Determining a marketing budget can be frustrating and confusing. Are your marketing dollars being spent in the right areas? How do you know if what you’re doing is working? Are you spending enough?
The U.S. Small Business Administration recommends spending 7 to 8 percent of your gross revenue for marketing and advertising if you’re doing less than $5 million a year in sales and your net profit margin—after all expenses—is in the 10 percent to 12 percent range. For example, if your agency’s revenue is $500,000 and you spend 8 percent, it comes out to be around $40,000 per year or $3,333 dollars a month. This investment can be split between:
- Your website or blog
- SEO (search engine optimization)
- Direct mail or email blasts
- Sales collateral
- Advertising in local publications or Yellow Pages
- Promotional events
Building Your Foundation
Some years may require more spending to invest in foundational infrastructure for all of your day-to-day marketing activities. For example, an up-to-date, performance-based website is key to a solid marketing foundation. Why? Your website is available for both showcasing and selling your services 24/7. The upfront investment can pay off for years to come.
To be successful, you need to track your website’s performance. Several ways to do this are:
- Measure the number of visitors from your geographic area each quarter.
- Measure the number of Get A Quote submissions your site generates each month.
- Make a point of asking customers where they got the agency’s phone number when they call in. There’s a field in Jenesis Software for “Source of Referral”. Making a point to log that information can be very helpful as a way of tracking your ad dollars.
- Add a live chat feature to your website and talk to customers in real-time, or collect email and phone numbers from chat while you’re away.
- Add widgets to your site from carriers that allow visitors to get a quote without having to contact you at all.
- Target specific keywords and measure the traffic they generate from search engines.
What Types of Marketing Work Best
In a recent survey of 2,500 digital marketers, respondents reported on what marketing activities generated the best ROI. Email marketing led the way with the highest percentage of Excellent and Good ROI results reported. Website and social media marketing followed closely behind in the survey.
Invest in People With Skills
To grow and thrive, agencies need to spend on advertising and marketing, but just spending a certain amount of cash is not the answer. Many agents subscribe to “do it yourself” email marketing platforms or buy publishing software, but without the time or knowledge to use them. Agencies need to invest in service providers with the right skillsets or pay to train their staff.
Get Advice and Dollars From Organizations
Insurance trade organizations provide marketing advice and will even pay a portion of your marketing costs if you enroll and follow their guidelines. Trusted Choice, for example, will reimburse a portion of expenses incurred by Trusted Choice agencies through their Marketing Reimbursement Program (MRP). They provide advice and reimbursement in cobranded advertising and marketing materials; and in creating or updating a digital presence to include the Trusted Choice logo. Here’s a link to the Marketing Reimbursement Program Guidelines.
To get the most of their marketing budget, agencies need to have a plan in place for measuring their spending and tracking the results. They also need to maintain the flexibility to adjust their spending to promote new products or services. Above all, they need to have patience and follow through on all marketing efforts. It’s not always possible to know the impact of your efforts right away, but as you plan and implement your plan, you’ll be able to fine tune your budget and focus on the types of sales and marketing that are right for your agency.
About Phil Price
Prior to joining Jenesis as a digital marketing and website design specialist, Phil was President/Creative Director at NY Design Firm Click 3X and held management and creative positions at ABC Television, The NY Yankee Baseball Network, The Tar Heel Sports Network and more.