How Much Do Insurance Agencies Spend on Marketing?
Your marketing funds are likely not infinite, so you need to be strategic about how you manage those funds. As an insurance agency, how much should you spend on marketing? How can you be strategic about your marketing spend and your marketing impact?
Know Your Vision and Your Objectives
Before you begin marketing, make sure that you know your marketing objectives and consider how they tie into the greater vision for your business.
For instance, you may have an objective to build trust and retain clients over time. If this is a key marketing objective, your marketing will look different than if you were focused on developing a new client base.
Before you consider your marketing spend, always return to your vision and objectives to ensure that your spend is in alignment with your greater objectives.
Be Realistic About Your Marketing Budget
According to Medium, "almost all businesses plan to increase their investment in at least one digital marketing channel in the next year. Many small businesses may not have properly budgeted out their marketing strategy."
If you're new to developing a marketing budget for your digital marketing activities, what can you do to ensure that you're not overspending?
Get to know your customers and which marketing channels they are using. Understand their demographics, their challenges, and how to best move them through the sales funnel.
Spend the right amount. For many businesses, the marketing budget is between 3 to 5 percent of the business's total income. However, if your insurance agency is just getting established or venturing into new areas such as digital marketing, you may want to have a higher spend.
Consider the tools available. There are many free tools available such as MailChimp, which has a free program to begin and then allows you to upgrade later on. Think about where you can find free tools to do the marketing jobs that you have available and where you may need to pay to get the best quality marketing tool.
Gather data and review your plan. One key component of your marketing plan is to gather analytics and determine how you might do better in the future. For instance, if you discover that most of your customers are coming to you through your social media engagement, you might choose to place more resources into that area rather than focusing on developing ebooks.
Understanding Your Marketing ROI
How much should you spend on marketing? According to the Houston Chronicle, "a 2016 survey of 168 Chief Marketing Officers revealed that marketing budgets account for as much as 40 percent of a firm's budget... When shown as a percentage of overall revenue, the mean was 8 percent and the median was 5 percent."
However, your marketing ROI is even more important than the dollar amount that you spend on your business marketing. While many marketing tools don't require an investment of money in the tool itself, some do. All marketing tools require an investment of staff time as well.
You don't need to market in a certain way just because everyone else is doing it. Analyze how people hear about your business, look at online engagement levels, and determine whether an investment in marketing is worth your time and your money. It may be that social media is the wrong avenue for your demographic and they respond better to Google Ads and blogs. Go where the data leads you to optimize your ROI.
Are you ready to increase your connection with your clients? Talk with American Agents Alliance. Explore our many membership benefits, and see how our tools can help your business grow.