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How
To Use The Right Kind Of Advertising
To Improve Your Insurance Business!
by Ken
Varga
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Here's a quick, six
word quiz-
What
Is The Purpose of Advertising?
Take a few moments
to think about it, because the answer isn't as obvious as you may realize.
When I ask agents this question in my seminars or consulting sessions, the reply
I usually get is similar to, "To get the agency's or the agent's name in
front of the prospective customer."
Was this also your answer?
If so, then, to a small extent, you're right.
But there's more to it than that-
The
Purpose Of Advertising Is To Make Your
Prospects Aware Of Your Products-
And To Get Them To Act!
Keeping your name,
your agency's name or the types of products or services you offer in front of your
prospects is only part of the formula. If you can't get your prospects to take some
type of action, you're not maximizing the effectiveness of your advertising.
It's nice to create "Top-of-mind-awareness" or to establish yourself or
your agency as a brand in your prospects' and customers' minds, but unless you have
very deep pockets like some of the large national corporations that you see advertising
on TV, you'll go broke trying to do it.
There
Are Two Kinds Of Advertising... The One You Should
Avoid Using At All Costs- And The One You Should Use!
The first is called
image or institutional advertising. And it's the type of advertising
that makes up most of the ads you see in newspapers, magazines, and other media.
The biggest problem with image or institutional advertising, and what
makes it so ineffective for the average agency or agent to use, is that ads created
in this format are not designed to sell. Their purpose is to keep the name of the
agency in front of their prospects, letting them know how great, how big, and how
wonderful that agency is.
The problem is, your prospects don't care how great, how big or wonderful you are.
They have only two main concerns:
First, what can you do for them, and how can you help them solve their problems or
satisfy their needs and wants? And, second, what unique benefits or advantages do
you offer them that your competitors don't?
"Image" or "institutional" advertising doesn't answer either
of these questions. Large corporations, such as IBM, Coca Cola, Nike, or GM (and
most insurance companies) use this type of advertising mainly to keep their name
in the buying publics' minds after they've established themselves in the marketplace.
Now, you may ask-
"If image advertising is so ineffective, then why do these large companies
still use it?"
Well, there are three reasons-
First, they have an almost unlimited advertising budget.
Second, since there's no accurate way to track the results of image or institutional
advertising, they (incorrectly) think the advertising is actually working because
they're making hundreds of millions of dollars a year- in spite of bad advertising.
And, third, an image ad usually pleases their shareholders.
Even though the shareholders really do want to see the company turn a profit, they
don't know the ads are ineffective (because they're not marketing experts). They're
just happy to see it being run because it makes them feel good to tell someone they
own a part of that particular company.
It's a shame these giant corporations just don't realize how ineffective their image
advertising campaigns are. If they did, they would have saved millions of dollars.
Better yet, if they knew how to use the right kind of advertising, which we'll discuss
in a few moments, they would be making millions of additional dollars a year.
Now, because most agents and agencies have a limited advertising budget, you must
make every dollar produce the maximum return. And the best way to do this is to use
the second kind of advertising - the one that works - called direct response
advertising.
Unlike image or institutional advertising, which is simply a waste
of money if you use it...
Direct
Response Advertising
Can Make You A Fortune!
A direct response
ad (or sales message) achieves three main objectives...
1. It
answers the prospect's most important question... "What's in it for me?"
2. It asks your prospective customer to respond or take action in some way!
3. It's trackable, measurable, and accountable!
As you can see,
a direct response ad (or sales message) appeals to the self-interest of the prospects.
It tells them all the benefits they'll gain from using your product or from doing
business with you.
In other words, a direct response sales message (whether an ad, a flyer, a sales
letter, a postcard, and so on) allows you to identify, qualify, and then target your
prospects - the ones that are interested in what you're offering. This way, you'll
be able to weed out the non-interested parties up front, and allow you to maximize
every marketing dollar by focusing your efforts on selling only to those who are
interested in your offer and who can afford it.
Interestingly, because a lot of agents think their market is everyone, they usually
make their ads or sales materials appeal to everyone. Perhaps you've even done this
yourself.
