The short answer is yes, of course your insurance agency has friends.  And now, there is a way to count your friends through the number of likes your agency gets on Facebook or the number of Twitter followers you may have.  Confluency Solutions tracks about 6,000 insurance agency Facebook pages and the average number of friends is…(drum roll)…96.*  But whether an agency has 50 friends or 250 friends, there seems to be a limit to social network growth once a certain number of fans has been reached.  Here is a graph snapshot of Facebook friend activity for an agency with 153 fans:

What you notice is the sawtooth up-down activity of gaining a friend, losing a friend.  We see this pattern with most agencies.  Some agencies will pick up five or six new likes in a day, but inevitably, they also lose a commensurate number over the next 30 days or so.  It is a rare thing when we see an agency move beyond a core of their personal social network.  When they do, their graph looks more like this one:

This agency loses a fan once in awhile.  But for every one they lose, they pick up 5 to 10 new likes.  So the question is, what is the difference between what the two agencies are doing?  The goal of social media is to gain new prospects and sales over time through increased awareness of your insurance agency and your value proposition.  So simply having a Facebook page is not enough; you need to build a network and get that network to engage with your Facebook (or other social media) page.  Here are some lessons learned from observing the first kind of agency – the typical graph – vs. the second kind of agency – the exception.

1. Make sure your agency page can be viewed without requiring someone to first be logged into Facebook.  You can make sure your page is public by not restricting any access in your page permission settings.  Right now, the only restriction option are for country and age.  A number of agents have restricted their page to U.S. viewers only; Facebook doesn’t necessarily know anything about where you are from or how old you are unless you are logged into Facebook.  Using these restrictions will keep a lot of people out of your Facebook page and will also make it invisible to the search engines, which is bad for SEO.
2. Make sure you post often enough, but not too often.  Three to five times a week is plenty; three to five times a day is too frequent.  Automatic Twitter feeds can really get you into trouble here, especially if you are tweeting with some frequency.  Celebrities and news organizations might be able to get away with multiple short posts every day, but most of us don’t have anything interesting enough to say that often that people will allow you to stay in their news feed (see graph #1 to support this).
3. Mix up your posts by adding a myth-buster or some interesting factoid once in awhile.  Photos and video get a lot more interest than text posts so try to include this kind of content.  And be careful of sounding too much like a salesman.  People who peruse their news feed aren’t generally looking to buy insurance.  Facebook, and social media in general, is a branding space, not a sales space.
4. Try some basic contests from time to time and restrict participation to your Facebook network.  This will help you get and keep fans.  Contests can and should be promoted within your Facebook page  - with photos and video if possible.

*The average is calculated by first excluding the small number of agency Facebook pages with fewer than 2 or more than 1,000 likes.

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

A lot of insurance agents are reticent about establishing social media profiles, let alone engaging in social media marketing.  But as the slide show below illustrates, you can suffer a social media disaster – even though you aren’t actively participating in social media.  There is some language used in the slide show that I might not normally use here, so if you are squeamish about that sort of thing, skip viewing.  But I hope you will take a look and take some of the lessons to heart.  In particular, look at the insurance promotion hoax starting on slide 29 – an update on George Orwell’s War of the Worlds…

Are you thinking about hiring a full time blogger and social media marketer?  According to Socialcast, the median salary for a Social Media Manager is $45,501.  Toss another 20% on top of that for benefits and other head count related costs and the cost of a full time social media manager could be over $54,000 a year.  For most insurance agencies, that means another 200 policies a year have to be written each year just to recover these new costs.  That’s real money and real production.

Facebook and other social media, as I’ve said here before, aren’t sales mediums – they are branding channels.  But an an ongoing expense like a Social Media Manager requires some justification – especially if new personnel costs are layered on top of additional new costs.  Before you foray out beyond dabbling in social media commitment, a strategy and cost justification and ROI method should be put in place.

