Every insurance agent and agency wants to make the most of their marketing dollars. One of the things that will help you do that is tracking your return on investment, or ROI.
The basic formula is pretty simple: figure out how much money came in as a result of a particular marketing campaign, subtract the amount you spent on it, and voila! That’s the general idea behind marketing ROI.
Of course, ROI can be a bit more complicated because, in many cases, that initial calculation doesn’t account for repeat business from the same customer or referrals that you get from them down the road, but we’ll address that later. The main point here is that paying attention to your ROI is the first step to optimizing your ROI—a smart business practice that can help you save money while building your book.
Step 1: Choose the Right Audience(s)
You’re more likely to return a text from your mom, child or friend than a complete stranger, right? Marketing to your current customers will often yield a higher ROI because of the familiarity factor. They already have a business relationship with you, so they’ll be more receptive to hearing what you have to say. This is a great first audience for your marketing efforts.
That said, you need to be strategic with the number of times you get in touch with this audience – you don’t want to pester them, and your business will grow much faster if you continue adding new customers. To attract new clients, it may help to define a particular insurance product you want to sell and then decide who is most likely to need it. Homeowners insurance? Choose a zip code with a high concentration of nice homes. Life insurance? Maybe target an audience of 30- to 45-year-olds—an age group that is more likely to have dependent children at home and a desire to protect them in the event that one of the household’s wage-earners dies.
Step 2: Experiment with Marketing Methods
There are many ways you can get your name out to potential customers: traditional media advertising, social media advertising, sponsorships, direct mail, billboards, building signage, hiring a small plane to pull a sign over a stadium…you get the idea.
It can be a little bit overwhelming to know where to begin. You might start by creating three relatively straightforward campaigns: a social media ad, a customized email to current customers, and a direct mail campaign targeted to a geographic area. For the cleanest ROI results, execute each campaign one at a time, or focus each on a different deal or insurance product. Using a unique discount code, phone number, or email to contact can help you track which campaign a customer is in.
Try each method to see which brings the best results. This will give you direction for your marketing moving forward.
Step 3: Track, Calculate and Measure
You won’t be able to optimize your marketing ROI unless you track your efforts. Create a spreadsheet that lists each marketing campaign and the target audience, then track any relevant statistics. This could include: number of policies written as a result, the amount earned in commission, number of new clients, demographic information about those new clients, changes in web traffic, changes in a particular policy type sold, forms filled etc.
Over time, you will see trends emerge. It could be that you find direct mail works better with older homeowners and that social media ads reach life-insurance shoppers, or it could be the exact opposite. Go into it with an open mind and let the data tell the story.
Be sure to include a category for additional lines of insurance sold to an existing customer or referrals that resulted from a specific marketing effort. This will give you a more complete picture of your marketing ROI, and the data you collect can help you determine how often to reach out to prospect versus current customers.
Over time, you will see patterns that will help you hone your marketing efforts to make the most of your budget. Tracking your marketing ROI in this way will help you make better business decisions, which in turn leads to a stronger business.
Hometown Quotes supports insurance agents and agencies with fresh leads generated in real time. Give us a call at 800-820-2981 to learn more about our services and how we can help you build your book with qualified prospects.