Marketing is a crucial part of running your insurance agency. You need to recruit new clients and retain your current ones. But how do you know how much to budget for your marketing efforts? It can be challenging, especially as you have to consider every part of your marketing, from email marketing to social media marketing.
The following should help you determine the ideal marketing budget for your insurance agency.
Start with Clear Marketing Objectives
Before you can even start to think about your budget, make sure that you have clear marketing objectives. These goals need to connect with your insurance company’s overall vision. Maybe your objective is to retain clients by building trust. Or maybe your main objective is to expand your client base. These two objectives would lead to very different actions.
Understand the Channels Your Clients Prefer
Once you are ready to start planning your budget, the first step is to make a list of all the channels you need to include. The best starting point is to figure out which channels your clients are on and which they prefer. For example, a younger clientele will likely appreciate text marketing, while slightly older demographics may prefer email marketing.
Think across platforms and communication methods, including social media. In terms of social media, think about Facebook, YouTube, LinkedIn, Twitter, Instagram, TikTok, Snapchat, and others. The ones you choose will largely depend on your client base. Then, consider other communication methods, such as texting, email, and snail-mail.
Your goal here is to figure out which channels your clients prefer, as those will give you the best ROI. Depending on your demographics, you may just skip some of the social media platforms. While you should still claim an account on them, you don’t have to allocate a budget if your audience isn’t there.
Think of this as your chance to make a list of what to include in your marketing budget and to prioritize it.
Look at Data
As you create a list of channels to include, be sure to look at the actual data. While your instinct will give you some information, analytics will be the best source. For example, analytics can show you which social media platforms are bringing in the most clients so that you can focus your budget on those.
Don’t Forget About Other Marketing Costs
While the channels are crucial for marketing, they are far from the only costs you will have. You will also want to consider:
- Google display ads
- Pay-per-click advertising
- Traditional advertising in newspapers, billboards, or at bus stops
- Promotional events
- Encouraging reviews
A Guideline: Consider 3 to 5% of Your Income
When it comes to actually calculating your insurance agency’s marketing budget, a good rule of thumb is to allocate about 3-5% of your total income. But remember that this is a general rule of thumb. Depending on the current state of your insurance agency and your goals, you may need to spend more or less than this.
If, for example, your digital marketing efforts are still in the early stages, you may need to allocate more. This can be a temporary measure for a year or so.
Look at Your Past Budget
You can also get an idea of the appropriate marketing budget for your agency by looking at your past marketing expenditures. Then, compare the expense to the results you saw. Of course, this is not foolproof, as you should also look for ways to make the most of your budget.
Think About the Tools You Will Use – Both Free and Paid
Take the time to consider what tools you will use in your marketing efforts. This is the time to look for free or low-cost options as a way to save money. But remember that you will get fewer features and lesser results from free programs. As such, it is typically worth paying for a tool that will give you better results. Think of it as similar to why you shouldn’t choose free insurance agency management software.
While free solutions typically aren’t the best option, there are times when it can make sense. One example is if you can look for features that are already included in the programs you use. Our agency management software, for example, includes email marketing functionality, so you won’t have to spend extra on this type of tool.
Know Where to Get Advice
Once you have your marketing budget, make the most of it by getting advice from those who have expert insights. If you don’t already have someone on your team with marketing experience, consider hiring one. Or look for organizations that specialize in helping insurance agencies with marketing. You may be surprised by the resources available from insurance trade organizations.
Of course, you can also consider outsourcing your marketing efforts by hiring an agency or individual to handle them. While they will know how to make the most of your budget, they will also come with an additional cost.
Always Track Your Results and Adjust as Necessary
As with any other aspect of running your insurance agency, take the time to track your results with your marketing efforts. You need to make sure that your investment has led to a return. This is yet another reason to look at data before you start your marketing efforts. Not only does it help you plan those efforts, but it also lets you track your success.
Use the data on your marketing to make changes when necessary. If you notice a particular strategy isn’t working well despite investing a fair amount of your budget into it, change the strategy. Maybe look at other parts of your marketing strategy that are seeing better results for ideas.
Every insurance agency needs to have a marketing budget in place to retain current clients and attract new ones. The general rule of thumb is to allocate about 3-5% of your company’s total income to your marketing budget. But this is just a rule of thumb, and your insurance agency may need to spend more or less than this. Make a list of your marketing costs and look at data to figure out the ideal budget and how to allocate it.