How to Create a Marketing Plan for a New Insurance Agency
Launching a new insurance agency can be many things, but mainly exciting and overwhelming. Exciting—because trying new things and creating a business can help stretch our creative muscles and has so much potential for growth and change in our personal lives and finances. Overwhelming—because it takes a solid marketing plan to succeed—that’s more than just throwing up a website.
So, creating an insurance agency is no different than any other business; it will require a strong marketing (or advertising) plan that draws in customers, makes them feel seen and heard, and leaves them satisfied with the good or service you have provided. Below, we’ll cover some things you should keep in mind to create a good marketing plan for your new insurance agency, as well as how to maintain that plan and adjust—as needed—along the way.
Research Your Customers
Before you write out your marketing plan, take the time to do your research. The two areas you definitely want to focus your research on are your competitors and your target audience/customer base.
The first and most important part of your preparation for creating a marketing plan is researching your target audience or your customer base in the area where you are planning to start your business.
Getting to know your customers is how you will discover the best way to advertise to them and what kinds of things appeal to them. For example, understand whether they prefer quick and independent service over the internet or more personal face-to-face service. Some demographics you should definitely look into while doing your research are:
Age: No matter the age of your target base, you should treat them with respect and listen to them and their desires carefully. However, respect will look different across generations. For example, the baby boomer generation tends to prefer face-to-face communication, whereas Millennials and Gen Zs prefer a quicker and streamlined approach that they can handle themselves on a well-organized website.
Location: Where are you planning to set up and grow your agency? The desires and needs of people who live in large cities are different from those who live in more rural parts of the country. The culture and the needs that come with it vary from the east coast to the Midwest to the west coast.
Gender: This is important to gauge because many agencies have made the mistake of stereotyping across genders to sell a product. If you know ahead of time, you can be more intentional about treating your customers simply as people instead of patronizing them based on gender stereotypes.
Income: If you are growing your agency in an area where the average income is above average, your consumers are likely going to be more willing to pay more for extra benefits. The potential for growing your goods and services is more flexible. Whereas, if the area has a lower average income, they will be looking for a lower price, and you will need to market accordingly.
Education level: Varying education levels means varying knowledge about insurance, its nuances, and how you will market it.
Marital and/or family status: Someone who is married and/or has a family will be more likely to respond and invest in insurance that will provide them and their families more security.
Occupation: Similar to education level, people who work in one area of the job sector may have more knowledge about insurance and will require a different marketing strategy to reach them than people who work in a different field may need.
Ethnicity: Desires, needs, and values vary across ethnicities. By finding out these aspects of the dominant ethnicity of the area you are working in, you may be able to tap into another market that you had not considered before.
Researching your customer base beforehand can help you figure out what they want and need so you don’t have to learn as much by trial and error and money out of your own pocket.
Additionally, it may help you realize that you may need to change your original idea for how you were planning to market your insurance agency. Or, it could help you realize that your goal is to have a certain type of customer and that you should build your agency elsewhere.
Research Your Competitors
It is important to know your competition to identify their weak areas, their strong areas, the type of advertising that works for them, and how to take advantage of newer advertising tools such as social media.
Knowing your competitors can also give you an advantage in that it guides you in how to make yourself stand out—what you can offer that other agencies do not—anything from more personalized customer service and longer hours of availability to something that may not be readily apparent until you know what others offer.
When it comes to your competitors, there are two main kinds, and both are important to identify and research to help you identify your own goals:
Direct competitors: Direct competitors are businesses that offer the same services for the same ultimate goal and with the same target audience. For example, if you want to sell car insurance in a large city, then a direct competitor would be an agency that also provides car insurance in that same city.
Indirect competitors: An indirect competitor is a competitor that sells to the same customer base but offers a different product. For example, if you want to sell car insurance in a large city, then an indirect competitor might sell rental insurance in a large city.
