Many agents report that client referrals build their business. They are correct in that new policies for customers referred by existing clientele are much easier to obtain than prospecting and cold calling. But in our experience, agents don’t always realize exactly how they get the referral in the first place.
Some agents worry why they aren’t growing their agencies. They are very busy, doing paperwork, answering service calls, speaking to underwriters about accounts, but what they aren’t doing is the key activity to growth. While they are spending the majority of time sitting in their offices waiting for the phone to ring, they are not actively seeking new prospects, customers and referrals to grow their business.
The only way we know of to grow your client base is to write more new clients than you lose every year. And the only way of doing that is by having a consistent marketing campaign that keeps you out of the office, visiting clients and new prospects while your staff takes care of the routine service issues. In other words, in order to make your agency profitable and valuable, you must grow your client base annually.
Now that you or your agents have freed up time, it is time to get out of the office and talk with people. Begin with you own customers. Long time readers of the PIPELINE have undoubtedly come across our surefire method of generating referrals. For new readers, link to our article Active Referral Program to learn how three questions will yield referrals from your customers.
Filling your prospect pipeline consists of more than referrals though. To fill the gap, you’ll want an active marketing program. Frequently, we come across misconceptions in the definition of a marketing program. Marketing is the tool to contact prospects, but marketing will not sell a policy. Marketing uses various forms of advertising, but advertising is not the same as marketing because advertising is a one-way communication while marketing provides a conduit to personal communication. And most importantly, a marketing campaign is a multiple contact, long term, strategic method of communication. Marketing is not a one shot deal.
Using the various methods of communication in your marketing program adds variety to the delivery and also ensures that every prospect has a number of different methods to receive the message about your agency and your products. You may use post cards, email, alerts, newsletters, billboards, flyers, radio and television, newspaper ads and even the good old phone book. Using any single form of communication (ie. the Phone Book) is not a marketing campaign, but rather just a piece of the bigger plan that will yield you an opportunity to speak with a prospect.
Marketing only works as an entry to meeting and visiting the prospects. If you market to your own customers, you can generate the referrals that you need in order to get out to speak to folks you don’t currently insure. Likewise, marketing to people and businesses that you don’t currently insure will provide another opportunity to speak to new prospects.
Many marketing programs are considered a failure when, in fact, the marketing has worked well, but the personal follow-up has not occurred. If you don’t personally visit a human being as a result of a marketing campaign, you’ve flushed another dollar down the drain. Your clients and prospects are already inundated in messages from advertising and marketing. They hang up the phone on every recorded and throw away most junk mail. A personal follow-up is the “missing link” to ensuring a successful marketing campaign. And it is that personal follow-up that gives your efficiently budgeted marketing program a leg up on the billion dollar marketing campaigns by the direct writers.
Most of us say that we know where to go if we need a product or service. We don’t need to be bombarded with solicitations – insurance being one of the principal culprits.
Another reason that traditional advertising doesn’t work is because the big houses and the direct writers can do it better, at higher quality, more consistently and more creatively than we can do it. Even considering your (relatively) small market as a portion of the major carriers’ two and three BILLION dollar marketing budgets, they still pour tens of thousands of dollars into familiarizing your patrons with the gecko, Flo and other such gimmicks. How does that compare to your $1,000 advertising campaign that sent a brochure, letter or postcard to several hundred prospects one time? You can try to hold back the tide with your pail and shovel, but I prefer to use the strong tide to surf its crest and take the lead using their tactics against them.
Budgeting for your marketing each year determines how many contacts you can make in through which media. A single hit marketing effort, let’s say direct marketing postcards, may only cost a few hundred to a few thousand dollars. And that may be all you have to spend for marketing, yielding little return and determining the effort to be a waste of money. However, some agencies choose to use their Sales and Promotion dollars, which is roughly 2%-3% of annual revenue, and allocate that toward marketing. That allows your money to be spent where you are also spending your time to create and build relationships with both your current clients and with their referrals and new prospects.
Over the years, we have introduced several concepts for marketing because different agencies in different environments will use various methods to reach their prospects. You’ve read about Drip Marketing instead of mass mailing (link here to see Pipeline, April, 2005), Concentric Marketing (link here to see Pipeline, January, 2009) and a Radiating Marketing strategy (link here to see Pipeline, March, 2011). Our Asset Protection Model of relationship selling uses a 15 Step Marketing Campaign (link here to see Pipeline, September, 2009) as one of the key components to a very active relationship building process by the agency’s Relationship Managers.
We strongly urge you to budget money each year for marketing and devote that money to tools that will cause your clients to refer others to you. We also strongly recommend that you to visit both clients and prospects on a frequent basis in order to show them your value as a personal coach and counselor for their insurance needs. If you would like to discuss your current marketing program and future marketing goals, or if you would like to create marketing strategies for your agency, please call us at (800) 779-2430.