An interesting blog about insurance agency marketing entitled I Want Leads like I Want My Morning Coffee, was written by John Scranton. John is a former sales executive for an insurance agency or, in their terms, an “agency producer”. The article stated that John craves quality leads just as he craves a good cup of coffee. John is not the only one who feels this way. Salespeople all crave high quality leads to improve their time efficiency and close ratios. This process is sometimes called a sales funnel, or sales pipeline. It is easy to see that if you place high-quality leads at the top of your selling funnel, more sales will flow out of the bottom.
The top of the funnel is the most common question that salespeople ask. Let’s take a look at a simple sales funnel. A sales funnel usually includes prospects, suspects, meetings, presentations, proposals and closings (new clients). This is called a “sales funnel” because it looks like a funnel. The funnel’s top is filled with suspects, while the bottom is full of closes. The funnel’s top is usually filled with suspects. Let’s suppose that 1,000 suspects are at the top B2B (Business to Business) sales funnel. These suspects could be CEO, CFO or CTO. They might also be CSO, CMO or CSO. The companies may be located in a specific region such as the Northeastern US. There are many variables that can affect the outcome of these companies, but we’ll just focus on them for now.
Whose job it is to fill the top of a funnel? Producers are required to fulfill certain insurance agency marketing plans. This is also true for other types of businesses, especially smaller ones that are reluctant to spend additional marketing dollars on top of their existing sales budgets. Insurance agencies expect their agents to network with their prospects, cold call and attend community events, charity events, and other events in order to build their own pipeline and fill the top of their funnel. An insurance agency producer is actually responsible for insurance agency marketing. This is a likely path to failure as the new producers are often not prepared to deal with the evolving world of lead generation, which has moved away from face-to-face networking to eMarketing and Web Marketing to include SEO, Web Seminar Marketing, SEO, and Social Media Marketing to name a few.
John and other producers agree that filling up the funnel top can be a difficult task. This is why many new salespeople in insurance agencies fail. They are not skilled marketers and don’t fill their funnels to the fullest. Insufficiently qualified prospects at the top will always lead to poor results at the bottom. Why aren’t B2B companies investing more in marketing, such as insurance agencies? There are many reasons, I believe.
- Sales Spend: An agency that pays a producer a salary of $50,000, and contributes to overhead, health benefits and other expenses, is already close to an annual investment of $100,000. This investment appears to be just more overhead if you add $15,000 marketing.
- Marketing is something that some “C-Level” executives at smaller companies simply don’t believe. Many people still see cold calling and personal network as the key to generating leads in the insurance agency industry.
- Many insurance agency marketing dollars and plans focus only on local events, traditional seminars, and possibly improving their website’s look and feel. They may not be familiar with web marketing or don’t want it to be an investment.
- Many agencies don’t have a marketing department or are uncomfortable outsourcing their marketing. This lack of marketing expertise results in a marketing vacuum.
While there are many reasons for this, the net result is the same. Producers who don’t have enough quality leads coming into their funnel at the top will not have enough sales from the bottom. These results are predictable, as they have high sales expenses and low returns on sales investment. Here are some tips for insurance agencies regarding the hiring of new salespeople. You can invest in three new agents producers but not in marketing. Instead, invest in two additional producers and use the savings to fund a marketing support program for your agency. What if your budget is not sufficient to hire one producer? You can convince the producer to accept a lower salary and guarantee a lead generation program that will “insure” their success. Without a lead generation program, hiring a producer is like buying a brand new car without enough funds for gas. This formula won’t get you very far.