Researching indirect competitors may seem kind of pointless. After all, you are offering a completely different product. However, seeing the tactics they use to advertise can help you better read your target customer base and the kinds of advertisements and interactions that work the best to draw in your target demographic.
How to Research Competitors
Now that you know how important it is to research your competitors, the next step is actually doing it. This actually involves six steps, which are as follows:
Figure Out Who Your Competitors Are
You can either conduct a Google search with the type of insurance you plan to market or use websites such as crunchbase.com or producthunt.com that are specifically used for looking up companies with a specific product and target audience.
Track Their Presence Online
The internet has become a major marketing tool. Try to approach your competitor from the perspective of the customer. Go to their website and look around. You can gain a lot of valuable information about whether their website is organized, easy to navigate, and whether the prices are upfront.
Check to see if they have any social media pages—such as Facebook, Instagram, or Twitter—how they market their services on those platforms, and how much engagement they receive. Keep in mind that someone simply liking their posts is not as indicative of their level of marketing success as the number of people who share their page or posts.
Become a “Customer”
Follow their social media accounts, read their blogs, sign up for their email list. This is an excellent way to not only see what they are offering and how they are offering it, but you will get a taste of their customer service and whether you should emulate it within your agency or not.
Note Their Strengths and Weaknesses
This is the part where you get well acquainted with writing things down. Create spreadsheets with the names of the companies you have researched and the strengths and weaknesses you have discovered in their marketing tactics, in addition to their competitive advantages—what they offer that other insurance agencies don’t.
It is best to create and add to these spreadsheets as you do your research instead of waiting until later. That way you won’t forget any important details.
Read Customer Reviews
Read customer reviews from various sources, including their social media pages, their blog posts, and Google. This is another great way to get a read on their customer service, what they do that their customers like, and what they do their customers don’t like so that you can tailor your own agency.
Perform a SWOT Analysis
Before you figure out what you want your insurance agency to accomplish, it is important to perform a SWOT analysis, which requires you to look inward at your company and the current insurance market.
Assessing Your Strengths and Weaknesses
Assess your agency and ask yourself these questions:
What are our inherent strengths as an agency?
What are our inherent weaknesses as an agency?
Once you have identified your strengths and what you have to offer your consumers, you can then work on enhancing them. Additionally, knowing your weak areas is necessary so you can adjust your marketing plan accordingly or try to turn those weaknesses into strengths.
Assessing Your Opportunities and Threats
Once you have answered the above questions about your agency, the next thing to do is to take a look outward and ask yourself the following:
What are the emerging opportunities?
What are the emerging threats?
As the world continues to change, you may notice an opportunity those changes provide. In the same way, you may also be able to recognize and head off any threats to your agency and its ability to reach customers and do business, in general.
Figure Out Your Goals and Objectives
It is impossible to be successful without having a goal. With that in mind, it is important to have big goals that you are moving toward and hope to achieve by the end of a long period, such as a year, five years, or ten years in business.
Some examples of goals for an insurance agency could be having a certain percentage of the customer base in the area by the end of your first year in business or being out of the red by the end of your first five years in business. Use the SWOT analysis from the previous step to help guide the goals you set.
Breaking it Down
While having a large goal that you are working toward is important, figuring out how you are going to reach that goal and breaking that big goal down into smaller steps is just as important for two reasons:
It will take more than one big action to achieve a huge milestone.
By breaking it down into smaller steps, you will not become overwhelmed and will be more likely to move onto the next step and the next step after that until the goal is reached.
Have specific detailed plans that you want to meet month by month or even week by week. With that in mind, some questions to consider that will help you break down your goal into smaller steps are:
How many leads do you want to get a month?
How many quotes do you want to do a month?
How many sales do you expect to close in a month?
By the end of the year, ask yourself these questions again. Your business may have reached enough of your target customer base that the answers to these questions will have changed for your next year of business.
In addition to the above questions, as you get to know the market and your customers as well as get a feel for how well things are going, two more questions to ask yourself to help plan for the next business year are:
How many clients will you retain?
