Answer this question.
Advertising is what? “
It’s worth taking a moment to reflect on it.
This question was often answered by agents when I asked them.
This was also your solution?
You may be right, but only to a limited extent. There’s more to it.
Advertising’s Purpose Is To Make Prospects See Your Products…And Get Them to Act!
It is just part of the equation to keep your name and your agency’s brand front of your prospects. Your advertising is not effective if it doesn’t inspire your prospects to take action.
It’s nice to create “top-of-mind-awareness” or to establish yourself or your agency as a brand in your prospects’ and customers’ minds. You won’t be able to do this if you don’t have the same deep pockets as some of those large, national corporations that you see on TV.
There are two types of advertising:
This is image, or institution advertising. It’s the type that you will see most ads in magazines, newspapers, and other media.
Image or institutional advertising has a major problem. This is because ads made in this format are not designed to sell. They are there to let prospects know about the agency and its greatness.
This is a problem because prospects don’t care about how wonderful, big, or famous you are. Their main concerns are:
What can you do to help them? How can they solve their problems or meet their needs and desires? What unique advantages or benefits do you have that they don’t get from your competitors?
These questions are not answered by “Image” or institutional advertising. This type of advertising is used by large corporations like IBM, AOL Time Warner and Coca Cola as well as most insurance companies, primarily to keep their names in mind after they have established themselves in the market.
You may be asking, “If image marketing is so ineffective then why do these large corporations still use it?”
There are three reasons.
They have a virtually unlimited advertising budget.
They believe that the advertising is working, despite the fact that it’s not possible to accurately track the results of institutional or image advertising.
A third benefit is that shareholders are usually pleased with an image ad. Their shareholders want more profits, but they don’t realize that the ads aren’t working because they’re not marketing experts. They are happy to have it run, because it makes it easy to tell others they own a piece of the company.
It is a shame that these huge corporations don’t see the inefficiency of their image advertising campaigns. They could have saved many millions of dollars if they had. Even better, if they were able to use the right type of advertising (which will be discussed in a moment), they could make millions more per year.
You may have a small advertising budget, just like most agents. You must ensure that every dollar yields the highest return. The best way to achieve this is to use the second type of advertising, which works. Direct response advertising is what it’s known as.
Contrary to image or institution advertising. It is a wasteful use of money.
Direct Response Advertising Could Make You A Fortune
Direct response ads (or sales messages) accomplish three major objectives.
1. It answers the most important question of the prospect, “What’s in this for me?”
2. It asks you to respond or take action on behalf of your potential customer!
3. It is trackable, measurable and accountable.
Direct response ads (or sales messages) appeal to prospects’ self-interest. It explains all the benefits that they will receive from using your product and doing business with you.
Direct response sales messages (e.g., flyers, sales letters, postcards, etc.) allow you to identify, qualify and target prospects who are interested in your offer. You can eliminate non-interested people early on, and maximize your marketing dollars by selling only to those who are most interested and can afford it.
Agents often think that their market is all people so they make sure their materials and ads appeal to everyone. Maybe you have done it yourself.
This could be why your ad isn’t performing as well as it should. This is what you see.
If you try to sell to everyone, you’ll end up selling to no one!
Your products and services might not be right for everyone. However, some people will require them more than others. You should identify your ideal prospects (those who are interested in what you have to offer) and then make your most compelling offer.
If you are selling homeowners insurance, then your ideal customers would be people who own their homes. You can reduce the cost of advertising and increase your chance of selling if you get a list of homeowners who meet your criteria. Then, send your offer to them. You can also rent a list from a magazine about home-improvement and send a letter to them with your tempting offer.
Similar to the above, if your product is a particular type of auto insurance, you will need to identify the addresses and names of people in your area who own the same vehicle as you are insuring. Then, you can send them your offer. This is known as niche marketing or targeted marketing.
It doesn’t really matter what type of insurance you sell. You should use the same approach. We simply don’t both have the marketing budget to reach everyone. We don’t want to.
Here’s a key point to remember:
Customers and prospects want to deal with an agent who is able to relate to them and who is knowledgeable in their particular areas. They won’t do business with agents who try to be everything to everyone.
You might take your BMW to a BMW dealer that specializes only in BMWs. A repair shop is specialized in your vehicle.
A commercial image or institution ad is similar to operating a garage that repairs all types of cars. To reach enough people interested in your product or your service, you will need to place many ads. Most people who see your advertisement aren’t interested or unable to afford the product or service you offer.
Direct response ads, as the name suggests, stimulate a prompt and immediate response. This could be a qualified inquiry, phonecall, or visit to your agency. Or, even better, it encourages an immediate sale.
It is interesting that even though most agents admit that their ads don’t usually generate sales, some agents continue to run them because their advertising made people more aware of their agency.
This is absurd. This is an important point.
The sole purpose of running an ad is to get the reader to take some action towards making a purchase.
This is something I cannot stress enough. It’s a waste to place an advertisement for any other purpose than telling your prospects how great you are. Your prospects don’t care much about you. They only care about their problems and how they are treated quickly, efficiently, and economically.
Marketing is a great way to reach your prospects and let them know about you and your services. Direct-response marketing is a great way to increase your income.
Marketing is the engine of your business. If you feel that your income is being affected by tougher competition or poor economic conditions, do not cut or eliminate your marketing.
Instead, you should realize that this is the right time to be aggressive and ramp up your marketing campaigns. Direct-response marketing will help you acquire more clients and significantly increase your market share as your competition leaves the advertising industry.
Marketing is an investment, not an expense. Doing more marketing (especially when your competition is cutting back) will help your agency or practice reach new heights of profitability and success.