Source:  Social Cast

Take a look at the chart above and notice that 77% of Social Media Managers have four years or less experience (and probably no experience as an insurance agent).  That means that you may not be able to rely on your new hire to come up with a compelling case for social media return on investment.  Social media campaigning for restaurants, entertainment-based business, and consumer products is not the same thing as social media marketing for insurance.  The principles are the same, but the positive emotional attachment to insurance products and services are different, requiring a different approach and justification for insurance agents who are ready to dip more than a toe in the social media waters.

None of this is to say that insurance agents should eschew social media, only that a well thought through strategy and a way to tie social media success measures (number of fans, e.g.) to increased net revenue needs to be the first step.

Insurance agents, and businesses in general, sometimes have a hard time getting their heads around ROI (return on investment).  Confluency Solutions measures what I would call direct website ROI:  calls, and online requests for insurance quotes; conversions to policies and average commission.  And the ROI numbers are good.  Annual reviews identify areas where insurance agency website ROI can be increased.  These generally fall into three categories:

1.  More website traffic;

2. Higher levels of traffic conversions (% asking for quotes and better quality prospects);

3. Support for other agency marketing and customer development initiatives. The reason many of us have a hard time getting our heads around ROI is that most of these measures (like website traffic, e.g.) don’t have a place in ROI calculations.

Social media, like Facebook and Twitter, are even murkier.  Where do increased numbers of Facebook fans or Twitter followers enter the P and L statement?  The short answer is that they don’t.  However, social media and website activity does contribute to ROI – the measures mentioned in the preceding sentences would fall into the category of ‘transactional precursors’ or what we sometimes call leading edge indicators.  Put another way, if your website visits increase, at some point you should expect a net increase in quote requests, insurance policies written and new sales commission.  Ditto for Facebook fans and so on.

If you are interested in quantifying your insurance agency website and social media activities in a hard-nosed, bottom line way, then take a look at the excellent slide set on the topic from Oliver Blanchard.  Not only does it contain good information, but it’s pretty darn entertaining as well:

A couple of days ago, Attorney General Eric Holder announced the arrest of 125 crime family figures in what the FBI is calling the largest mob round up in history.  Every now and then, a major news story reminds us that often, law enforcement is working quietly for long periods of time, building up to a major disruption of criminal activities.  The announcement made me wonder if we won’t soon here a similar announcement heralding the curtailment of spam and near-spam web trickery.

For your consideration (as Rod Serling used to say), point one: Google has recently undertaken a manual audit of Google Place Page reviews.  Many speculate that the audits are a precursor to an algorithm change to recognize and clean up spam reviews.  Reviews, positive or negative, have been a big factor in Google’s local search algorithm.  Because of that, Place Page reviews have been targeted by spammers who post false reviews to influence search results, in violation of Google’s terms of use.  The large number of obviously fake reviews that have proliferated over the last few years has finally prompted Google to take action.  That first step is human review and a possible and likely outcome may be a blended machine algorithm and human audit process.

For your consideration, point two: Back in November, a new search engine launched named Blekko.  Blekko was built in response to the increasing amounts of spam showing up in Google search results.  We’ve all seen useless and unremarkable websites show up at the top of search, and searches related to insurance services are no exception.  Google is clear on their mission to promote sites with the most useful, relevant content.  But, through ignorance or willfulness, website owners still employ tricks to fool Google’s algorithm and gain search visibility.  When Google discovers spam SEO techniques, it levies severe penalties against offending websites.  But that doesn’t stop website owners from trying to out game Google’s algorithm – especially when spammy techniques work.  There is a growing consensus that Google is loosing the battle.  That’s why Blekko’s search results will depend on human input to determine search rank.

For your consideration, point three: Among the initial investors in Qwiki, another new search engine promising a ‘search experience’ are a co-founder of Facebook and a co-founder of YouTube.  Will Qwiki become a major search player?  It’s worth keeping an eye on, but take a look at the introduction video on their home page and notice the reference to curated information.  Yet another search service recognizes the short comings of purely algorithmic search results.

So are we on the cusp of an internet ‘mob’ round up?  I think so, although the bust may not be so sudden and dramatic as the January 20 AG announcement of the real mob round up.  But the trend seems set:  expect more human intervention in all search results.  The message for those of us that own websites?  Google’s mantra, that quality content counts, may actually become more true than ever.

