Insurance Articles – DieWolf.com

As part of your marketing strategy do you send complete strangers a letter offering a free insurance review? What’s the objective of these letters? To get an appointment and then try to beat the other guys price, right? Is that who you really want to attract? Do you really want to fill your business with price shoppers? If you want insurance sales success you want to avoid price shoppers like an unwanted virus. Price shoppers don’t provide a strong foundation to build your business on, so don’t waste your marketing efforts trying to attract them.

You can’t build a successful long-term business on a foundation of price shoppers. Price shoppers are the most disloyal, time consuming, low value group of clients you could ever hope to have. It doesn’t take very many price buyers in your business before you don’t have time to go out and sell because they **** up all your time. Price shoppers also have a bad habit of not paying their premiums, so you get to chase them down trying to get them to pay their bills. They drive off any good customers you might have with all their complaining. In all likelihood you’ve invested a ton of energy into these people, and they won’t buy from you ever again, and they’ll drop you as soon as your competition can undercut you. It just doesn’t even make sense to position your business in a way that attracts price shoppers. It makes even less sense to spend your precious marketing dollars trying to attract them.

Yes, you can help good people to save money and you can help them to do that without attracting price shoppers. When you offer a free insurance review your placing your focus on attracting the wrong prospects. When you send your letter your letter is based on the premise of having a product and trying to find someone to sell it to. People don’t like to buy products, but they love to buy results. Get yourself out of the product sales business. You are in the business of helping people to get the outcome you know they want because they’ve told you they want that outcome.

Helping people to get what they want the way they want it is the foundation you want to use to create your marketing messages. When you do that you provide value. When you provide value you’re in a position to attract value shoppers. Value shoppers are critical to your long term insurance sales success. Because value shoppers are very loyal. Value shoppers take up very little time. That means you have more time to build a large client base. Value shoppers are far more likely to provide you with qualified prospects making it even easier for you to build a successful business. Value shoppers are pretty much the opposite of price shoppers in their potential to help you to attract the kind of clients you need to have success.

Start right with your marketing strategies and messages to end right. It just doesn’t make good sense to try to start your business by positioning yourself for price shoppers. Make the effort now to position yourself to attract value shoppers so you can enjoy greater insurance sales success.

Health Insurance is more of a necessity than a luxury with the kind of health issues that we are exposed to these days. Health is becoming such a concern that every once attention has been dragged to the possibility of big fat medical bills. The necessity of regular medical check ups and precautionary measures has increased drastically in the last few decades. Selling health insurance seems to be easy, as the situation seem to favor however, the reality is a little different. Like any other insurance, selling is not a child’s play. Especially, when there is a huge financial crisis and people are more worried about their material health rather than physical.

Health insurance leads could be helpful getting to a step closer to the people who are really looking forward to purchase the insurance. By approaching the these potential buyers you are not only saving yourself from the frustration of endless “No’s” in a row but at the same time would help keeping your boss happy as well.

In America alone you would find about 80% of the people with health insurances. Either they have individual health policies, or they are covered under the family health umbrella. Whatever be the case in the modern day world health insurance is becoming more and more indispensable. That means that there are people out there willing to purchase these insurances. If you are able to approach them before the others could you would have a better chance of cracking the sale, as at the end of the day no matter how big the pool is – it is limited to get exhausted. Hence, before that happens by using the leads you could get a better share in the pie of sales than any of your competitors.

The health insurance leads could be picked from -

• Form the internet. Either free of cost or after making a nominal payment.
• The telemarketing leads which are generated by the call center executives. There are companies selling such telemarketing health insurance leads. These are relatively better in terms of information and reliability.
• Self created departments or systems of creating or generation leads.

No matter form where you pick he leads but it should be closed into a health insurance sale.

What are the chances of new insurance agent success becoming a reality? Intense analysis of licensed Department Insurance agents records conclude that only 6% of agents survive slightly over 4.3 years. Examine the facts, and logical explanations why insurance sales agent retention and success stories are so grim.

Dismiss many of the misconceptions of recruiting new insurance agents. There are over 1,500,000 health and life insurance agents currently licensed by insurance departments within the United States In my evaluation, this means an unnecessary surplus of over a half million agents. Countless new life and health insurance sales agents are either poorly trained, have an insufficient number of prospective clients, or should have never been hired to begin with. So if 550,000 agent trainees were fired today, the life and health insurance agent system would be stronger.

