Many insurance marketing agencies struggle to survive each year. One of the biggest problems is that there is no prospecting plan. Before an agency market plan can become a reality, it is crucial to determine the ROI (return on investment).
Prospecting for new clients can be a time-consuming task that many agents struggle to manage cost and time effectively. Prospecting to contract new brokers is crucial for an insurance agency’s survival. Both groups will be destroyed if they make inefficient use of their time and money. Money is the most important issue in insurance marketing. It is important to understand that money can be spent, but time can also be money. Selling is the ultimate goal for insurance agents. It is the recruitment of brokers that makes sales for marketers.
A prospecting plan that does not maximize your potential benefits can be detrimental to your career in insurance. Before you plan, calculate your ROI (return on investment). What is the cost of making a sale? How much time and money is required to invest in a producing broker? It is impossible to break even. You must analyze your prospecting techniques to ensure that you are making an income.
There are five main methods of prospecting. These include direct mail marketing, cold calling prospecting, email blasting and internet leads. This article will examine the ROI (profit potential) and provide facts about cold calling prospecting and direct mail marketing.
Calculating Return on Investment
Your intentions can be multi-purpose. Two basic goals are necessary. The first is to determine how much it costs you in time and physical dollars to become a producing broker. Another factor is what is called your agent’s Lifetime Customer Value. This is the amount of money that a broker will give you over a period of three years in insurance. This is done by analysing your current writing brokers and calculating their past net worth to you.
The ROI usually is a single-digit number like 3, 5, 7, or even a remarkable ten. This can be explained in terms of $1,000.00. If your ROI is 4, you can expect a return on investment of $3,000 if you invest in a marketing recruitment plan. This means that you could, based on past history, see a return rate of $12,000 for the next three years. Similar to the above, if you learn how to increase your ROI from 4 to 5, the investment would return $3,000 but the return would be $15,000. Your competitors don’t have a clue about ROI planning.
A factual analysis on cold calling prospecting
Unrefined lists of agents that you can call are too restrictive. This is similar to the yellow pages ads for Allstate, Farm Bureau and other similar insurers. The remaining 20% are also too inexperienced. Plus, another 5% to 10% of them are life licensed stockbrokers, home office staff, telemarketers and telemarketers. The remaining 40-45% might not be interested in your product, while the other half may.
It is hard to believe that 55% of residential telephone numbers are on the no-call list. Similarly, at least 60% of any phone numbers you may obtain are home phones. Cold calling agents via their cell phones is also a crime that can endanger your phone campaign. Agents of high quality do not use office numbers and instead reserve a cell number for their insurance business.
This optimistic example is a good one. Imagine your income being $100,000. This is equivalent to $40.00 an hour. Because the initial investment is low, you decide to call prospecting to find agents. You will reach 10 agents an hour if you don’t give any answers or provide incorrect numbers. Only two of the 10, as explained above, could be interested in your qualifications or have a distant interest. Let’s say you have five days and five hours each for phone soliciting. These figures will give you 250 calls. You can make 250 phone calls using these figures. One broker generates an average amount agency business, while the other has none.
These results are: 25 hours of time at $40 per hour plus 2 hours contracting equal $1,080.00. Add $20 to cover list and phone calls. The total cost is $1,100. The average writing producer for the next three years will be $3,300. Divide your average Lifetime Broker value by your expenses to calculate your ROI. 3. This means that you get $3,000 for every $1000 you spend. This is spread over three years so your first year gain will be minimal. Random broker cold calling prospecting is a way for many marketers to reach out to brokers without allowing them time to mature. You are financially stressed.
Examining intelligent direct mail marketing facts
This is an example of an insurance marketer that purchased a list semi-independent brokers and independent agents of different products. A postcard is mailed to 5,000 brokers. It is well-written and large in size. The cost of printing, printing services and standard mail postage, as well as the cost of the list, are $4,000. A normal business-to–business response will be between.8% and 1%. However, a consumer response can often be twice as high. The conservative return ratio of.8% means that 40 agents will respond to the mailed message.
11 of the 40 respondents are quickly eliminated as they are not qualified or interested. A very small number of the remaining 29 sign contracts. Another 50% to 7 of these are average agency writers. $4,000 has been spent already, add 20 hours of telephone scheduling, and $800 in time value. This amounts to $4,800. The total cost of your writing products at $3,300 each would be $23,100
Divide the $4,800 into the $23,100 3-year broker value to get the ROI. This figure is 4.812 which is an improvement over the previous example. Each $1,000 invested yields $4,812 back. This extra amount can often be used to recruit capital for ongoing direct mail campaigns. It is possible to inflict a phone scare and numb fingers, but it is not easy. Remember that the producer financial values used in this case were lower than average.
Two things are required to increase your ROI ratio. You can increase the positive ratio of your offer. You can solve this problem by improving the quality of your prospecting list, which is a relatively minor expense. This second option is dependent on your ability to provide agents with more information and communication, so that more than half of the cases are actually written. Also, you should work with producers to create additional products for your portfolio.