Your Agency's Marketing Budget
Have it. Spend it. Track it. (And the top 10 marketing sources from 1,500+ insurance agents)
(Part 2)...Don't miss the Top 10 marketing source table below!
Marketing ROI & How to Track Your Investments
It’s easy to spend money. The next step is to track how your spending is paying off. In last week's article, we recommended the top 5 marketing areas to invest for your agency. In this article we'll cover some of the basics when it comes to tracking whether those marketing investments are paying off.
There are 2 primary ways to track marketing source ROI:
- Percentage. I.e.: you spent five dollars on Internet leads and received $10 of commissions therefore you earned 100% ROI
- The $1 Principle. You should track your marketing ROI down to the dollar. I.e.: what does $1 in a particular marketing expense buy you in direct-mail, Internet leads, referrals, etc.
PRO TIP: Savvy marketers will be constantly experimenting and A/B Testing. You should test, test, and retest to see what works. What tweaks can you make to get you a better ROI?
What to do:
- First: Know the lifetime value of a customer to get a sense on how much you're willing to spend to acquire them
- What is a customer worth in year 1? What is the average tenure of a customer? Knowing the answer to these questions can help you set your marketing budget appropriately.
- If average customer revenue is $300 per year and the average tenure is 8 years (a total of $2,400), what are you willing to spend to acquire this customer?
- Second: Tracking source of a new client/policy can be as easy as having your employees ask the question: "how'd you hear about us?" when they're getting a quote or writing a new policy
- Push customers who give general responses (i.e. online) for actual specifics (like Facebook, Google search, etc.)
- Tip: the biggest mistake you can make when asking that question is to not have a standard place to track the responses!
Tracking the source of the lead is where agents need to spend
more of their time.
- Third: Have your agents track the source of the lead
- This is the area that is worth spending more of your time as an agent. You can stay low-tech in this space by simply capturing the quantity of leads / calls / new polices that are coming in by having your employees ask the "how'd you hear about us" question and tracking within an Excel document, or you could leverage the power of marketing software to track your agency's performance by marketing source, team, and individual team member.
- Tip: don't get carried away with the the number of marketing sources that you're tracking. (I.e. that "sign on the park bench" is WAY too detailed). It's great to know some of the details, but for that example the overarching marketing category would probably be 'Signage' or 'Print Media'
- Product Plug: RacingSnail is likely the best application on the market for insurance agents to track this information. With their platform - which is a comprehensive approach to increasing production within your office - you can compare actual commissions generated from marketing categories and specific expenses, and display the net profit for easy analysis regarding which marketing strategies are profitable.
- Check them out at: www.racingsnail.co and you can check out the details of our partnership with Racing Snail here.
See the table below for the Top 10 marketing sources that insurance agents are tracking across the country.
The Club Capital Team
By the Numbers
We can learn from our peers by seeing the top marketing sources that other agents are tracking within their office.
(Data provided by RacingSnail)