Once upon a time you’d go to your local coffee shop and look around to see the majority of people reading newspapers or magazines. Today, when you go to that very same coffee shop and look around you’ve probably noticed that very few people are holding a newspaper or a magazine. Instead they are looking at a screen.
So, what happened? Did the coffee shop attract new younger customers? No, they didn’t replace their old customers with new younger customers — their customers adapted to technology.
Technology doesn’t care about age or gender or how things have been done in the insurance industry for the past 100 years. As an insurance agent, this shift in consumer behavior is hugely important for you to understand in terms of how your clients and your future clients are using platforms like LinkedIn, Facebook, and Twitter today to consume information.
If you are not actively participating on these sites, you are missing out on an opportunity to provide value to your clients and your future clients.
Most of us hate to admit it, but insurance is quickly becoming a commodity. Contrary to popular belief this does not have to be a bad thing if agents are willing to combat this by adopting new and emerging technology.
Old School Prospecting
Let’s say you are a commercial insurance agent and you are trying to write any type of business you can get your hands on. Understanding that everything has an opportunity cost and time is the most valuable asset we own, let’s say your time is worth $25 an hour ($50,000 a year) to make it easy. Then let’s say you do your prospecting based on the traditional sales model and you do 100 prospecting phone calls.
Of those calls let’s say we set 10 appointments, and of those appointments we get 3 that allow us to do quotes for them. Of those 3 we get 1 as a customer (even though this is just an example I feel these numbers are generous given the cold calling game today).
Now let’s say it took you 60 hours to do that (make calls, drive, have appointments, work up quote, present, etc.), so 60 hours times $25 an hour our total cost is $1,500 to acquire one customer that generates $2,000 a year in revenue for us ($10,000 – $15,000 premium account). That doesn’t seem too bad right?
New School Prospecting
That is until you look at the new school model. In this model let’s say instead of just going after everybody and anybody, you decide you are only going to write construction contractors. So you spend your time up front building your marketing and sales process so that only your best prospects are funneled down to you. You still have to spend time checking the system, making a few updates and changes, and you still have to take some calls and appointments to further qualify your prospects.
Even so, this process only takes us about 15 hours (compared to 60) and we verified that only 5 (compared to 10) were worth talking to, and 2 were worth quoting (compared to 3) and one became our customer. If we calculate the final numbers on this, we find that it only cost us $375 (15 hours x $25 an hour) in time to get this customer.
Let’s say we also spent $500 on marketing, so our total cost, including the $375 in labor, was only $875 to acquire a single $2,000 customer. In total we spent 75% less time and almost half the money for the same result.
The Snowball Effect
Now let’s go one step further. Considering that we have built a marketing system that continually finds our ideal prospects and qualifies them for us, and that it works on autopilot “24/7 – 365,” we now have much more time than we did before. We can accomplish in 15 hours what takes most other agents 60 hours.
So we can get four times the customers that the traditional model does, and accumulate 4 new customers, which results in $8,000 in new revenue, and it still only costs us $1,500 ($375 x 4) in expenses to acquire them. It’s important to note that over time your marketing costs will go down because once you build the snowball and let it roll downhill it will get larger over time, thus resulting in a lower cost-per-customer acquisition cost.
This system allows for organic growth on the back end in referrals and higher retention, which every agent really wants, and it gets rid of cold calling, which every agent really does hate.
The Numbers Add Up
With this understanding, your marketing costs will reduce because you will get higher ROI for every dollar spent. Investing some time on the front end in building the system will allow for huge returns and less time invested on the back end. So in total we made $6,500 ($8,000 – $1,500) in new revenue in the same amount of time it took the agent in the traditional model to acquire $500 ($2,000 – $1,500).
It is important to find your most profitable customer and tailor your marketing plans to them. By doing so you will be able to generate more value for your customers, more profitability for yourself, and battle the notion that insurance is a commodity.
Great, you’re sold on the value of social media to market your agency! But there's Facebook, there's Twitter, there's Instagram and Pinterest. In fact, there are so many different ways to place your insurance agency on social media that you're starting to get a little overwhelmed. Take a deep breath. You don't need to be on every social media venue imaginable, but you do need to use the ones you choose more effectively.
Quality over Quantity
Think of choosing your social media platforms in the same way you might choose which of a large number of live networking opportunities you’re faced with. Even if you could possibly belong to every Chamber of Commerce, referral network and assorted business organizations available in your business area, you couldn’t possible have the time to attend each and every event. So how do you choose? As a savvy professional, you accept the opportunities that are most likely to put you face-to-face with your best potential clients. And those decisions are heavily impacted by knowing which events your best current clients are likely to attend. Your logic is sound: if your great client would likely be at the event, more people who are similar to that client are likely to be there as well.