Some agencies place newspaper ads, and others go so far as using college campus job fair recruiting methods to find new agents to hire. Both of these methods when analyzed, show almost identical results. Those results are that 85% of agents will starve their way out of insurance sales within the first 18 months. In insurance sales you have two types of agents, those who can fill out an order application and those that can actually solicit and sell life and health insurance products.

Here lies at least 50% of the blame for agents dropping like flies. The recruiters hire agents who are unable to go out on their own and make a sale.. Even though almost every applicant can pass an interview of prepared interviewer questions, this in itself does not guarantee any measure of success. Look at the person who the insurance agency promoted to do prospective hiring. In most cases this is a newly appointed sales manager with under 4 years experience. Sure, he is fairly good at selling, but just because he can sell, it does not mean he can successfully recruit. Both the sales manager and college campus recruiter work hard to highly pump the prospective agent up with inflated dream visions of easy success and a lifetime steady insurance career.

Another 25% of non survival is a result of insurance agent recruiters for providing false concepts, and poor training. New licensed sales agents anticipate easily obtaining incomes exceeding $40,000 to $70,000. My studies show less than 7% of these rookies ever obtain that level. In fact, if most insurance agencies did not money subsidize their newer agents, the income figure for a new insurance agent would be under $20,000. When one agent leaves, another will be quickly licensed to take his place. The departing rookie has written policies on a few friends, neighbors, and outsiders, so when these policies renew. the insurance company collects all the premiums without paying any acquisition costs. I call this concept putting meat in the insurance company freezer.

Job fair recruiters sent to college campuses usually do the worst job. The college recruiter pitches a memorized and rehearsed script to college seniors, exalting how entering the insurance professional is more prosperous than other qualified fields. Remember the college recruiter usually gets a bonus for each recruit. If the prospective agent would had been screened with numerous background questions, survival chances could have been quickly predetermined.

How do you predetermine a success chance factor? Well first realize the agent might already be financially in debt, and hanging on to survive, living from paycheck to paycheck. You must start with agents that possess sales ability and are self determined to quickly become financially strong enough to survive. This is fine if the new college grad comes from a wealthy family background. However, in today’s world, most college graduates are not in this category. Their background is often middle class, with parents living in a middle class neighborhood, earning a middle class income. The new college grad, now an insurance agent, often took out student aid loans. These need to be paid back so this agent requires a higher income just to survive.

Why are the odds so highly against this agent? The career agency is usually located in an swank, suburban area of a major city where the average mean family incomes are the highest. in the state. The targeted customer for these agencies are high income individuals and small successful businesses. 90% of the limited training is spent on target marketing to these prime clients exclusively. The large agency however only contains a few experienced insurance professionals earning over $70,000 a year.

During the first 4 years of almost any salesperson’s career there is an existing comfort zone almost impossible to break. In other words, the salesperson is most comfortable talking to and attempting to sell prospective clients in an environment or income level that matches the agent. The career insurance agency however wants big premiums, and tries to train career insurance agents to sell large policies to prominent people. Upon failure to make sales, the blame comes down to the agent for not trying or working hard enough. The agency should have started working a new agent on a $40,000 class of clientele while gradually raising the level. A career agent then is able to work upwards. The reward is being one of the few 6 out of a hundred insurance sellers surviving the first 4 years.

To start an insurance agency you will need to decide on going independent or being a captive agency. Some of the best known captives include Farmers, Nationwide and Allstate. Captives sell exclusively, or mostly, one brand of insurance. There are advantages and disadvantages of each so it is advisable to investigate both. Many states require an insurance company to sponsor your license application, so selecting a company is a good place to start. A property and casualty license is generally the minimum to start and allows you to sell auto and homeowners type policies (Laws vary by state). It is advisable to get additional licenses such as accident and health, and possibly investment type licenses (For example Series 6 and 63).

