Have you started planning your agency marketing budget?
If not, now is the time.
Marketing has an enormous impact on the growth of your insurance agency.
As if you needed any confirmation, a 2016 survey found that insurance agencies that spend more on marketing make more money.
“Velocify, which surveyed more than 1,000 insurance agencies, found that agencies spending less than 5% of their revenue on marketing are three times as likely to experience flat revenue. However, agencies spending 15% or more tend to see a revenue increase of more than 20%, year-over-year.”
We all love to pin our success on referrals, but the truth is, marketing plays a huge role in the growth an insurance agency.
[tweet_box design=”default” float=”none” excerpt=”If you’re not growing as fast as you’d like, you’re most likely not prioritizing marketing enough.”]If you’re not growing as fast as you’d like, you’re most likely not prioritizing marketing enough.[/tweet_box]
However, we can’t blindly throw money at random marketing tactics and expect to experience great results. Agencies need to be intentional about how they determine their marketing budgets to ensure their marketing dollars are invested wisely.
The following guide will outline the key factors to consider when planning your 2021 agency marketing budget.
1. Understand Fixed Operational Costs
First things first – agencies who spend more than they earn don’t last very long. I’m sure this makes sense.
You have to figure out how much money you’re going to allocate towards operational costs. This determines how much wiggle room you have in other areas, such as marketing.
Now is the time to consider how your operational costs will increase in 2021 as your agency expands.
Do you plan on hiring more employees? Will you need more commercial space?
Fortunately, independent insurance agencies have the ability to run lean operations and keep costs to a minimum.
2. Measure Your 2016 Marketing Performance
Before you decide what your agency is going to do in 2021, you want to see how your marketing initiatives have performed in 2016. This will indicate where your current areas of strength and weakness are.
Here are several metrics to look at:
- Total revenue generated
- Total leads generated
- Total number of new clients
- Average website visits per month
- Average website leads generated per month
- Social media reach
- Email clickthrough rates
- Landing page conversion rates
- Paid vs. organic lead percentage
There are tons of other metrics you could analyze – ultimately you have to decide which are most relevant to your agency.
SEE ALSO: Price-based Marketing: Time for Insurance Marketers to get Back to Basics
3. Determine Your 2021 Marketing Objectives
Your marketing budget is determined by your agency’s marketing objectives.
What exactly do you aim to accomplish in 2021?
If you’re not sure what your goals should be, review the IIABA 2016 Agency Best Practices Report for an inside look at what’s working for 250 high performing agencies around the country.
Once you’ve set your quarterly and annual goals, you can use the data from the previous section to determine how much it will cost to accomplish those goals.
Obviously, you’ll want to improve on your 2016 marketing performance, but it’s better to be conservative when estimating budgets.
Let’s take a look at several key areas where your agency can invest in marketing to meet your objectives.
Your Agency’s Brand
Branding is what sets your agency apart over the long-run.
If you have no brand, you’ll forever be at a disadvantage against your well-branded competition.
This doesn’t mean you need to compete with GEICO and State Farm for TV air time. Local agencies have a distinct advantage in their specific market over national direct and captive competitors.
What is that advantage?
Local agencies know the area inside and out.
- Your logo, business cards, and letterhead
- The overall style of your website and social media
- The way your office looks
- The way your staff answers the phone
- The way you and your staff dress
Every way in which you interact with your customers and prospects builds on your brand.
Whether you want to do some minor updates or you want to do a complete re-brand, the costs can vary from a few hundred dollars to upwards of $5,000 or more from a design firm.
SEE ALSO: How To Be A More Personal Brand For Your Audience
There’s never been a better time to market an insurance agency than today. Digital marketing is powerful, cost-effective, and has many measurable marketing tactics. Digital marketing needs to be the top priority for all insurance agencies in 2021 and until further notice.
Digital marketing includes:
- Your website
- Social media profiles
- Content marketing (blogs, videos, podcasts)
- Landing pages and lead magnets
- PPC advertising (paid search, social media ads)
- Email marketing
- Conversion rate optimization
- Referral Generation
Hopefully your agency already has a website to build your digital marketing campaigns around.
As long as your website is mobile-friendly, loads quickly, and has a modern design, it probably won’t require any major renovations for 2021.
The area most agencies want to invest heavily in is content marketing. Whether you and your team create the content yourselves or you hire someone to do it for you, the internet runs on content and the more high-quality content you publish, the more presence you have online.
The cost of content production will vary – you can either hire freelancers through a service like Upwork or you can hire a marketing agency to create your content. Despite claims from internet marketers about how cheap and easy it is to outsource content, you’ll find that you get what you pay for.
Expect to spend at least $50 to $150 for a high-quality blog post and even more for video content.
The only catch is that content marketing is a long-term strategy that typically takes several months to produce results. While it is cost-effective in the long run, it doesn’t help agencies who need clients right now.
That’s where PPC advertising comes in.
Paid advertising can be the quickest way to land new clients with digital marketing.
The beauty of advertising on Google and Facebook is that both platforms are flexible for any budget. Facebook is especially favorable for small budgets, allowing you to serve highly-targeted ads for $5 or less per day.
Granted, the more you spend, the more people you will reach.
The third area that insurance agencies should allocate a significant part of their budget to is social media, assuming you won’t be handling this yourself.
Social media is key for all businesses right now, but insurance agents especially have big opportunities on LinkedIn, Facebook, Twitter, and Instagram.
Relationships are crucial for insurance agencies and social media is the most scalable tactic for creating new relationships.
If you don’t have the time or desire to manage your agency’s social media, you can hire a freelance social media manager for $1,000 to $2,500 per month.
SEE ALSO: The Only Insurance Video Marketing Guide You’ll Ever Need
Although traditional marketing isn’t quite as effective as it used to be, there are still plenty of opportunities offline for insurance agencies to find clients.
Insurance agents who get the most clients offline do so by hosting and attending industry events, networking in local business groups, and through customer referral programs.
Of course, you can still run TV, radio, and print ads – but most agents find their money is better spent on digital ads.
You must have an agency marketing budget.
By spending the time to determine and set your marketing budget, there becomes accountability to execute.
Determining your 2021 agency marketing budget starts with a review of how much money you have to work with and how your marketing campaigns performed in 2016.
The next, and most important, step, is figuring out what your marketing objectives are.
Then once you know what you want to accomplish and how much you can spend, you can start breaking down your budget into various marketing tactics to fit your overall strategy.
This is going to take time.
Now is that time.
P.S. Get the best articles on insurance marketing delivered directly to your inbox. Subscribe to the EMK newsletter today!