TECHSURANCE Marketing REVOLUTION

Marketing Strategies Used by Top Performing Insurance Agencies

THE

The Techsurance Marketing Revolution | Page 2

EXECUTIVE SUMMARY

The slingshot in the commoditized insurance world

Consumers are shopping online for insurance in record numbers and obtaining multiple quotes, according to a 2015 comScore report.

This isn’t great news for smaller independents, or even captive agents that are competing with corporate call centers and what seems like endless advertising campaigns that push the “get what’s cheapest” message.

But therein lies your slingshot: in our world of price wars, the giants can’t always fit through the good-customer-service door quickly enough, and many give up too easily.

This new research from ITC and Velocify sheds light on how top performing insurance agencies, regardless of size or type, use different marketing strategies and technologies to compete and grow in a commoditized insurance world.

Today’s Insurance Shoppers

SHOP ONLINE 71% of consumers shopping for insurance used the Internet to obtain a quote.

2-3 QUOTES 62% of online insurance shoppers obtained two or three quotes.

LOWER PRICE 66% of online insurance shoppers were looking for a lower price.

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ABOUT THE AUTHOR

Comprehensive survey of 1,000+ insurance agencies

More than 1,000 insurance agencies completed a comprehensive, 20-question survey to better understand the state of technology and its effectiveness in the insurance market. The agencies in our study included direct-to-consumer carriers, insurance carriers that use captive agents for selling, and independent agencies, who generally sell products from many carriers.

A previous study by ITC and Velocify looked more broadly at six top technologies commonly used among insurance agencies and the impact of those technologies on revenue and growth. This report focuses specifically on marketing automation technologies, which enable agencies to market and nurture prospects via outbound and drip email campaigns. More sophisticated marketing automation solutions can track a prospect’s digital buying behavior and signal when they may be ready for a sales call.

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KEY FINDINGS

High-growth agencies invest in lead gen and marketing automation

Insurance agencies with higher marketing spend are more likely to experience significant revenue growth, regardless of agency type or size.

Agencies that invest in paid marketing channels have a tendency to grow faster than agencies that rely heavily on their existing book of business.

Agencies that sell a higher percentage of non-standard auto and life insurance policies, tend to spend more on marketing than those selling a higher percentage of commercial insurance policies.

Agencies that generate more leads are more likely to use marketing automation to manage those leads.

Marketing automation users sell more policies per producer and more policies per household, on average.

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MARKETING STRATEGIES

Spend money to make money

In the insurance industry, revenue growth directly ties to marketing spend, regardless of size or type of agency.

Agencies that spend less than 5% of their revenue on marketing are almost three times more likely to experience flat revenues than they are to experience significant revenue growth (more than 20% growth year-over-year).

On the other hand, agencies that spend 15% or more of their revenue on marketing are more likely to have significant growth than they are to have flat revenues.

How Marketing Spend Impacts Revenue Growth

>15%11-15%5-10%< 5%

25.0%

30.0%

35.0%

20.0%

15.0%

10.0%

5.0%

0.0%

Percentage of revenue spent on marketing

Flat revenue (-5% to +5% change)

Perc

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f age

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Significant revenue increase (more than 20%)

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MARKETING STRATEGIES

Find new clients with the right marketing mix

The most successful insurance agencies don’t rely on their existing book of business alone. In order to expand, these agencies are investing in different ways to find new clients.

Lower Marketing Spend Agencies that spend less on marketing rely more heavily on referrals and self-generated opportunities because those lead sources have little to no costs associated with them. However, these agencies don’t have control over their lead volume, because they typically can’t pay more to generate more.

Greater Marketing SpendAgencies with larger marketing budgets saw a higher percentage of their prospects come from paid marketing channels. This doesn’t necessarily mean that referrals and self-gen decrease. In most cases, the total number of leads increases. The top paid sources agencies invest in include:

Lead Providers

Traditional Media/Offline Advertising

Direct Mail

How Marketing Budget Impacts Marketing Mix

>15%11-15%5-10%< 5%

50.0%

40.0%

30.0%

20.0%

10.0%

0.0%

Percentage of revenue spent on marketing

Lead Providers

Perc

enta

ge o

f pro

spec

ts

Traditional Media/O�ine Advertising

Direct Mail

Referrals

Self-Generated

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MARKETING STRATEGIES

Where marketing spend has a greater impact

Agencies that spend more than 15% of their revenue on marketing tend to generate two times more revenue from non-standard auto insurance and three times more revenue from life insurance than they do from commercial insurance.

Agencies selling more commercial insurance typically sell more to other businesses and are therefore more dependent on referrals and self-generated opportunities, which don’t cost as much to generate.

Agencies selling more non-standard auto and life insurance policies usually face more competition because they usually sell to consumers, so they typically have to spend more to generate new business.

Marketing Spend Across Insurance Types

>15%11-15%5-10%< 5%

25.0%

20.0%

15.0%

10.0%

5.0%

0.0%

Percentage of revenue spent on marketing

Perc

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f rev

enue

from

insu

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pes

Non-Standard Auto

Life

Commercial

30.0%

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MARKETING AUTOMATION

Leverage technology to manage and optimize marketing spend

The first half of this report focused on marketing strategies and lead gen programs that drive higher revenue growth. As we shift focus to technology, we see a clear correlation between the two.

