason is that they are using the tools to the wrong market, with the wrong products, and for the wrong carriers.


1. What do your carriers do well?

This question does not necessarily correlate to the company’s desired markets or lines of business. The stock companies seem to favor being generalists and would like to spread their risks by developing premiums in many types of exposures simultaneously. However, the companies sometimes have poor filings, poor rating structures or underwriters who are not skilled in lines of business that the company guidelines indicate are favorable. As a result, some products on the company “hit list” can not be successfully placed with the carrier. The appropriate question to ask is what lines of business has the company been successful writing? Some companies have advanced sufficiently to identify hit ratios by territory. In other cases, the underwriters, themselves, can tell you in what lines their companies seem to be having the most success.

2. What do you do well as an agency?

As much as we would like to be agents with excellent knowledge in all lines of insurance, it just isn’t so. If your carrier is excellent in farm products and you live and work in Manhattan, that strength simply doesn’t matter to you. Every agent has developed natural niches. These are areas of competence for the agents and/or staff that makes it more likely that they can write certain lines of business if given the opportunity. Whether the niche is personal lines, ethnically oriented, industry oriented, or product oriented, this is an important ingredient in a successful marketing plan.

3. What are the demographics of your marketplace?

Many people have heard of demographics, but don’t really understand the significance of the concept. The demographics of a marketplace is simply its statistical census. Wouldn’t it be nice to know how many types of businesses, how many of each and who are their owners within fifteen miles of your office? That information exists and today’s technology can put it at your fingertips. This is a demographic study of an specific area. Demographic studies can be acquired from market research firms. However, they are no longer difficult to generate yourself. List brokers, Chambers of Commerce, worker compensation programs and associations can provide substantial information regarding the demographics of your area.

Once you understand the answers to these three questions, you are ready to create the marketing plan in concept to answer the following question: WHAT CAN WE SELL IN WHICH WE HAVE EXPERTISE FOR WHICH WE HAVE BOTH SUFFICIENT PROSPECTS AND CARRIER PRODUCTS THAT ARE PROVEN TO BE SUCCESSFUL?

Please notice how different this concept is from the standard company marketing approach which touts the product that the carrier is most interested in building a book of business. That traditional concept of product-driven marketing disregards the demographics of the area and the skills and talents of the producer. A second marketing approach has been a market-driven plan. This concept identifies the predominance of the marketplace and sells to the market. The assumption made by the agent is that they will be able to use a number of carriers in which to place the business generated. This causes multiple marketing of submissions and no guarantee that any of the agent’s carriers will be able to wrest the account away from the incumbent. The concept-driven marketing, described above, synergizes the company’s strengths with the agent’s strengths and the market availability. It argues that you will have your greatest sales success selling to a market niche that is sufficiently numerous in your marketing territory to be worth the cost of the program, with a product in which you are skilled and knowledgeable, and with a carrier who has been successful accepting this type of account.

Once the concept of the marketing plan has been set, you are prepared to establish an Objective, Methods and Cost of the plan.


The target for a marketing plan should not be a ‘gut feel’ for how successful a plan should be. The objective should be rooted in the demographics and value of the marketing plan. The demographics will tell you the size of your prospect universe. The value potential of the plan depends on the average premiums and commissions of the product that you will sell with the carrier in which you will place the customers written. If the company already has a “hit rate” for that product (i.e. a 70% success rate for HVAC contractors), then you may assume that it will have a similar success rate for the HVAC contractors that you bring to it’s door. If their average HVAC contractor is $15,000 of premium, yours will be, too (if you share the same demographic area). While the company is interested in premium, the agent can easily determine the commission value of the average sale. Now the question arises, “How many prospects can you bring to the submission state with the carrier?” This requires you to integrate the marketing methods with the objective.


The methods used in your marketing plan depends on the number of prospects, the average value of the sale, the projected hit rate, a projected proposal rate and the amount of time the agency is willing to expend to pursue this market.

Obviously, you would not create a five color brochure and multi-media proposal for a prospect base of 10 with a potential value (commission) of $500 for each sale. Nor would you commit to personal visits of 1000 florists who have a potential sale value of $75 each. Finally, if you are the only producer and already spend 60 hours/week in the other various duties in the agency, a marketing plan requiring fifteen hours/week during nominal business hours is probably doomed to failure. You must seek a balance of these issues BEFORE deciding on the best methods available to you.