The Insurance Journal posted an article yesterday, summarizing the main reasons why insurance agents aren’t adopting social media as a communication tool. I think it is worth commenting on each….

Some agencies are concerned about the errors and omissions risks that might arise out of the use of social media outlets…

E&O exposures can be managed to zero – if your insurance agency is willing to go out of business. On the other hand, E&O exposures can shoot through the roof if agencies don’t manage their communication policies at all. Somewhere between going out of business by practicing absolute avoidance and going out of business by not controlling E&O is a level of Errors and Omissions exposure that can be acceptably managed. That management should start with a policy, include staff training and monitoring of communications. Social media, including blogs, Facebook, Twitter and the like, are communication tools, just like the telephone, snail mail and email they should be managed the same way.

Many agents are reluctant to blog because they view themselves as insurance people, not writers….

All businesses – insurance agencies included – are in the business of acquiring customers, keeping them, and maximizing customer value by doing as much business as possible with each customer. There are numerous and varied techniques for getting new business and developing customers but one thing all tactics share in common is communication; without communication, no business gets done. Insurance agents need to know about insurance products and coverage if they are to provide professional counsel to customers and prospects (besides, licensing pretty much requires it) but that counsel won’t be received unless agents can communicate effectively. Increasingly, people use social media to communicate all kinds of things. Taking a head-in-the-sand approach to social media will eventually lead to deteriorating business results – even for insurance people.

Some (insurance agents) see social media as just fad…

MySpace used to be the leader in the U.S. in online social networking until it was supervened by Facebook. LinkedIn is the leading business social networking tool among Americans but it is being challenged by the Europe’s leading social network Xing. Twitter is a johnny-come-lately; maybe it will be a force a year from now, maybe not. The point is this: individual social media services may be fads but social media, as a communication trend, is clearly not.

Social media marketing is work; it takes time, it is a game played by different rules than most agents are used to.  Results will probably come slowly, and be difficult to measure.  With all my skepticism, I still believe that insurance agents should be taking measured, disciplined forays into blogging, Facebook, YouTube…and yes, I suppose even Twitter.  The Ten Commandents of Social Media, posted by Lon Safko on the Fast Company blog, is a great place for most insurance agents to start, although I wouldn’t recommend following every commandment (I like to think of them as suggestions anyway).  Below are the commandments reproduced, along with my opinions of whether they are elective or mandatory.

Commandments 1. Thou Shalt Blog (like crazy)

Elective. Blogging takes time.  Having said that, it wouldn’t hurt to start a blog, even a personal one that you share with only a few people.  At least you will become familiar with the medium.

Commandments 2. Thou Shalt Create Profiles (everywhere)

Mandatory. This isn’t hard or time consuming and has the defensive benefit of securing your business user name on the different social networks (this is different than claiming your insurance agency domain name).

Commandments 3. Thou Shalt Upload Photos (lots of them)

Mandatory. There are lots of places where you can do this:  Facebook comes to mind immediately, and don’t overlook photo sharing services like Picasa and Flickr.

Commandments 4. Thou Shalt Upload Videos (all you can find)

Mandatory. And leave the commercials out (remember those things you FF past using TIVO).  Nobody wants to see them.  Be educational, tell a story, feature your staff in the community.  There is no excuse for not taking advantage, this is maybe the lowest hanging fruit in social media because video upload is free (see YouTube, Viddler, and a bunch of others), and the video can be embeded all over the place once it has been created and uploaded.

Commandments 5. Thou Shalt Podcast (often)

Elective. You should really be doing video anyway.

Commandments 6. Thou Shalt Set Alerts (immediately)

Mandatory. Facebook and other social network services will send text messages to you, and other services provide similar options.  You should be using Google Alerts, or another service to keep tabs on where your business name pops up.  You need to monitor what people are saying about you for obvious reasons.

