A Marketing Budget: Why Insurance Agencies Need One

Lots of insurance agencies spend plenty of money on advertising and marketing—without actually deciding how much money to spend ahead of time. But even if you’re yet to be established and you’re planning on relying on the low-cost and even free marketing options out there for the time being, it’s important to bear in mind that even the cheapest marketing can be expensive. The key is to plan ahead!

Business cards, a professional-looking website, a sign for your office, branded swag, industry membership fees, the occasional trade show—it can all add up, and this is before you get to actual promotional activities. Even if—maybe especially if—your marketing budget is most likely to be small, you still need a budget.

How much you should spend on your marketing depends on a host of factors—including your competition, your market, the type of insurance you’re selling, whether or not you’re a start-up or a more established insurance agency, and a range of other considerations. Most insurance agency start-ups require more money to launch a business than established companies do to keep them afloat. But this will depend on you.

But no matter the size of your marketing budget, you do need one. You can’t track the effectiveness of your marketing efforts unless you can measure the results against the amount you invested in the first place. And you can’t decide which marketing efforts are out of your league—and which are good deals for your business—without knowing what your company expects to spend in a year on its promotion.

Deciding how to allocate your insurance agency’s marketing dollars is something you’ll have to learn with experience—as every market is different. But here are a few ideas for setting a basic budget.

Figure out your finances. Just because you don’t have a budget doesn’t mean you’re not spending. It’s important to know exactly how much is coming into your business, what your other expenses are, and how much your current finances allow for a marketing budget. Bear in mind that advertising and marketing are high-priority activities, as they bring in new business—so there might be some lower-priority things you’re spending money on that you can reallocate to a marketing budget.

Find out where your customers are and what they expect. If you’re an insurance agency, it’s crucial that you have a professional-looking website and preferably a quote calculator. A social media presence is helpful—but what if you’re looking to market long-term care insurance to older customers? That demographic may be more responsive to print and other traditional forms of media. Consider your audience when deciding where to invest your budget.

Assess how much time you’re spending on “free.” It might be free to open an account with various social media platforms like LinkedIn, Facebook, and Twitter. But learning to use them well enough to get results is time-consuming—and time isn’t free. Decide whether hiring a staff member or company to manage your social media would be more cost effective in the long run.

No matter the size of your marketing budget, it’s important to be sure that your messaging and your branding are consistent across all media platforms. Once you have a marketing budget, you can assess your spending across a range of platforms and measure the return on investment (ROI) against what you spend on different efforts. Know your budget—even if it’s small—and you’ll have the foundation you need to get started.

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