For either choice many agents work part time first to get licensing, training, experience, and begin building a client base. If you have your own business your income will probably be straight commission. Normally you are paid for the sale of each policy and again every time of renewal. In my area 20 to 30 policies per month is considered good for new agents. This might pay you $2,000 to $3,000 depending on the type of sales. After you pay your expenses the income can be quite small when starting. As your book of business increases your renewal income will greatly increase your income.

An option to building an agency from scratch is to buy an existing agency. Typically you will pay 2 or more times annual earnings. For example, if an agency has 1,000 policies that earn $100,000 annually in renewals, you will probably pay $200,000 or more. It is possible to finance an agencies purchase. This will generally require 10% or more for a down payment. SBA is the most common lender for this kind of loan. My company, Texas Capital Mortgage 281-537-7800, can help with business financing for Texas residents. (I have found that the mortgage business is a good compliment to the insurance business.)

Obviously you need a lot more information to start an agency. I suggest spending a lot of time researching the business before jumping in. Read some books about the business. The larger companies have district offices where they can tell you about employment with them. The agent you buy your insurance from may be willing to share his experience with you. There is also a lot of information available online.

Insurance is a great business but don’t underestimate the difficulty! After starting with Farmers full time, the first 1/2 year I lost 50K (much of this was start up expence), the next year I lost 20K, and this year I should make some profit. Some agents will do better or worse but this could give you some idea.

Each day, more and more Insurance Agents are leaving the captive corporate world to venture into the realm of independent insurance agent. Rather than being locked into selling one major insurance carrier’s branded product line, they opt to offer a larger variety of policies, services and costs; coinciding with the demand of consumers wanting to have choices and options at competitive prices.

As we are well aware, this is no longer a “seller’s market”, but an “informed buyer’s”. People, in general, are armed with more information than ever before. So, how do you, the independent insurance agent, stand out from the other 100′s of agents in your city? What marketing avenues are available to you so that you capture the prospective buyer’s attention and convert them into a prospect and ultimately a long-term client? And which ones work?

Regardless of your target audience, whether you have niched your focus to be product specific, or if you are targeting a certain population segment; you need to investigate the various forms of advertising available to you, the costs of such programs and the pros and cons.

Below is a breakdown of the most commonly used forms of advertising for the independent insurance agency, and the pros and cons of each.

Television Advertising


As the average American spends more time in front of the television, it should be no surprise that this is one of the most sought after forms of marketing available.

Pros:

Ability to reach a larger and more diverse segment of the insurance seeking population
You can specify time of day and network, reaching your intended audience easier
Since most consumers are engaged by a combination of movement, color, what they see and what they hear, this gives most businesses a platform to achieve full sensory contact
Gives a business instant credibility and prestige


Cons:

Cost for the commercial air time and/or multiple runs
Cost for hiring a marketing agency to lay-out and film your insurance commercial
Consumer expectation – no longer are we impressed with someone reading off a teleprompt, they want to be entertained
Competition for the consumer’s attention
Popularity of digital recorders has increased, giving consumers the ability to fast-forward through commercials when watching their favorite shows


Many experts would agree that if you have the extra capital in your marketing budget to incorporate television into your advertising that you should. However, it is important that you research different advertising firms to help you explore your options with regards to creating your on-air advertisement, the best way to target your audience and keep within your planned budget.

Newspaper advertising and local weekly shoppers


With regards to print advertisements, some independent agents turn to local newspapers and weekly shoppers to advertise their agencies. Since many households either subscribe to at least one newspaper, or pick them up at their local newsstands, it is a fast and simple way to gain recognition by consumers.

Pros:

Ability to reach more than one target audience by placing various advertisements in the different sections of a newspaper
You have the choice of large or small circulation papers to advertise your insurance agency
Consumers who turn to the newspapers and weekly shoppers are looking for advertisers who offer deals or bargains
Multiple advertisement ad sizes to correspond with various budgets


Cons:

Newspapers and weekly shoppers are usually read once and discarded
Smaller advertisements have a more difficult time standing out when placed next to a larger ad
Quality of the print may distort images and photos in a way that can hurt your marketing rather than help
Ads, regardless of size, have to compete for the reader’s attention


Like television advertising, it would be prudent to consult with a professional marketing firm, preferably one that specializes in insurance marketing, to help you design an advertisement that best captures your targeted audience’s attention. The smaller the ad space the less detailed and complicated the ad should be.