We recently encountered an advertisement titled “Lazy Agent’s Way to Riches” touting a three inch ad that will bring you $400,000 in new premiums without ever making another cold call. Any agent who chooses to respond to this ad will receive exactly what he deserves for his money – a get-rich-quick scheme — either an out-right fraud or a glitzy formula grounded in historically tried and true sales principals. After 30 years of seeing both successful and failed sales programs, we can comfortably assure you of the “True North” principal of sales. In order to sell more insurance, you must present yourself and your product and price to a substantial number people who you do not currently insure. Everything beyond this principal is commentary. Your marketing program should be focused on familiarizing the right people with who you are and what you sell. The trick is identifying the right people, using a method proper for the market to familiarize them with you and the product and creating opportunities to present the prospects with a proposal for a sale.

Some of the methods available and commonly used are: direct mail, cold calls, drop-ins, newsletters, media advertising (radio/TV/newspapers/magazines), yellow pages, pro-active referrals (from similar businesses), telemarketing and target marketing, and presentations in group meetings. We have found that the predominance of marketing failures arise from the use of a single marketing method in a program. Conversely, the more creative and multi-dimensional the program, the higher the degree of success encountered. We have found that marketing programs that are established and never monitored and changed tend to perform less successfully than those fine-tuned to enhance the program. Finally, we found that short marketing efforts have less long-term success than multi-year programs. The reasons for the success of long programs are apparent. If the goal of a marketing program is the familiarization of a prospect group with a new agent and new products with a new carrier, the more often they hear and see the message, the more likely they are to be comfortable with it. Repetition breeds familiarity and, far from contempt — in a marketing sense — familiarity breeds sales.

Our most successful marketing programs combined company product brochures, agency image brochures, target market specific risk factors, newsletters, and phone calls in a three year, 15 step marketing program. The methods and tools were all pre-determined and timed to provide five contacts each year for three years to every prospect. By the end of the third year, a survey reflected that the prospect base was certainly aware of the agency and the company and product.


More agents budget their vacations than budget their marketing plans. Advertising, direct mail, and sales calls are implemented in desperation to create some sort of sales activity. However, the one thing worse than a failed marketing plan is one that succeeds but costs several times more than it generates in sales. No one can afford to wait three or four years before seeing a profit from sales (many accounts simply don’t stay that long). Why is a costly sales effort with minimal results worse than a failed effort? In a failed effort, the agent will stop spending money when he realizes that no sales are being made. In a minimally successful effort, the agent is tempted to continue in the hope that more sales will incur. If the costing was not considered, each sale could actually cost the agency money.

Lay out the entire marketing plan prior to establishing the budget for it. The sky is the limit at this stage of the plan because you will not implement any segments that are outrageously expensive or would throw the program into a loss scenario. Next to each segment of the plan estimate the segment’s cost. Many carriers will be happy to support an agency with advertising pieces or money if the program is focused on that carrier’s favored products. Don’t forget to cost sales call time and rating time within your office. A typical costing scenario for a three year 15 step marketing plan to a 600 prospect base could look like this:

Agency Brochures for four mailings $2,500

Agency/Product-Specific brochures for 3 mailings $2,000

Agency Newsletters 2 mailings $1,200

Phone time – producers – 900 calls $3,900

Sales Calls – producers – 1.5 hrs/ea – 300 $11,719

Prep and Quote time – 1.5 hrs/ea – 150 $2,900

Proposal Time – producers – 1 hr/ea – 150 $5,900

Postage and material costs 5400 pieces $2,800

Total Cost $28,619

At this point you can determine that if the marketing program is carried out according to this plan, you will need to generate $28,619 over the period of the program (3 years) in order to break even. Break-even marketing is perfectly acceptable in the agency business because the majority of the $28,619 generated will repeat for the next several years through renewals, enriching the agency. For simplicity’s sake, if we assume a $30,000 break-even point, we can now identify the numbers needed to complete our budget and plan.

We earlier used HVAC contractors with a $15,000 average premium as an example of a target market. This will generate approximately $2,000 of income to the agency. $30,000 requires the sale of 15 HVAC contractors (at average values) during the course of the Plan. If the carrier’s products and rates has given it a 70% success rate in this line, you will need to propose 22 prospects to gain your goal. For the sake of conservatism, let’s assume proposing to 30. Obviously, every sales call doesn’t become an opportunity to propose. If we assume that 25% of the sales calls will result in a decision by the producer not to quote (prospect attitude, risk factors, outside of carrier guidelines, etc.) and another 25% will result in the prospect declining to accept a proposal (lack of chemistry, existing agent relationship, etc), we will need 60 sales calls to eventually generate 30 proposals. Remember, the proposals will be generated during the three year period of the marketing plan, not upon return from the first sales call. And those 60 sales calls will be made repetitively to breed the familiarization that will tilt the playing field in favor of you as the competing agent against the incumbent, who probably sees his client once each year. The 60 sales calls become 300 over the three year period.