How many clients will you cross-sell other lines of business?
Develop Your Strategy and Tactics
So, you have done the theoretical work of figuring out your big goals and your smaller objectives that are on the path toward those big goals. Now comes the practical application—the part of the process where you decide what steps you will take to reach those objectives and goals.
Strategies vs. Tactics
There are two tiers to the practical application of a marketing plan:
The first tier is strategizing, which is the overarching plan.
The second tier is tactics, which are the smaller detailed actions you will take with the overarching plan in mind.
The strategy tends to be more fixed and unchanging, whereas tactics can—and often do—change depending on several factors.
An example of a strategy in action may be something like, “Connect with my customer base.” The tactics for connecting with a customer base could include many things, such as creating an email list and sending out weekly emails with your insurance plan options and deals you are offering. It could also include going door to door and introducing yourself to the people in the area which you are planning to serve.
You need tactics because, without them, a strategy remains an idea without any implementation. On the flip side, if you implement many tactics with no strategy in mind, it is akin to going on a hike with no destination in mind. The scenery might be cool, but you will get lost.
Considerations While Developing Strategies and Tactics
Here are some starting questions to consider as you develop your strategies and tactics:
How Good Are Your People Skills?
Fostering an understanding and personable environment in your agency—where you are open to criticism, honest about areas of weakness, and understanding of the struggles of others—can help you as you develop your tactics for reaching and gaining more customers.
How Can You Bring the Digital and Real World Together?
Obviously, depending on the demographic you are pursuing, there will be a strong lean toward marketing strategies that are most effective with that group.
However, by working towards having a strong online and real-world presence, you may expand and reach more people than you initially planned. Your potential for flexibility and growth will be much greater.
Establish a Budget
Marketing and advertising cost money. Even those small costs, such as signing up for a service that sends emails to customers, can add up after a while. Before you follow through on any of your marketing plans, take time to do some research on how much each will cost. The best way to do this is by organizing your marketing budget into specific areas such as:
Website
Social Media
Local Marketing
Advertising
Under each of those, list the finer details of each of those costs. For example, under your “Website” umbrella, think about each of the things that will help your website remain organized, easy to navigate, and running well. Write down what each of these subitems will cost. Repeat the process with your social media, local market, and advertising umbrellas, as well.
Some of these smaller items under the bigger topic may be a high cost but not an ongoing one, whereas others are routine costs that need to be factored in to keep things running smoothly. For example, the cost of your initial website design may only occur now and then. Whereas other costs, like website maintenance, are routine and need to be established as ongoing.
Keep in mind that if you have done your research into the target customer base and your competitors, you will have a pretty good idea of the marketing tactics that work the best and may decide that it does not make sense to put money into a certain marketing area.
Maybe the area you are hoping to build up is a customer base of mostly young people who are just starting their careers. Most younger generations tend to focus on areas like social media and website optimization when it comes to what they spend their money on. Therefore, budgeting for print advertisements may be throwing your money down the drain.
Be Mindful of Changes that Will Affect Your Budget
Obviously, there may be certain things that you cannot predict. It is important to be flexible and open to changing your mind and changing marketing tactics.
At the same time, it is also important not to switch things around constantly because it takes a while to get a read on how well the marketing is going in certain areas. This is the point where you measure the success of your marketing plan.
Measuring the Success of Your Marketing Plan
Once you have reached the end of your first year in business, it is time to look at your marketing plan and see whether it was successful. With this information, you will know how to adjust your marketing plan and strategy best and where to invest your time and money the following year.
There are many ways to measure how successful your marketing plan was and can be:
Return on Investment
The investment, in this case, is the money you have invested in a particular marketing campaign, such as advertisements on social media. The return on investment is the percentage that you make from your investment which is calculated as follows:
(Current Value of Investment – Cost of Investment) / Cost of Investment
Say, for example, you invested $2,000 in Facebook advertisements at the beginning of your first year as an agency, and by the end of the year, you have made $2,500 from new customers as a direct result of those Facebook advertisements.
