The news is constantly reporting about inflation and other economic pressures. You may be seeing the effects of higher premiums and limited capacity on your policyholders and carrier partners. But even during challenging economic times, your agency should continue its focus on its long-term goals. Read on to learn why marketing in a downturn can lead to success, even when it feels counterintuitive.
Why Marketing in a Downturn is Important
During tough economic times, consumers watch their spending more carefully. This should not be surprising — but how you respond may be. The good news is that insurance is a service most people and businesses continue to need, even during a recession. Since insurance is often mandated, it is not one of the first budget items that gets cut during an economic downturn.
But that doesn’t mean consumers can afford to spend more on premiums at renewal time. Your existing policyholders may look for ways to cut their insurance costs while still keeping their coverage. This could mean increasing their deductible or lowering their limits while still maintaining state minimum limits.
As an agent, your job is to help your policyholders understand how these coverage decisions will impact them and to help guide them to make the right choice for their needs. This means continuing to send marketing emails, sales offers, and renewal notices and working with your consumers to understand their needs.
Ways to Market for the Long-term
During an economic downturn, your marketing budget may be lower but focusing on your long-term strategy can lead you to success. Try these ideas for marketing during a downturn:
- Look for your biggest opportunity areas. Find the ways to make the most impact with your marketing dollars. This begins with an assessment of your current budget and results. Then you can decide where to focus and where to trim costs.
- Consider focusing on your main segment. Prioritizing where to spend your marketing dollars can be difficult. To make it easier, focus first on your most significant customer segment. Allocate your budget to that segment first before budgeting funds to less critical customer populations.
- Think about your long-term needs. Don’t just focus on your response to today’s economic position. Consider the long-term success of your agency and your client’s needs as the economy improves. Having a long-term strategic plan means you can align your marketing efforts with your goals even during downturns.
- Change your approach. What works during times of growth and abundance doesn’t always work in a recession. You have to think about the challenges your customers are facing and how to help meet their changing needs. Acknowledge times are tough and insurance costs are rising — having these honest conversations can go a long way toward building trust.
- Help your customers manage expectations. Your policyholders may see premium increases or may face non-renewals. Capacity is more challenging to get and costs have been on the rise. Your customers may need to pivot quickly and change insurers or be open to new deductibles, coverage levels, and retentions. You can help your customers to manage their expectations by talking about these realities transparently.
- Don’t forget the human in the equation. People react differently to stress. Some will respond by shutting down and tightening the budget dramatically, while others take a longer viewpoint and respond with more equilibrium. To be successful, you must appeal to all kinds of consumers while managing their expectations. Think about the psychology of your consumers to design your marketing plan during a downturn.
Consider Lead Generation Packages to Grow Your Agency
Another way to continue marketing in a downturn is through lead generation services. Purchase exclusive lead generation and nurturing services through the American Agents Alliance to grow your agency.
Become a member today and enjoy discounts on lead generation packages and other services to help build your business.
External Links:
- https://hbr.org/2009/04/how-to-market-in-a-downturn-2
- https://www.mckinsey.com/featured-insights/sustainable-inclusive-growth/chart-of-the-day/creeping-costs-of-coverage
- https://www.forbes.com/sites/forbesagencycouncil/2023/02/23/surviving-a-recession-with-a-strong-marketing-strategy/?sh=2f85d10136d9
