Traditionally, insurance
has been sold on a personal basis. Salespeople developed close relationships.
Direct-mail marketing was not "professional".
Today there 6 primary
techniques for marketing insurance services -- #1 being used the most
often and #6 being used the least often:
- Cold-calling
and Telemarketing
- Client Referrals
- Direct-Mail Marketing
- Advertising
- Premiums and
Specialties
- Promotion
Cold-calling
and Telemarketing: Cold-calling will produce positive results,
the price is often higher.
Referrals:
Referrals are an excellent way to obtain new customers. It is unlikely
that you will be able to build your client base solely on the basis of
referrals.
Direct-mail
Marketing: Direct mail is strictly a numbers game. It is relatively
inexpensive -- when you can select the right audience.
Premiums and
Specialties: Specialty items and premiums are useful marketing
devices with one of the other promotional methods.
Playing the
odds
The ideal arrangement
is to reach the fewest people while achieving the most inquiries.
Cost-per-lead is the
actual expense you pay to obtain the reply. Cost-per-sale is calculated
by dividing the total expense figure by the number of sales obtained.
The true measure of
a successful campaign will be your cost-per-sale. It does not matter how
cheap leads may be, if they do not end up buying. Do not be overly concerned
how expensive leads might be. If they are of high enough quality to make
your cost-per-sale profitable, they are good leads.
Experienced financial
services salespeople say they can close approximately 7% of decent leads.
In my opinion, this figure is too low.
Direct-mail
marketing
Direct-mail marketing
programs have four basic components:
- A clearly defined
target audience
- Creative, letter,
brochure
- An offer
- A response vehicle
People decide quickly
whether to read your mail or throw it away.
- If they think it
is important they will open and read it immediately.
- If it just appears
interesting they might save it in their reading material file.
- If it does not
appear to apply to them, but they think it might be of interest to a
friend or associate, they pass it along.
A
typical direct-mail package: Outgoing envelope, a letter, another enclosure,
a reply card. To whet a prospect's appetite for more information.
A lead is valuable,
so provide a quality fulfillment package.
Direct-mail
alternatives
- Insurance lead
generation
- Card Packs
- Take-ones
- To current customers:
Statement Stuffers
- For independent
insurance brokers/agents: Mailers provided by others.
Where to mail: Home
or Office?
Two reasons for sending
financial offers to the home address:
- Prospects typically
will not have their mail screened
- Personal, prefer
to keep their finances away from the job scene.
Creating direct
mail
One ingredient in
the marketing of financial products and services that is essential in
any direct-mail package is quality. Financial services business is quite
personal, requiring a high level of confidence in you on the part of the
potential customer. The service industry requires an image of quality
and respectability to win customers.
Envelope packages
A good place to start
is with the letter. You should use a letter. This is the only enclosure
that can convey the slightest illusion of personalization -- even if it
is preprinted in quantity.
- Tell the prospects
who you are
- Describe the offer
and explain how they will benefit
- Explain how to
reply and why
Studies indicate that
50% of prospects read the first line, and that is all they read. 80% will
read the P.S. before the letter.
Advertising
It is estimated that
households with a reasonable credit history are receiving as many as 10
mail offers in a single week. Many of these are credit card and home equity
loan solicitations...with plenty of insurance plans and investment programs.
The problem with advertising
financial services is that it appeals to a very small segment of the population.
For most ads, it is believed that a minimum of three runs are required
to maximize effectiveness.
Begin your selection
of a target audience by reviewing the characteristics of your current
customers.
Promotional campaigns
should include plans to keep and reuse leads which have not become customers.
Plan to divide the
results of your marketing effort into four categories. These groups should
be utilized to generate further potential business as follows:
- Respondents who
became customers are now part of your customer file.
- Respondents who
were interested but not ready to act just yet should be kept in a
special follow-up file to be approached at a time you feel appropriate
(when they said they would have funds available, for example).
- Respondents who
were not interested should be maintained in an old lead file. Including
them in a subsequent direct mailing and contacting them by telephone
as part of an "old lead" revival program usually produces
excellent results, far above the level of purchased lists.
- Prospects you
failed to contact (undeliverables, no answers), should be filed so
you can check new efforts against that list and eliminate in future
mailings.
Follow-up leads
and combination programs
Outgoing telemarketing
can be quite useful in conjunction with other promotional programs. It
is usually better to precede the call with direct mail or advertising
than the other way around.
60% of those surveyed
wanted to receive information on financial services and sales materials
through the mail rather than by any other means.
Continuity of marketing
implies that a marketer should be delivering the message regularly to
potential audiences.
These effects build
even further if you do several ads and several mailings. This is due to
the fact that you are achieving both frequency and continuity. The most
common combination is direct mail and print ads. Radio and direct mail
is another effective match. And telemarketing and direct mail work.
Flighting and
pulsing
Flighting uses heavy
marketing for some period of time, a break with no promotional activity,
and then a lot of activity again.
Pulsing uses heavy
marketing followed by a much lighter schedule (as opposed to none) and
then heavy marketing again.
Planning combination
programs
Since the primary
advantage of multiple programs is their audience overlap and thus additional
exposure to your message, any marketing effort that enhances the overlap
is bound to produce better results.
Using the exact same
list for a second (and more!) mailing, or running the same ad in a given
publication several times, is the surest way to make multiple impressions
on the same audience. The benefits of this approach can be enhanced with
additional activities.
A common theme is
a must in a multi-part program.
Following up
leads
There are four components
to the follow-up process:
- Fulfillment
- Sales calls...the
phone calls, letters or visits in which you answer questions and attempt
to close the sale.
- Record keeping
and results
- Analysis
Prompt fulfillment
is important. What you send is equally critical.
Your call should be
made about four days after you mail literature. Never throw away an old
lead.
Record keeping
| The amount
of sales is a cumulative total of the dollar volume of all sales
resulting from the campaign. |
| The average
sale is calculated by dividing the total sales figure by the number
of sales. |
| The cost-per-sale
is computed by dividing the cost of the campaign as already calculated
by the total number of sales. |
| The profit/loss
figure is the difference between your income from the program
and its cost. |
| The return
on investment is the profit (or loss) divided by the cost of the
program. |
A
lead, no matter how old and cold, is usually a better prospect than a
random name selected for a cold-call.