What Kind of Internet Marketing Should Your Insurance Agency Be Doing Right Now?

I’m going to vastly oversimplify the exercise of choosing internet marketing components by making these assumptions:

• You know your insurance agency’s target customers, your key products, and your geographic marketing area;
• You have decided upon which traditional marketing programs you will use -direct mail, print advertising and the like;
• You have a budget for marketing and you know how much of that budget is available to you;
• You also know which programs will be implemented in-house and which ones will be outsourced.

So it’s August already…and your insurance agency is coming up a little short on some sales commitments that could cost you some contingency income and maybe some other preferential treatment from one or more of your insurance companies.  Your problem is short term in nature and you need a short term fix.

For most agencies, the main internet marketing options are these:

• Email marketing (in the short term, this would be confined to your current list)
• Local Search Optimization
• Organic Search Optimization
• Social Media Marketing
• Pay-Per-Click (or PPC)

On a relative basis, the costs for reach line up something like this:

Since we assumed you know your insurance agency’s available marketing budget, you may be able to rule out an option or two at the outset.  But budget aside, each program has different lag-time to sales and each program has a different sales production curve as you move to and through program maturation.   The next illustration shows the different lag times as you move through implementation phases:

This should make your choices fairly easy.  In the short term, Local Search Optimization and Email Marketing are probably your best bet.*  If you don’t have a good email list, one that has been updated, then your option may winnow down to just Local search optimization.  But September is right around the corner and your insurance companies, if they haven’t already done so, are going to start talking to you about marketing plans and commitments for next year.  So it’s a good idea to also consider the longer term sales potential of some of these programs.  Relative to each other, that potential over time looks like this:

When you have the luxury of time, return on investment (ROI) should enter into your decision criteria.  The chart below shows ROI ranges for both social media marketing and SEO.  There is some risk associated with each tactic for multiple reasons (I may blog about that later, if someone asks me to).  But the range of risk is something like good-to-great as opposed to horrible-to-good.  Risks associated with SEO and social media marketing are something most of us can accept and still sleep at night.  PPC would appear to be another matter.   PPC can produce acceptable ROI, but because insurance keywords are so expensive, pay-per-click ROI is unacceptably low for many insurance products.

*although as your short term gets shorter your only option may be to purchase leads

PPC, through Google AdWords or Bing, seems like an easy way to gain visibility and acquire insurance leads on the web.  Those of us who have managed pay-per-click campaigns have long known just how expensive insurance related keywords can be.  Google lives and dies (and least right now) on the health of their paid search services (AdWords, AdSense).  And apparently, a significant amount of Google’s second quarter revenues resulted from insurance agencies and companies bidding for insurance related terms.

Most Expensive PPC Keywords

Of course, cost-per-click is only part of the cost-per-lead story.  Well crafted (i.e., tested) ad copy coupled with effective ad landing pages might generate one lead for every 4 or 5 click-throughs.  But just because someone clicks on your PPC ad doesn’t necessarily mean they fill out your form.  Those that do become leads.  At the top end CPC of $54.91 for insurance terms, the best case scenario for cost-per-lead would be in the $200 to $250 range.  If your insurance agency’s quote to conversion rate is 25% then actual customer acquisition costs for PPC would be up around $1,000.  If your ad and landing page are not well crafted and lead quality or inconsistent sales management result in lower ultimate conversion costs, then customer acquisition costs could easily be $2,000 or more.

So, does PPC make sense for your insurance agency?  It certainly makes sense for Google.  It might make sense for your insurance agency as well, considering that most agency customers stay on board over several renewals.  If annual average commission is high enough, the lifetime customer value might justify the lead cost through PPC.  But cash flow would take years to balance out – not every agency can take a hit to cash flow that won’t be recovered for several years.

Infographic:  WordStream

One of the nice folks at Kirby Insurance in Baltimore was recently approached by a company called Leapfish and was offered ownership of a keyword relevant to the insurance agency business.

Who is Leapfish and what do they do?  Leapfish is a new entrant into what is known as meta search – basically aggregated results from other search engines and databases in one place.  They were founded in November of 2008.

What’s the reason for launching what appears to be yet another search engine?  A short answer can be found in the words of Leapfish founder Ben Behrouzi, from an intereview with  Betanews, “The Internet has grown so much, and there’s so much information, yet most people don’t go past the first page of Google and Yahoo in their searches. Tons of stuff is getting lost.”

Leapfish has introduced a twist on keyword advertising, allowing you to purchase and ‘own’ keywords for an up front registration fee and a renewal fee of about 5% of the up front fee.  Ownership of the keyword will guarentee placement in Leapfish paid search listings, and keyword owners can resell their keywords at a later date.  MediaPost reported these prices for various keyword sales:  keyword “diet” sold for nearly $8,000 while “Viagra” sold for $7,000 and “annuity” for $2,000.  Leapfish uses a proprietary algorithm to determine keyword value.

What to do if approached by Leapfish (or another untested company) and asked if you would like to spend a little money with them?  As far as Leapfish goes, there is a lot of good press, and a lot of people, like TechNewsWorld, seem genuinely sanguine about their prospects for success.  There are also some other sources who have adopted a skeptical posture, such as MediaPost and TechCrunch.

In a sense, ‘owning’ a keyword is a little like owning a piece of Leapfish.  Will they elbow their way into a crowded search field?  Maybe, but they have to hip-check their way past behemoth Google first.  The fact is that purchasing a keyword with Leapfish right now is more like investing in a start up than budgeting for an ad placement.  Your investment may prove to be worthless, but it may also pay off handsomely in the future.  The risk is wrapped up in the success of Leapfish.

If your objective is push traffic to your website and write business today, then Leapfish is probably not for you.  On the other hand, if you have a little money to put at risk on an investment, then Leapfish may be worth a longer look.