First, subtract the cost of investment from the current value: $2,500-$2,000 = $500. Next divide that resulting number by the initial cost of investment: $500/$2,000 = .25 or a 25% return on investment.
Sales Numbers
This metric is a pretty simple one and, in its basic form, is just comparing the amount of money you make from year to year.
For instance, in your first year as an agency, you may reach a certain number of people and have them buy insurance plans resulting in $50,000 sales total from all your marketing strategies. If, in the next year, using all the same marketing strategies, you make $75,000 total, that would indicate that the marketing is working.
Note: Be sure to use other measurements besides this one, as you also have to adjust for inflation or the rising costs of your investment over time.
Customer Response and Reaction
While making more money over time is a great indicator of how well your agency is doing, getting feedback from your customers is also incredibly important. Your customers may buy an insurance plan that you are offering, but if it is only effective for a set period and they are dissatisfied with it (or other aspects of your agency), then you may not know until they decide to take their business elsewhere and you will lose money without realizing why.
Some great ways to measure customer response and reaction are by:
Conducting surveys
Sending out emails with a few simple questions about whether the customer is satisfied with the product and with the service
Reading comments on blog posts or your social media business pages
All of these are a great way to improve your customer service and get a read on which marketing is reaching the most people.
Marketing Reach
One of the great indicators about whether your marketing is working is to see if your reach is growing. Your customer service may be excellent, and your product may be great, but if your customer base is not growing, it is probably time to reassess your tactics to expand your reach. Some ways to expand include:
Sending out newsletters: If a potential customer base knows they can expect a newsletter on the same day and at the same time every week, then it can help build trust in your reliability as a company.
Being active on social media: This means sharing information that is educational and useful with your target audience, being willing to promote yourself and your agency, and interacting with your customers.
Asking for referrals: Be willing to ask your customers to refer their friends and family to your agency.
Internal Feedback
Part of being a good businessperson and having an insurance agency that is growing and reaching more people is being willing to listen to feedback. Along with customer feedback, there are two other sources that you should be considering:
Partners: You may be the person who has come up with the marketing plan and the strategies, but your partners may be the ones implementing them and interacting directly with vendors and others who may be in partnership with your agency. This means they will see the effects of a particular strategy sooner than you will and know if it is working or if it needs to be scrapped.
Salespeople: These are the people on the front line, working directly with customers, and are the first to hear if customers are satisfied or not. Listening to them is important. Do not be too proud to consider their thoughts, and be sure to treat them in such a way that inspires loyalty and honesty so they can inspire your customers to be loyal to your agency as well.
Observe Your Competitors
Imitation is the sincerest form of flattery. If you are using particular tactics and notice that other insurance agencies are starting to do the same things, then you know that your marketing plan is working.
On the other hand, if you are using marketing strategies and get no response whatsoever from your competitors, or they go a completely different marketing route, this is a good indication that your marketing strategies are not effective, and it’s time to reassess and try something new.
Conclusion
Creating a marketing plan for your insurance agency requires researching ahead of time. Use the many tools at your disposal to learn about the customers in the area where you want to start your agency. Look into your competitors to gauge how successful they are and how they are marketing their insurance. There is no shame in acknowledging that certain tactics work, and it’s okay to market your insurance in the same way.
Once you have done your research, write down your goals and objectives, strategies, and tactics. All of these will work together to help create a plan that you can implement to reach people and continue growing. Finally, make sure to reassess your marketing at the end of your first year and get feedback from your customers, partners, and salespeople and adjust, as necessary.
https://resources.getitc.com/itc-blog/creating-a-marketing-plan-for-your-new-insurance-agency
https://www.inc.com/guides/2010/06/defining-your-target-market.html
https://smallbusiness.chron.com/7-ways-evaluate-marketing-plan-58331.html
https://www.agencyrevolution.com/blog/2019/10/29/the-independent-insurance-agency-swot-analysis/