Also keep in mind the days the most sought after papers and weekly shoppers are printed. The rates for a large advertisement over the weekend will be greater than the same sized ad featured all week long.

Billboards and Signs


While most forms of outdoor advertising are contained within billboards and large signage, some independent agencies have broadened the term to include park benches, posters and seat rails at public transit stops. This form of marketing has become a popular, less costly way, when compared with television and print advertising, to reach a larger audience in major metropolitan areas.

Pros:

Potential clients cannot simply discard or “turn off” outdoor advertising
Name recognition is higher with those consumers who walk or drive the same route each day
Billboards and signs vary in price due to size and location making it is easier to find one in your budget


Cons:

More often than not, outdoor advertisements do not fully engage a consumer’s attention for more than a few seconds
Advertisements have to be simple and interesting enough for the consumer to remember
Outdoor advertisements are usually contracted for a longer period of time than most independent agencies had anticipated securing them for
Posters and bench signs at public transit stops work well in major metropolitan areas where lower, middle and upper class alike share the same transportation systems, however, not as effective in areas where public transportation is not as common


If you feel various forms of outdoor advertising would be a compliment to your business and marketing plan, consider placement wisely. Consult many firms for input and advice on the best way to stretch your marketing dollar and how they can help you create eye-catching and simple designs for your sign.

Phone Book Directories


Since exposure to the advertisements in phone book directories is voluntary, meaning consumers actually turn to the phone book for its ads, this form of marketing for independent insurance agencies has become an industry standard.

Pros:

Certain targeted audiences utilize the phone book regularly to find businesses in their area
Many phone books also have an online directory giving agencies a more broad exposure
You can tailor your exposure to cover a large metropolitan area, or just the city you work in
Traditionally, consumers will keep a phone book versus discarding it like a newspaper


Cons:

Cost – as more consumers turn to the internet, the cost for print ads in the phone book has increased to cover profit loss
Marketing ineffectiveness – with so many insurance agencies buying ads, it becomes more difficult to capture the consumer’s attention, and once again, stand out from the 100′s of other agents in your market
There are so many phone books in which to advertise, which one do you choose to feature your agency


As with any form of advertising, be sure to read all the features and benefits that come with your paid advertisement. Does it include a featured ad online, or is that separate? What is the target area or audience of the phone book you are looking at? Is the cost monthly, quarterly or annual? Is there an automatic renewal clause or will you have the option of not renewing your contract? Where will your advertisement be placed in comparison to the other featured ads? Will someone employed by the phone book assist you with an eye catching advertisement, or do you have to hire a marketing agency to do that for you, and what is the cost?

Internet Advertising


Roughly 90% of all the households across the United States have access to the internet either at home, at work or at school; making advertising on the internet the fastest growing marketing medium for independent insurance agents. That household percentage goes even higher for those families with a combined income of $100k or more. However, internet advertising gaining its strength only in the last decade or so, there is still a lot an independent agent would need to research, as with any form of advertising, before making a financial commitment.

Pros:

Cost- you can spend much or as little as your budget allows
Levels the playing field – the internet gives the independent agent a chance to compete with the large insurance carriers with regards to search engine placement
Whether a web site, a PDF brochure, an affiliated network or a video; any and all forms of advertising can be featured and found on the internet
Advertisement exposure is voluntary. Only the websites relevant to a consumer’s online search will pull up for them to look at. Someone searching for insurance agents in their area are more often than not, looking for an agent to speak with


Cons:

People expect to be educated or informed by an agent’s personal website – having out-dated information or poor graphics can actually hurt your credibility
The ever changing internet – each of the major search engines change what they search for on websites constantly with regards to how well they rank. Staying on top of these changes can be very time consuming or expensive if you pay a firm to do this for you.
Fear of identity theft – consumers are becoming skeptical of entering their personal contact information online for fear they will have their personal information stolen or sold to telemarketing companies and be subject to unwanted emails or phone calls


There are so many options and services available to the independent insurance agent to effectively market themselves and attract more leads. The form of advertising you choose will depend largely on the audience you intend to target, the area in which you do business, and ultimately your budget. Be sure to ask questions. Know what you are getting and what you are not with whatever forms of marketing you decide to use.