Commandments 7. Thou Shalt Comment (on a multitude of blogs)

Elective.  Or Mandatory. I can’t decide.  Monitoring blogs can take up more time than you might be willing to commit, but commenting on the right blogs and social media can raise you profile and establish you and your insurance agency as an expert – there can be real brand value in this, and your time expenditure can be managed.

Commandments 8. Thou Shalt Get Connected (with everyone)

Mandatory. If you want to build a social network, this is how you get started.  That is, once you have established your profile.

Commandments 9. Thou Shalt Explore Social Media (30 minutes per week)

The most Mandatory of all. At least that’s what I think.  Thirty minutes a week isn’t too onerous a time commitment to explore and become familiar with a phenomena that has the potential to shape how business is done.

Commandments 10. Thou Shalt Be Creative (go forth and create creatively)

Mandatory. I’m going to cheat on this one by including the rest of the Fast Company blog post on this commandment.  I’m reading between the lines:  don’t do product commercials.

And the most important commandment is creativity. That’s all. It’s just creativity and having fun. But you know what, that’s what your customers want. They want to see transparency. They want to see authenticity. They want to see you having fun. They want to be able to relate and communicate.

I have dabbled with Facebook and Twitter over the last several months and have immersed myself in the growing litany of webinars, seminars, blog posts, and white papers about social media and business marketing.  A few mornings ago,  I read a NY Times article about the US government requesting Twitter to delay maintenance that would have shut down the network just as Iranians were lighting up the Twit-o-sphere with election protest tweets.*  My prediction is that proponents of social media marketing will point to this as proof of Twitters power and applicability.   That’s exactly the level of rigor applied when pundits conclude that all businesses need to get on the social marketing bandwagon or suffer erosion of sales and market share.

I’m not converted.  Not yet.

I have opined in an earlier post that social media activities should be categorized as branding initiatives.  And I absolutely believe that companies need a social media strategy to protect and promote their brand.  But I’m ascribing a much narrower benefit and use for social media marketing than most of the effusive yea-sayers.

Consider the following factoids about Bank of America and Dell, Inc.:

Bank of America -  59 million customers worldwide

Dell, Inc. – 76,500 employees, about 300 million in unit sales in 2008

Let’s consider some differences between the two.  Bank of America appears to be doing little with social media while Dell has been aggressive.  BOA operates in the financial service and banking sector (most unpopular at the moment), while Dell markets sexy computer products.  BOA is far the larger company in terms of customers, employees and revenue.

Dell gets a lot of credit for using social media as a marketing tool, BOA, just about none.  Now, consider these factoids:

Twitter…

Bank of America – 1,279 followers.

Dell – 658,679 followers.   And you might take a look at this Twitter-friendly media placement regarding 2008 Dell sales:  Twitter has made Dell 1 Million in Revenue

Facebook…

Dell - has  31,391 fans.

Bank of America -  has 1,722 fans.

At first blush, it looks like Dell gets it right and BOA doesn’t get it at all.  Dell appears to have earned $1 million in 2008 sales from Twitter.  We’re left to guess at BOA’s Twitter revenue, but I’ll bet it’s nil.  BOA has 1,722 Facebook fans.  That sounds like a respectable number, but remember, BOA has 59 million customers.  Their ratio of Facebook fans to customers is a pathetic .00003.

But Dell, who ‘gets it’ has a Facebook fans to customers ratio of .0001.  A lot better than BOA, but still not very impressive.  And if we look at the ratio of revenue ascribed to Twitter as a ratio of income to followers the number is very modest $1.52 per follower.

I’m not suggesting with all this that Twitter and Facebook have no business marketing applicability.  But I am suggesting that before you launch your agency into a social marketing initiative that you take a sober look at the amount of time you will spend on it, and the likely tangible benefits.  And watch out for the hype.

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*”…there are less than 10,000 Twitter users in Iran (Sysomos via BusinessWeek) and less than 100 of them seem to be active.” – from a post in Gauravnomics Blog, questioning the media-attributed role of Twitter in the Iranian election protests.  It’s worth a read, and points up the effect Twitter hype has had in misrepresnting the impact of the service in other than business contexts.