As an agency owner, at what point do you decide that your firm is large enough to use technology to attract new business, and therefore you consider choosing to engage in the services of an internet marketing firm? Is it when you reach a certain premium volume? Or perhaps when you achieve a pre-determined number of staff? Or perchance it is when you realize that unless you do something different from a marketing perspective, your business will not grow at the rate you anticipate or envision it to.

For example, when I speak with an agency owner, one of the typical questions that I always tend to ask them is, “What is your rate of retention?” The usual response that I receive back is, “Oh! It’s wonderful! We are at 90%!” My next question is always, “So how do you obtain new business?” That question is usually greeted with a huge grin, with the response of, “Our service is so good, that it is all word of mouth! We have no need to advertise and spend money.”

Well that is all well and good, but what many folks in our business fail to see is that even with a rate of retention of 90%, your business must still bring in 10% of additional new business, just to remain even with the year before in client count. If your business relies heavily on commercial business written, and you are constantly negotiating with your carriers for a more competitive rate on your renewals, chances are not only is your PIF (policies in force) rate dwindling at a rate of 10% per year, but also your premiums, and ergo your commissions, at an even faster rate of decline. Now, extrapolate that out over a five- or ten-year period, where you had a “wonderful” rate of retention of 90%, how much harder are you and your staff working this year, than years gone by?

Therefore, most agencies tend to realize after this dialogue that they need to act on a marketing plan, and in most instances, and especially in today’s day and age, internet marketing is the method of choice, and is what makes most sense.

According to a joint study conducted in mid-2015 by Velocify and Insurance Technologies Corporation, larger agencies that are usually more successful are typically greater users of a marketing technology product. This is in direct contrast to the smaller agency with diminishing revenues, which tends to use less insurance technology for marketing. In addition, it was also found by the study that agencies that are taking advantage of these types of marketing plans, are still not using them to their fullest capacity.

Per the report from the above-mentioned study, from one thousand agencies surveyed the following was discovered:

Revenue and Productivity Gains

Agencies that rely heavily on sales and marketing technology tend to have greater revenue growth and sell more insurance policies per producer (up to 43 percent more) and per household (up to 13 percent more).
Heavy users of technology are two times more likely than non-users to have better sales processes.

Widening Technology Gap

Agencies with significant revenue growth were 34 percent more likely to report plans to increase technology investments than were agencies with declining revenues.
Twenty-six percent more direct-to-consumer agency independents report plans to increase their technology investments.
Agencies with 100 or more employees are 93 percent more likely, on average, than those with 10 or fewer employees to use each technology.

In addition, the study showed a huge connection between agencies that were heavy in the use of technology, and an increase in revenue and productivity in the following categories:

Automated dialers
Marketing automation
Lead management software
CRM software

Per the study report:

Agencies that used lead management software sold 43 percent more insurance policies per producer and 13 percent more per household.
Agencies that used automated dialers sold 43 percent more policies per producer, and seven percent more per household.
Agencies using CRM software saw a smaller uptick of 15 percent in policies sold per producer, but sold 11 percent more policies per household, second only to lead management software.
Similar to CRM software, marketing automation had a greater impact on policies sold per household – driving a 10 percent increase.

However, it was further established by the study that the use of the above-mentioned means of technology was comparatively low with respect to all size agencies. For instance, with direct writing carriers, independent agency carriers, and those companies using captive agents, over 70% did not use direct dialers. With respect to agencies with more than 100 employees, approximately only 70% of them used lead management software. This usage was greater than the smaller agency cohort, however it is still considered low in this category.

Thank you to Velocify and Insurance Technologies Corporation for releasing the results of their study. It is important to thoroughly review your agency’s marketing plan, and always keep a keen eye out for means to improve ways of obtaining new business.

However and with that said, there are a few areas that you need to be aware of, and not make these very common five Internet marketing mistakes, according to Property Casualty 360:

1. Wasting time and money on bad SEO campaigns

“Black hat” SEO agencies dangle juicy traffic and lead carrots in front of insurance agents, luring them into ill-conceived, cookie-cutter SEO campaigns. They never work. SEO can be a very productive option for agents, provided they have a solid strategy. Generally, a successful lead generation SEO campaign for insurance agencies will have a strong local SEO component, focus on “long-tail” keywords in strategic niches with a very high potential for conversion, and use an aggressive off-site strategy involving the creation of content to acquire high-quality backlinks.

2. Dabbling in social media

Using social media to generate sales leads is a dubious proposition for most businesses, and in insurance, because of the skepticism mentioned earlier, is particularly challenging for agents. Basically, people don’t want to talk about insurance on social media, and don’t want to be sold to. Social media can be effective for building relationships with existing clients and establishing credibility, but building an engaged social media community takes a lot of time and effort — time and effort that can be spent more productively in other marketing activities.

3. Poor website strategies

If an agent is part of a corporate website structure, setting up a second, personal website will not pay off. First, it will confuse prospects and search engines as to which website is the correct one to use for inquiries. Even a little seed of doubt will produce precipitous declines in website visits and leads. Independent agents must make their websites solid, in terms of SEO, usability and conversion optimization (i.e., structuring the website to induce visitors to inquire further and make it easy for them to do so). Winning agency websites have unique, valuable content, structured to enable visitors to find what they need quickly. Also critically important: having a mobile-friendly website. More people now use mobile devices than desktops to access the Internet. A mobile-unfriendly site says, “shop elsewhere” to the majority of prospects.

4. Under investing in/mishandling e-mail marketing

E-mail is a terrific option for insurance agencies, if it is done properly. E-mail can kill several marketing birds with one stone, including lead generation, credibility building and relationship building. Specific problems to avoid, include:

Using purchased lists. This is never effective. Build a house list as relevant and up to date as possible. It will pay off in the long run, no matter how long it takes.
Starting and stopping. Consistency is the key to effective e-mail marketing. It can take subscribers months to catch on and engage.
Coming on too strong. Remember that skepticism! E-mails providing useful information put prospects and clients at ease, and generate meaningful inquiries in the end.
Coming on too weak. Selling is part of the equation. An e-mail providing subscribers with no way at all to interact or inquire is only doing half the job.
Not using an e-mail management platform. This is ineffective and amateurish. Many solid, reasonably priced online platforms are available to give emails a professional look, and make distribution and analysis easy.

5. Failing to track and measure

Agencies perpetuate bad online marketing campaigns when they fail to capture the right data and/or fail to review it regularly. In terms of data capture, agencies must be able to tell which marketing campaigns are generating leads, and how many leads are being generated. Here are a few extremely important gaps to fill:

Phone leads are often ignored in online marketing campaign tracking. Make sure you can trace any phone inquiry back to the source; basically this is done through assigning unique phone numbers to each campaign, e.g., a unique phone number for the website, a unique number for emails.
Phone and form leads (i.e., forms submitted through the website, advertising landing page) must be separated from non-leads. Standard tracking systems usually count conversions — which include leads, spam, personal calls, etc. Failing to separate actual leads from conversions can make agencies overestimate the results of their campaigns.

The next time we meet, we will be talking about a few different events, including the IIAA Tri-County event, PIA Metro RAP, and perhaps some others. It may even be time for pitchers and catchers to report for spring training, and we all know what that means: that it’s the beginning of convention season in this thing of ours!

So until then, Ciao for now!

Off To Market

Michael Loguercio