Social media selection works on the exact same principals. Yes, there’s a huge variety to choose from, but you want to be in front of the people who have the greatest similarity to the type of client you’d hope to attract. With gigantic platforms, like Facebook, it’s probable that every business you can think of has potential customers as part of their base. But you still need to make your selection based on who you most specifically want to target, and the likelihood of being able to engage with them on a specific site. And similar to your choices of local organizations to join, a commitment to being actively engaged is needed; otherwise you’re wasting your time and theirs.
The quality of your participation in social media is more important than the quantity, especially initially. Yes, the more platforms, the more prospects, but the best results accrue when you master the ones you currently use before expanding to new ones.
Of course we all think of Facebook when social media is mentioned, but social media has proliferated and evolved into many new shapes and forms. Some may be worthwhile your time to explore for marketing your agency. Read on for specific recommendations on the social media platforms for independent insurance agencies, as well as tips on how to effectively market your agency using each.
In the post, “Social Media Guide” we’ll cover specific social media platforms with recommendations and tips on how to succeed with each. But many of the principals apply regardless of the particular media.
When it comes to implementing social media, or any marketing channel for that matter, you have to set reasonable expectations. If you only see 50 customers in your office in a given week, it’s unreasonable to expect 500 new Twitter followers or Facebook fans in that same time. If you’re new to social media, it’s important to understand your place in the social landscape and determine which channels are right for your firm. What platforms are your customers and potential customers already using and which of those provide the best channel to deliver your message? Newer platforms like Vine, Instagram and Snapchat likely won’t be a fit for your audience, so focus on more traditional platforms like Facebook and Twitter to engage your users.
13 Types of Social Media Platforms...and Counting
Social media is defined as “forms of electronic communication through which users create online communities to share information, ideas, personal messages, and other content”.
Social Media Platforms
1. Blogs/Publishing tools– Wordpress, Blogger, Squarespace
2. Micro-Blogging sites –Twitter, Tumblr, Posterous
3. Social networking sites– Facebook, Google Plus, CafeMom, Gather, Fitsugar
4. Collaboration tools– Wikipedia, WikiTravel, WikiBooks
5. Rating/Review sites– Amazon ratings, Angie’s List
6. Photo sharing sites– Flikr, Instagram, Pinterest
7. Video sharing sites– YouTube, Vimeo, Viddler
8. Personal broadcasting tools– Blog Talk radio, Ustream, Livestream
9. Virtual worlds– Second Life, World of Warcraft, Farmville
10. Location based services– Check-ins, Facebook Places, Foursquare, Yelp
11. Widgets– Profile badges, Like buttons
12. Social bookmarking and news aggregation– Digg, Delicious
13. Group buying– Groupon, Living Social, Crowdsavings
Use the Tools
Look for tools that can make managing your social media presence easy and effective. Basic tools should include the ability to schedule content in advance and post across to several platforms from one place. Examples include Hootsuite, Sprout and Buffer.
To select the best tools, identify your biggest pain points and look for solutions tailored to your needs. For those struggling with content development, look for a platform that utilizes RSS feeds to create a library of relevant content. Or if your insurance brand provides branded materials or social content, consider looking for a platform that allows for easy content syndication. Some content syndication platforms will even alert agents by email when a new piece of content is available, letting them approve or deny the content right from their inbox.
Social media aside for a moment; why should customers do business with an independent agent like you? Understand that as an insurance agency, it’s unlikely that your content is going to go viral – but that’s okay.
New York Life has one of the largest Twitter and Facebook followings in the insurance industry. Why? Because instead of trying to develop content that would go viral, they focus on providing value to their followers and fans. When looking for social content, New York Life’s social media team shares everything from articles on how to save your pocket change to guidelines for selecting the best life insurance plan. Their dedication to providing useful information established the company as a go-to source for customers experiencing important life events such as having children or caring for aging parents.
Social media — even those historically text-based such as Twitter — have never been more visual. The creation of a social media presence that is visually strong can be very intimidating for companies new to the medium. Luckily, it’s never been easier to create visually compelling content for distribution on social media. Sites such as Canva exist purely for this reason — to help social media marketers who don’t have a design background create great-looking visuals for social media.
And video content is extremely helpful in driving traffic and search engine rankings. Today most of us have an excellent videocam built into our phone. Videos don’t have to be Hollywood productions. Think about recording short videos of yourself explaining a new product or introducing a new team member.
Work with your carriers. Many of them have resource libraries including images and video that they’re eager to have you share with your clients.
Can I Have a Witness?
Per our post, “How to Leverage Online Client Reviews”, testimonials are powerful. There is no better way to elevate your brand on social media than to capture testimonials from those customers and distribute via social media.