invisible part of agency marketing, The

Rough Notes, Aug 2003 by Jans, Michael

Part Two: How to use "smart math" to boost your agency marketing result

Editor's note: Part One of this series appeared in the May 2003 issue.

Math. Not my favorite subject. Not what I chose to do for a living. But counting money is fun. And counting leads and sales is a kick too.

I'm going to show you how-when you do the "right" kind of counting-to make your agency marketing and income shoot through the roof.

The good news is this. It's really simple arithmetic ... not fancy algorithms. And the better news is this: You can make "robots" do a lot of that counting for you. I'll show you how that's done, too.

First let's quickly review what we covered in Part One:

1. Marketing is a combination of persuasion ... and math.

2. You must "do your math" to get the most out of your marketing dollars.

3. At a minimum, you should be counting cost per lead, cost per sale and return on investment-per marketing event.

4. Proper counting will guide every element of your marketing decisions: to roll out, tweak, test or kill.

Let's take a peek at the kinds of things that insurance agents are measuring - and what that means to their business.

* Jerry Hendrickson of security Victor Insurance in Wyoming, Minnesota, is currently getting a 9 to 1 return on investment from a personal lines postcard. More important, he knows which leads come from his Yellow Pages ad and which ones come from his postcard campaign. If he didn't, he'd be quoting RT. Barnum: "I know that half my advertising works, I just don't know which half." Small businesses can't afford not to know "which half!"

* Mitch Sims, National Insurance Agency, Omaha, Nebraska, trimmed his health insurance Yellow Pages advertising in half, changed the ad copy - and got the same number of leads...and fewer tire-kickers. That means he slashed his expense in half and wasted less time with low quality leads. He was counting his numbers.

* John Mason, JN Mason Agency, Inc., Hancock, New York, runs at least three to five personal campaigns at once. He uses e-mail, Yellow Pages, fax, direct mail, a Web site and newspaper inserts. One ad routinely pulls about 200 leads. If he weren't tracking his numbers, he'd never be able to prepare his staff for the flood of phone calls.

* Patrick Giannini, Association Agency, Ridgefield, New Jersey, claims, "... we send out the 250 cards and we're making $2,000, and if we sell two a week we're making closer to $4,000." That's between $100,000 and $200,000 a year from a postcard campaign to a small commercial lines niche. It was his fourth tested postcard that delivered the best results. Not the first. Not the second. Not the third. (So you can see, if he weren't counting, he'd be stuck with his older, weaker results.)

* John Baccarella, Baccarella Insurance, Inc., Riverside, California, generates $60,000-$70,000 in new commission income every month - from a combination of direct mail and Internet advertising. He knows precisely how much he pays per lead with his search engine advertising-using Overture and other pay-per-click search engines. For the search category "contractors liability insurance," the search engines can measure the results of more than 128,000 hits. John consistently ranks first in the number of hits for this category. In the last three years, his agency has grown from $4 million in premiums to $23 million. John is counting.

* At a slightly reduced cost, Shaun Irwin, from Wyoming, Minnesota, consistently ranks third in the number of hits for the contractors category as measured by the search engines. Shaun has six commercial lines niches for which he counts his pay-per-click results.

Making "smart math" easy

You have two basic ways to count your numbers: manually or automatically.

When you have the choice, let the robot do the job! (I'll show you how in a moment.)

But sometimes, we have to do the job manually. For example, we send all of our CSR clients a sticker for their desk that says, "May I ask how you found out about us?"

That single sentence is worth thousands to you-and should be mandatory behavior for everyone who takes inbound calls from prospects. Some agents use a simple "tick sheet" - then transfer it to a spreadsheet to enable more accurate measurement. Simple is fine-and much better than nothing!

Remember this: If you're testing more than one of any marketing event-two postcards, for example - you must distinguish between the two postcards. Do that with a simple "priority code" in the corner of the card. (Now you see why the rep at the catalogue company asks you to read the number on the mailing label. They're doing their math!)

Let the robots do the hard work!

Some marketing media "do their own math for you."

E-mail marketing. For example, last year I ran an e-mail campaign for a teleconference marketing call.

* The automatic counter tracked everyone who responded to my campaign - and summarized it in a bar chart for me.

* I ran the campaign twice, one week apart, to two different lists. I got roughly 70 leads from one list, 90 from the other. Now you can see that the cost per lead can easily be computed by dividing the cost for the list by the number of leads. Easy math.