The survey found that agencies that spend more on marketing are more likely to use a marketing automation solution. This is likely because agencies that spend more on marketing programs need a better way to manage and optimize their efforts. When lead volume grows to a point where it becomes unmanageable, a marketing automation system is essential for success.

Marketing Automation Usage Compared to Marketing Spend

>15%11-15%5-10%< 5%

50.0%

40.0%

30.0%

20.0%

10.0%

0.0%

Percentage of revenue spent on marketing

Perc

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ge o

f age

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s us

ing

mar

ketin

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atio

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60.0%

70.0%

80.0%

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MARKETING AUTOMATION

More policies per household

Just by using a marketing automation solution, an agency can sell 10% more policies per household.

Marketing automation is likely helping these agencies more effectively cross-sell into their existing customer base, enabling easy look ups on auto/no home, for example. With this information, agencies can run email campaigns to educate and nurture customers, staying top of mind until the time is right for sales to reengage.

It’s also worth noting the impact of lead management, which is the number one driver of policies sold per household at 13%. The usage of both solutions ensures agencies are nurturing customers to a buying stage utilizing marketing automation, and then, leveraging lead management to increase their effectiveness in contacting, quoting, and selling additional policies to their customer base.

Boosts in Policies Sold per Household

LeadMangement

10.0%

8.0%

6.0%

4.0%

2.0%

0.0%

12.0%

14.0%

CRM MarketingAutomation

AgencyManagement

AutomatedDialer

ComparitiveRater

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MARKETING AUTOMATION

More policies per producer

Similarly, using a marketing automation solution, an agency can sell almost 20% more policies per producer.

Marketing automation ensures agencies more effectively nurture prospects and stay top of mind with X-Date campaigns, holiday greetings, and more.

Also worth noting, agencies using lead management sold 43% more policies per producer, and automated dialers had an equally impactful result. In the competitive online lead marketplace, utilizing lead management and dialing technology is essential to compete and optimize marketing spend. These tools ensure speed-to-contact within seconds on competitive internet leads and productivity gains that offer a major competitive advantage.

According to a previous study, these three software categories are also the most underutilized, suggesting they offer agencies the greatest competitive advantage.

Boosts in Policies Sold per Producer

Lead Mangement

25.0%

20.0%

15.0%

10.0%

5.0%

0.0%

30.0%

35.0%

AutomatedDialer

ComparitiveRater

AgencyManagement

Marketing Automation

CRM

40.0%

45.0%

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CAUTION!There can be a downside to higher marketing spend

The more agencies spend on marketing, the lower their average retention rate. So be careful not to focus so heavily on attracting new clients that you neglect existing clients.

There is a silver lining and an opportunity here, however. If you invest heavily in marketing and focus on retention, you have the greatest opportunity for growth. Marketing automation can help you stay top of mind with existing clients when it comes time for renewal or to purchase additional insurance products.

Falling Retention Rates

85.0%

84.0%

83.0%

82.0%

81.0%

80.0%

Percentage of revenue spent on marketing

Ave

rage

rete

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te

86.0%

>15%11-15%5-10%< 5%

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SUMMARY

Invest in marketing and technology, and focus on retention for greatest growth opportunity

In a commoditized insurance world, there is opportunity for agencies of all sizes to grow and thrive. Agencies that diversify their marketing efforts to attract new prospects and that focus on retention and cross-sell have the greatest opportunity for growth.

Technology is essential to help you maintain good customer service at scale. Marketing automation tools can help you market and nurture prospects and existing clients so they feel the love all year long, not just when it comes time to write a check.

Here are a few tactics you can leverage to stay top of mind, sell more policies, and get more out of your marketing investments:

Send birthday and holiday emails

Create campaigns to market to prospect and customer X-Dates

Encourage prospects and customers to follow you on social, and update your social pages with useful news and information about insurance products and services

Utilize referral rewards programs

Run cross-sell campaigns - auto / no home, home / no life, etc.

B2B/B2C – convert your personal customers into commercial customers, and commercial customers into personal customers

Run “We want you back!” campaigns for canceled or expired customers

Get Started Today!

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Call: 888.843.1777Email: sales@velocify.comWeb: velocify.comBlog: velocify.com/blog VELOCIFY.COM

Velocify is a market-leading provider of cloud-based intelligent sales software, designed for high-velocity sales environments. Velocify helps sales teams keep pace with the speed of opportunity and increase revenue by driving rapid lead response, increased selling discipline, improved productivity, and actionable selling insights. The company has helped more than 1,500 companies across a variety of industries improve customer acquisition practices and sales performance. Velocify was recently recognized as one of the fastest growing companies in North America by Deloitte and a Best Place to Work by the Los Angeles Business Journal. For more information, please visit velocify.com or follow the company on Twitter @Velocify.

Insurance Technologies Corporation (ITC), founded in 1983, is a leading provider of marketing, rating and management software and services to the insurance industry, including independent agents and insurance carriers. Headquartered in Carrollton, Texas, ITC helps its customers across the United States grow their businesses and become more efficient through the philosophy of providing quality software and services. Currently, ITC serves more than 200 insurance companies and more than 6,000 agencies. For more information, visit GetITC.com or follow ITC on Twitter @InsTechCorp.