60 prospects visited require substantially more prospects contacted. The two levels of pre-visit contact are media material placed before the prospect and phone calls. Media material is the printed word (in various format), sound (radio), and video or presentations to groups. The phone calls are an important ingredient in this mix. And who places those calls is the critical part of the entire process.

The term COLD CALLS must have been designed by a successful marketer who wanted to keep other salespeople from similar success. The term has a very negative connotation due to the rejection factor experienced by salespeople calling prospects to get acquainted. We have been on a search for the “GRAIL” of sales, a method of interesting customers in our products without talking to them! The ‘get rich quick’ scheme mentioned above (Lazy Agents Way to Riches) is made to generate calls from you (the customer) to the salesperson – so that he doesn’t have to call you and get rejected. But the fact remains that many of our prospects are deluged with offers for insurance products. Most of these offers are the impersonal print media that we hope they will read. The telephone call should not try to ‘sell’ anything. It should simply be a means by which we can become acquainted with the prospect ahead of the personal visit. The repetitive media segments of the marketing plan are meant to familiarize the prospect with the agency name. He is more likely to respond to a solicitation from someone he recognizes than from an unknown source. The purpose of the phone call is to connect the prospect with a human being who desires to establish a relationship with the prospect. Who is best to do this, a telemarketer whose goal is to get an appointment for someone else, or the producer, himself (or herself) who wishes to establish the relationship?

The most effective sales and marketing plans involve the producers who will make the sales call and the sale in the telephone calls introducing the agency to the customer. Those calls are to be made to the prospect base a number of times over the period of the marketing plan. From four to ten times the number of sales calls desired must be contacted as prospects by mail and phone in order to result in the desired sales call total. In our example this would require a suspect base of between 240 and 600 to generate the number of sales required to balance our budget.

$30,000 Commission ($200,000 of premium) =

15 Sales =

30 Proposals=

60 Pre-Proposal Initial Sales Calls = 300 Sales Calls to these 60 prospects during the 3 year period=

240 – 600 Suspects (leads)

If you have a lead base of this size, this level of marketing plan is justified. If not, you must alter the plan to cost no more than the projected sales to be made from the size of lead base that you have.


The final part of marketing planning is also the most difficult. The success of a marketing plan can only be measured in dollars generated at the end of the plan period. But how do you know that the plan process is successful while you are spending the money needed to sponsor the plan?

Each of the line item above (Suspects, Prospects, frequency of prospect contact, proposals, sales, average value of sale) needs to be monitored carefully during the entire duration of the plan. A marketing plan is fluid, not static. If any of the ingredients don’t appear to be working, you must be able to change that ingredient and continue the effort. That means that telephone and sales calls must be scripted and monitored. It is not unusual for a manager or co-producer to act as an assistant during a sales call with the objective of evaluating that call after the fact. Many a producer has gone into a sales slump without knowing what he was doing wrong that caused the sale to fail. An objective evaluation can often help as much as a batting coach can help a professional baseball player.

As agents of the insurance company for whom we are marketing products, it is also incumbent upon the agent to include the carrier in the planning, implementation (support) and monitoring of the marketing program. A report generated regularly through the duration of the marketing plan by the agent will tell the agency owner and the carrier whether we contacted the right number of suspects frequently enough. It will tell us whether our combination of media and telephone contact resulted in a sufficient number of sales calls. If not, it will identify the changes that were made to the program and the resultant changes to the success rates. It will tell us whether (and when in the marketing plan) the sales calls resulted in proposals. And, finally, it will tell us whether the closing rate average size of new account was maintained in accordance with the plan expectations.

There is no easy way to create and conduct a marketing plan. Every plan is different because of the mix of agent, company, product, and marketplace. But it is not magic, either. A successful marketing plan follows a distinct and disciplined pattern. To the degree that you can follow the pattern, the plan will yield results. To the degree that you monitor the program and change it if the results aren’t as successful as desired, you will achieve the desired financial results for your agency and for the company.

If you would like assistance creating, implementing and monitoring a marketing plan, please call Agency Consulting Group, Inc. at 1-800-779-2430.