According to HubSpot.com, 65 percent of businesses said generating traffic and leads is their top challenge. Traditionally, the financial services industry has addressed this challenge through marketing channels such as direct mail and mass media advertising. The industry, however, has been slow to embrace and adapt to any of the new digital marketing channels that have become available.
At the end of 2016, independent insurance producers were beginning to turn to digital marketing. As a result, they quickly learned they now have access to data, flexibility and opportunities that never were available before. In 2017, producers can expect to see the following trends in digital marketing:
A reduction in direct mail. Last year saw a significant drop in direct mail for the financial services industry. Direct mail can work, and it’s still an effective way to reach new prospects, but it’s becoming increasingly expensive and inefficient. Independent producers are quickly learning they can easily acquire new clients through digital marketing, often at a lower cost per conversion.
This trend certainly will continue in 2017 as more producers feel comfortable marketing through digital channels. Retirement income planners should be pleased to know that baby boomers are currently the fastest-growing demographic on Facebook, and they're the ones who spend the most time using it. Younger users may be leaving Facebook to focus on social media sites such as Snapchat and Instagram, but the boomers continue to socialize through Facebook.
Greater investment in social media advertising. The drop in direct mail campaigns will continue to be directly proportional to the rise in social media adoption. As producers continue to experiment and test social media marketing, they will find the cost savings and ease of prospecting to be invaluable.
As a simple comparison, workshop and seminar producers using direct mail can expect to spend, on average, $125 to $150 for each household that registers for an event. By running similar messages in a digital format, most producers can bring their costs down to $40 to $60 per household. On occasion, I’ve even seen campaigns with costs below $12 per household.
Mass targeting replaced by micro-targeting. Producers should know which message attracts each type of prospect. A 55-year-old woman can be shown a different image than a 60-year-old woman sees. Different types of ad copy and photos can target different genders or prospects with specific occupations and interests.
Producers limiting themselves to mass media and direct mail are unable to get very specific about whom they target. Filtering their marketing by prospects’ age, location, ethnicity, gender and income is one of the limited options producers have when it comes to mass media or direct mail. In addition, the accuracy of the data on mailing lists is questionable at best.
By contrast, social media sites such as Facebook and Instagram and search engines such as Google have incredibly detailed information about each of their specific users. They know what consumers like and dislike, and they understand their users’ interests.
This may seem a little scary, but it’s not all that threatening. It simply allows producers to show the right ads to the right audiences. It also makes it easier for them to spend their advertising budgets more efficiently.
I know an independent insurance producer who wanted to hold an educational workshop at a local college campus. His target demographic was married homeowners between the ages of 55 and 64 with investible assets of more than $100,000. The producer was very involved with his church community and wanted to reach out to fellow church members. On top of that, he was an avid bicyclist and wanted to market to the bicycling audience as well.
We decided to split-test the campaign into three subgroups. One ad group went out to pre-retirees within a 10-mile radius of the meeting venue. A second ad group focused on active Christians in a slightly larger radius. The final ad group targeted bicyclists in the same area. Using a single landing page for all three sets of ads ensured that the messaging was appropriate across all three ad groups. When the campaign was complete, the agent was able to attract more than 110 registrations for the event, with healthy traffic coming in from all three ad groups.
Quicker, more flexible campaigns. I know another independent insurance producer who was planning a Social Security workshop. We built landing pages and started running Facebook ads to get people signed up. Two days after the ads started running, he called me in a panic. “You won’t believe this,” he told me. “The library just called and told me they double-booked our workshop. They said I can’t use the meeting room anymore! What are we going to do?”
“How quickly can you book an alternate venue?” I asked. “If you can get something quickly, we can update the ads and landing pages, and no one will know the difference.” Fortunately, the campaign was still in the early testing phase and had received only a few registrations. Once the producer found a new venue, we updated the campaign and reached out to everyone who had registered to let them know about the venue change.
No harm done.
Now imagine the same scenario, but instead of running the campaign digitally, suppose the producer sent out postcards to five or six thousand people. What would the producer have done then? Once postcards ship, there’s not much you can do. If the venue cancels your event, you’re sunk.
In addition to having flexibility, independent insurance producers will find that they can significantly shorten the duration of their campaigns without sacrificing the number or quality of responses. No longer do producers have to plan four or five weeks out to set up their direct mail campaigns. Digital campaigns can be set up quickly, and the budgets can be manipulated easily to generate a strong response in a short amount of time.
While the possibilities of digital marketing are endless, the details can start to get confusing. Is it best to run ads on a cost-per-click (CPC) basis, or would cost per mille (CPM), also known as cost per thousand, be more effective? Or what about cost per action (CPA)? Should the campaign focus be primarily on Facebook advertising, or should one also look into search engine marketing (SEM) on sites such as Google and Bing?
The answer: It depends.
It depends on what you are trying to accomplish and the overall goals of your marketing efforts. Getting people to attend a seminar or workshop may require one approach, while attracting more likes to a Facebook page will require a different strategy. My recommendation: find a trusted digital marketing provider to manage and run digital marketing campaigns. Think about it. A producer would never advise clients or prospects to try developing their own retirement income plans. Clients or prospects need to work with an expert (you!).
When it comes to digital marketing, leave it to the experts who understand not only how to create ads that prospects will respond to but also run the campaign in the most optimized, efficient way possible.
Chris Hooper is seminar marketing specialist with M&O Marketing, Southfield, Mich. Chris may be contacted at firstname.lastname@example.org.