As another year comes to an end, thoughts naturally turn to the future and on making a greater impact on our businesses. You have probably already started making plans for growing your insurance agency in 2017. Those plans might include strategies for increasing referrals, reducing expenditure and squeezing more productivity out of your office staff.
But what about increasing expenditure on marketing? Probably not a resolution to relish, but worth considering nonetheless. A survey by Velocify found that agencies spending 15% or more of their revenue on marketing tended to see increases in revenues of more than 20% year-over-year. On the other hand, those that spent less than 5% were likely to experience flat revenue.
So, if you plan to have a significant impact on your agency’s growth in the coming year, you’ll probably need to increase your marketing budget. But simply increasing the budget won’t necessarily have a high impact. It is important to have a solid plan for how to set and use that budget. The following guide will help you to put an effective insurance agency marketing budget together.
Measure Previous Year’s Marketing Performance
Albert Einstein said, “Learn from yesterday, live for today, hope for tomorrow.” In the context of marketing your insurance agency, that means learning from past performances to improve and grow your business in the future. You can’t begin to decide where your agency is going next year if you don’t have an accurate picture of where it has been.
The first thing you must do is carefully analyze how your marketing initiatives performed in 2016. Did you hit all your targets? Did some aspects perform better than others? Did last year’s budget meet requirements? From that data, you will be able to determine current areas of strengths and weaknesses; focus points for 2017, and areas where expenditure can be reduced.
Some of the key metrics you need to look at include previous social media reach, website conversion rates and primary referring channels, and total revenues generated. But don’t stop there. The more data you can gather about your previous marketing performance, the stronger your future initiative will be.
Organize Your Financial Information
Another important step in your 2017 budget planning is the organization of your agency’s financial information. You can’t establish a realistic marketing budget using estimates of your revenues. So, you must first have a thorough understanding of your business’s financial information. That starts with getting to know your “baseline income.”
Your agency’s income probably fluctuates throughout the year. There is, however, usually a baseline minimum. For example, your agency’s revenue range might be between $8,000 to $12,000 per month. The baseline minimum is $8,000 (the lowest amount). That is the minimum amount your agency brings in and can also be deemed reliable income. Anything above the base is extra revenue and cannot be relied on so should not be considered in your marketing budget.
From the baseline minimum, or “reliable income,” you should also subtract company expenses such as office space, staff wages, and the purchase of consumables. With the money left you can begin to make allocation towards other important aspects of operation: with a large portion designated to marketing.
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Establish Marketing Objectives for 2017
Marketing can be a tremendously expensive undertaking, even more so if adequate steps are not taken to manage your budget. Your marketing budget and your agency’s objectives go hand in hand: one, essentially, determines the other. Thus, setting clear objectives for 2017 will help ensure good budget management.
Setting goals can be challenging. If you are unsure what your 2017 objectives should be, you should review the IIABA 2016 Agency Best Practice Report. The report highlights 250 high-performing agencies as well as the key aspects that make them successful.
With a set of objectives in place, you can begin to allocate your budget towards accomplishing your goals.
Key Areas of Focus for Marketing Efforts
Branding
Agency branding requires a consistent and continual effort. Often, good branding is the difference between a successful agency and a barely existing one – all else being equal. Your branding is what sets your agency apart from the competition and thus requires a concerted effort and a few marketing dollars.
Branding includes the color themes for your website and agency premises, your logo, office dress code, and customer communication. It also includes the places where you advertise and interact with your target market. A brand that is regularly seen advertising on television is viewed differently to one that only appears in newspaper classifieds.
That is not to say you must compete with State Farm or GEICO for air time. You just need to determine the medium that will be the best fit for your brand. Local agencies may benefit more from having a strong presence in the local newspaper rather than expensive television ads.
Digital Marketing
These days, it is safe to say that the bulk of your marketing budget should be steered towards digital marketing. Digital is cost-effective and powerful: you can expect bigger returns on your investment than pretty much any other media. What’s more, there are numerous ways to accurately measure your tactics in real time.
Digital marketing includes social media, your website, and email marketing. It requires investment in content, advertising, and referral generation if you are to experience the real growth possibilities that the digital sphere has to offer.
Depending on where you are in your business, you may need to apportion marketing dollars towards a website redesign or updating of your social media pages. If you already have a capable website and social profiles that are in line with your brand, you should consider giving content marketing a bigger slice of the budget.
Paid Advertising
Content marketing and digital branding take time. In most cases, you may not start seeing results for six months or more. So, it is a good idea to set some budget aside for paid advertising. The beauty of paid advertising is that the results are almost immediate. As soon as you put your ad out, you can start landing clients.
There are cost-effective methods, such as newspaper and magazine classified, available offline. They should be utilized if they are a good fit for your brand and your budget allows. However, your marketing dollars will likely be better spent on digital paid advertising options such as those provided by Google and Facebook.
With the latter options, you can launch ads that are specifically targeted to a group of people, based on your target demographic. That means getting your ad in front of people who are most likely to be interested in your offer, rather than a wide subset of people in the hope that some will be interested. You can create highly-targeted ads on Facebook for as little as $5 per day.
Make 2017 the year your agency realizes it’s true growth potential. A well-allocated marketing budget will have a significant impact on your business in the coming year, and beyond.
