| TECHNOLOGY & YOUR AGENCY |
Spend money to make money
By Ryan Hanley, Agency Nation
Y ou’ re going to have to spend money. There it is. There is no free version of success online. You are always going to pay. Everyone pays somehow. And there are four ways to do so. The first three are fairly obvious:
• Some will pay with their own time,
• Others will pay by allocating resources,
• Yet others will pay with capital.
The reality for most agencies will be a combination of these three.
missed opportunity The independent insurance industry has a long tradition of guarding our time, resources and capital. What do we do then, when faced with the decision of“ pay and grow” versus“ business as usual?”
We abstain. We wait. We kick the can. We bury our head in the sand and keep doing what we’ ve always done.
The fourth way independent agencies pay for digital marketing is in the opportunity cost of not engaging. In many ways, the opportunity cost of inactive can be the most expensive way in which an agency pays for digital marketing.
Don’ t believe me? A few days ago I was chatting with Roger Sitkins and he shared an incredible statistic with me: Generally speaking, for every $ 125,000 in revenue an agency generates, they can expect an additional $ 1,000,000 at sale time.
Even a modest amount of focused work on digital marketing can generate $ 125,000 in revenue over 12-18 months. Are you willing to leave $ 1,000,000 on the table?
how to optimize what you pay
It’ s inevitable, we’ re going to pay for success online. That doesn’ t mean we spend without regard. Here are a few ways to optimize what you pay for digital marketing:
1) The office is expensive Your office space is a fixed and heavy cost to daily agency operations. Additionally, the millennial workforce has an increasing desire for workplace flexibility. Why keep costs high when much of the work your agency does( i. e. service calls, outbound marketing and digital marketing) can be done remotely at a lower cost?
I know for many agencies this is a cultural step too far( we’ re dealing with these issues currently at TrustedChoice. com). But for those principals looking at their agency as a business and not a lifestyle, providing low cost remote options is a boon opportunity.
2) Have a goal for every marketing dollar Digital advertising is not digital marketing. Digital advertising is a subset of digital marketing. This is an important distinction to understand. Buying display ads is not digital marketing, it’ s digital advertising. There is nothing wrong with digital advertising. Nothing.
Digital marketing is a broad term to explain the work we do in creating content, social media and email marketing. Here is the traditional cost / benefit analysis of digital marketing versus digital advertising:
Digital marketing is lower cost( than digital advertising) in terms of dollars and creates long-tail results which can last years( at almost no cost). The downsides to digital marketing are a need for more upfront resources and more lag time to results.
Digital advertising can generate almost immediate results and comes with a high degree of targeting potential. The downsides of digital advertising are higher cost and no long-tail benefit.
What is a long-tail benefit? You write a blog post and that post lives forever on your website attracting new potential insurance buyers as long as your website exists. Display ads on the other hand only produce results until the money runs out. Once you’ re out of money the ads stop showing. This doesn’ t mean that display ads don’ t serve a purpose, they definitely do, just not the purpose most people assume.
4 KANSAS INSURANCE AGENT & BROKER | January-February 2016 |