Reaching your target market

Most brokers have limited marketing budgets, if any at all. So, in order to make the most of their marketing spend, it is important they have a clear strategy.

Jenny Hinds, director of Font Marketing, says: "The small to medium-sized enterprise market is a large and varied sector, so brokers first need to identify the parts of the market to target. Any marketing activity is more successful if it is aimed at a specific group with similar characteristics and requirements."

An effective marketing strategy will be aligned with the overall business objectives and will incorporate a mix of marketing activity over the long term, according to Hinds. This does not necessarily involve huge budgets - just a consistent and targeted approach.

Word of mouth remains an effective way to promote a business as brokers tend to be well-known in their local community. Although Hinds argues that, in today's climate, most businesses cannot rely solely on this.

A variety of marketing tactics are needed to achieve targeted growth.

Hinds says: "A broker's message needs to reach its target market frequently. For example, a mailshot campaign will be much more effective if followed up by a telemarketing campaign, a solid PR programme, some targeted advertising and a good online presence."

Hinds says: "The more times a prospective client sees or hears a positive message about your company, the more likely they are to become a client."

Phil Barton, group commercial director of The Jelf Group, agrees. He says: "It is essential to have a clear marketing strategy and the first base for this is to have a strong database of clients and prospects. There are a lot of brokers that are process-led, surviving on renewals rather than focusing on new business and developing new services into their client base."

The Jelf Group recently spent six months installing a new customer relationship management package. It now has around 6000 clients and 10,000 segmented corporate prospects.

Barton says: "We are spending more money on marketing and brand awareness than ever before. It is a huge investment but we are seeing the rewards and are growing rapidly."

Sponsorship can be an effective tool to help raise awareness. Brokers should consider whether the event/entity being sponsored is relevant to the target market, and the coverage that will be achieved from the sponsorship.

Successful sponsorship will bring a brand and its target audience together in a professional and memorable way, according to Hinds.

The Jelf Group uses sponsorship as part of its marketing mix. Barton believes it is important in some of its regions where there is a strong sense of community.

"To measure the effectiveness of marketing activity, brokers should keep a record of the cost of the campaign (time invested as well as monetary cost)," says Hinds. They must also note the amount of contacts made and size of target market reached, count the number of responses and new business leads received and calculate the conversion rate and the value of the new business.

Jelf's database can be used to produce management information to help measure the success of a particular marketing activity.

Marketing support

Many insurers offer a range of marketing support, which is particularly valuable to the smaller broker. Mike Powell, commercial marketing and product development manager of Allianz Cornhill, points to its range of marketing support, which includes prospect lists, mailings, customer segmentation and customer relationship management.

Powell says: "In addition to having the skills and resources to help brokers, we can also pass on cost savings as we have an in-house design centre and printers."

Yvonne Stennett-Blake, marketing manager of NIG, says: "Successful marketing initiatives can help differentiate a broker's business and the services they offer from its competitors, as well as promoting their unique selling point, for example, personalised service and sector expertise."

NIG is helping to promote brokers' online offerings with insurancexpert.co.uk - an online promotional tool generating leads to brokers and promoting the benefits of using a broker. The site is currently producing more than 2500 leads per month to brokers online.

NIG also offers the Web Champion programme to help brokers build their own tailored website or enhance their existing services.

Stennett-Blake says: "Brokers do not have the time, the economies of scale or the marketing skills to develop a comprehensive marketing programme and our experienced team can deliver effective marketing support."

However, Dave Smith, head of market management of Zurich UK Commercial, argues that insurers are not experts on marketing to SMEs.

He says: "Brokers get a lot of fluffy marketing material pushed at them. Brokers want tangibles to help retain the business. The support we offer is geared around our service and pricing. We recently produced information on how to stabilise premiums, which was geared towards both the broker and the SME client. Brokers would be better off going to marketing agencies rather than insurers."

Outsourcing

Hinds agrees it is important for external support to be provided by marketing professionals. She says: "Without external help, marketing and business development tend to take a back seat. Hinds adds: "A creative agency will be able to help develop an innovative campaign and produce professional material. Marketing material that looks unprofessional will not be effective and may even have a negative effect on your business. It is worth investing in a certain amount of creative input - even if this is just to create a company logo."

However, outsourcing can be costly and traditional agency fees are out of the reach of smaller brokers. Font Marketing provides online marketing solutions to help smaller brokers achieve profitable growth. All the content is produced by marketing professionals with experience in the insurance industry but is more affordable because it is online.

Jelf outsources part of its PR activity. Barton says this has added value but it is important that the relationship is managed. "You can not select an outsourced partner and expect it to work; you have to manage it. You can't just offload it," he says.

So whether marketing is in-house, provided by insurers or outsourced it can be used to help differentiate a broker's offering as well as generating new business.

Hinds says: "Brokers have a role to play in educating clients of the importance of good advice, risk management, claims service and appropriate cover. Marketing activity can help reinforce this message and raise awareness of the benefits of using a broker."