If so, this may be the reason your ad hasn't been working as well as it could...
When
You Try To Sell To Everyone-
You'll End Up Selling To No One!
Although your products
or services may be suitable for everyone, there are some people who will need or
want them more than others. Your goal is to find out who are your most ideal prospects
- the ones who are actually interested in (and can afford) what you're selling, and
then target them with your most irresistible offer.
For example, if you sell homeowners insurance, your ideal prospects would be those
people who own their own homes.
So, rather than placing an ad in a newspaper where thousands of people may see it,
including renters and apartment dwellers, you'll reduce your advertising costs and
increase your chances of making a sale if you obtain a listing of the homeowners
who meet the specific requirements you're looking for and send your offer to them.
Or, you can rent a list of the people who live in your area that subscribe to a home-improvement
magazine and send a sales letter with your irresistible offer to them.
Similarly, if you sell a special kind of auto insurance, then you want to find the
names and addresses of the people who live in your town or city that own the same
type of vehicle you're insuring, and send them your offer. This is called niche or
target marketing.
In short, it doesn't matter what kind of insurance you sell, you should take the
same approach. You and I simply don't have a marketing budget large enough to reach
everybody. Nor do we want to. Here's an important point that you should always remember...
Your prospects and customers want to buy from an agent who can relate to them
and who specializes in their areas of interest. If they see you trying to be all
things to all people, they simply aren't going to do business with you.
If you drive a BMW, for example, you'll most likely take your car in for servicing
at a garage or dealer that specializes in BMWs- not in Hondas, Toyotas, GMs, Fords,
and so on. In other words, a garage or dealer that specializes in your type of vehicle,
rather than in all makes and models of vehicles.
Well, running an image or institutional ad is like operating a garage
that services all makes and models of vehicles. You'll have to run a lot of ads to
find enough people who are interested in buying your product or using your service,
because most of the people who see your ad simply aren't interested in (or can't
afford) what you're selling.
Another characteristic of a direct response ad is that it stimulates a direct and
immediate response - either a qualified inquiry, phone call or visit to your agency
- or better yet - encourages an instant sale.
Even though some agents say they run expensive ads that produce little or no sales,
they still claim the ads work because their advertising has probably made
more people aware of their agency.
This makes absolutely no sense. The important thing to keep in mind is-
The
Only Purpose Of Running An Ad- Is To
Compel The Reader To Take Some Sort Of
Action Toward Making A Purchase!
I can't emphasize
this enough.
If you run an ad for any other purpose, especially to tell your prospects how great,
how big and how wonderful you are, then it's just a waste of your hard-earned money.
Once again, remember, your prospects don't care one iota about you, they only care
about themselves and getting their problems handled quickly, efficiently and cost-effectively.
The way you get in front of your prospects to let them know about your products and
services, and how you can help your prospects solve their problems, is through marketing.
Whatever you do, don't make the mistake of using the wrong type of marketing.
Since marketing is the engine that drives your business, if tougher competition or
a poorer economic environment begins to negatively affect your income, don't do what
so many other agents do- eliminate or cut back on your marketing. That's the best
time for you to get aggressive and turn up the heat. As your competition pulls out
of the advertising arena, and you begin using direct-response advertising, you'll
surge ahead generating more clients and increasing your market share substantially.
Since marketing is an investment and not an expense, doing more of it, especially
when all your competitors are cutting back, will skyrocket your agency to a new level
of profitability and success.
Ken Varga was in the insurance business for 33 years and had insured 459,182
policyholders for his agency, which he sold in December 2001 for many millions of
dollars.
As a payback to the insurance industry, he spent almost three years developing turnkey
programs - based on the sales, marketing, and agency management secrets he used to
build an agency with almost half a million clients - to help agents become more successful
in their insurance profession.
To discover how you can use his million-dollar ideas, secrets, and systems to DOUBLE
your income within 12 months- while working up to 20 fewer hours each week, visit
his website:
http://www.sellinsurancelikecrazy.com/a/1029
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