The art of getting yourself noticed

The term 'marketing' is often misunderstood. Perceived frequently as just 'selling' or 'advertising', its true worth is underestimated by many business managers. In fact, it is a complex strategy that focuses on positioning a product or service to meet the needs of the customer while simultaneously meeting the needs of the organisation. It is about attracting customers and making sure they are happy enough with what they buy that they come back for more.

I think I can say with some certainty that anyone reading this article will be interested in two key issues for their business: increasing revenue and reducing costs. Planned and executed properly, marketing can be one of the most significant contributors to increasing profits - and every business needs to be clear that when it comes to reducing costs it can be foolish to make cuts in marketing.

That is not to say that you should throw all your cash into it without a thought. Indeed, any form of marketing that is not working effectively should be either stopped or fixed. Marketing needs to show a return to the business and help to achieve overall corporate objectives.

Planning for success

Perhaps one of the reasons marketing is misunderstood is because activities that fall within its remit are often carried out without proper planning, targeting or monitoring. Badly planned ad hoc activity that does not produce results will only reinforce the perceptions of the cynics.

Planning helps to align objectives, focus on customer needs and determine what activity will produce the best results for your business. At the end of the day, which marketing activity is best for a particular company depends on many things - budget, position in the chosen market segment, level of competition, target market: the list is long. Good planning is vital to integrate all these elements and the best way to do this is to ask the simple questions: where are we now, where do we want to be, who is in our way and how are we going to get there?

When considering the current position - the 'where are we now?' - a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) is a good place to start. In this exercise you should consider every aspect of the business - products, staff, local economic environment, market cycle etc, and you should consider the competition ('who is in our way?'). There also needs to be a clear understanding of who your customer is, and what they actually want from a broker.

Customers can be split into various groups: personal lines or commercial; by geographical area; by age; by attitude (simple or sophisticated; risk-averse or risk-embracing); by spending (do the wealthy really care less about cost?); by preference for quality (the need to have market-leading cover). Each group has different needs and so needs to be communicated with differently. This is basic segmentation, and is an essential part of marketing. If you don't know who you are marketing to, you will never get it right and you will waste a lot of money along the way.

And when we talk about customers, we are not just talking about the premium-paying policyholder, but prospective clients, employees and the general public - any individual or group that comes into contact with the company. Likewise, marketing should target all these groups in some way or another, as they will all have a bearing on the achievement of business objectives.

All this makes it much easier to be more precise about what you want for the business - which leads us on to the next step: identifying where you want to be. Some areas to be considered when setting business goals include sales targets, profitability, desired positioning, employment objectives and community values. Marketing can help achieve positive results in all of these areas.

Getting the right mix

The next stage is 'how are we going to get there?'. This is where having a marketing strategy comes in, and many people still make effective use of the 'Ps': Product, Price, Place, and Promotion.

'Product' means the whole proposition: the insurer, the cover, the customer service, the claims handling, the risk advisory services - everything that the would-be customer receives.

The package should be developed in accordance with the needs of the target market, and this is an area that requires constant review to make sure that you have something different to say compared with your competitors. Today's customers will not be here forever, so thought should be given to who the buyers of tomorrow will be. It is a bit scary to think that the students of today will be the customer of tomorrow, but students are a distinct group ('segment') with many forms of media available to reach them. Earn their favour today, and it will be easier to market to them when they have more disposable income to put your way in the not-too-distant future.

Next on the list is price. Clearly the pricing of insurance is a variable matter depending on cover and limits, but the broker can put the context behind the overall value and influence the buyer's perception on whether the product is perceived as 'cheap and cheerful' or of high quality.

The 'place' element of the mix relates to where the product will be distributed. As an intermediary, you may have a shop front on the high street, so your promotional activity would differ from that of a Lloyd's broker, for example. You may also get marketing support from one or more of your providers. All of which is relevant to the next step - promotion. This is often the visible element of marketing and the different types of promotion that are available are almost endless - from placing an ad in the local Thomson's directory to a full-blown TV campaign. Which level is right for you depends on the factors we have already discussed - your target, your competition, and your budget.

Whatever methods you choose, there is one thing worth remembering, and that is the 'rule of seven'. Research indicates that, on average, it takes seven points of contact before a deal is struck. When it comes to large, complex cases, the lead time for a purchasing decision on insurance cover can be considerable. It may seem easier for the big boys, who can run a national TV or billboard campaign that most people will see several times, but this is not necessarily better than the type of communication that a smaller business can undertake. The seven points of contact could include an ad in the local media, sponsorship of a community event, a mailshot, a monthly newsletter, attendance at a trade show, a press release and a feature on local radio. The key to success is often integration - making sure that customers experience the same message at different points.

The actual amount and type of promotion done is, again, dependent on your objectives and target market. The key is to understand the importance of continuity and consistency. Marketing is not ad hoc. It should be ongoing and provide a clear message that is developed with each activity.

Appreciating the value

Marketing will only be successful if it is monitored against expected results - and, just like any other investment, the expenditure made and income received needs to be tracked. To do this accurately, management information should be maintained to enable to following factors to be determined:

- The value of each customer, both new and existing, over the length of time you will keep them. This is know as 'lifetime value'.

- Where new customers originate - whether that is word of mouth, in response to an advertisement, from a telemarketing campaign, etc.

- How much each marketing activity costs.

- How profitable each separate activity is.

Then apply this simple formula: if it is working and is profitable, do more. If it is not, stop it. Insurance is a competitive world. The best operators are not afraid to say no - whether to unprofitable business or to unprofitable marketing.

The way to view marketing is as a way of thinking that penetrates every aspect of the business, and a discipline that is planned properly and monitored carefully. Perhaps then it will be seen as it should be - as a necessary investment that will generate profit rather than a cost that can be cut back when times are hard. That is exactly the worst time to stop.

THE MARKETING PLAN

Marketing involves a range of activities aimed at generating more business. Since all of these activities require funding as well as resources, without a plan linking your business strategies to those activities you are unlikely to achieve your business goals. The components of a plan should include:

Executive summary: a brief summary of main points and recommendations, used by your management team as a quick guide to the plan's key elements.

Marketing audit: providing a detailed overview of the business environment and where your company sits within it.

SWOT analysis: identifies the company's main Strengths and Weaknesses, as well as the Opportunities for and Threats to the business.

Goals and objectives: outlines the marketing objectives (which should fully support overall business objectives) and identifies issues that might impact on their achievement.

Marketing strategy: defines the broad approach that will be used to win and retain customers.

Action plan: a translation of your objectives into a set of specific actions, each assigned to an individual with a target date for completion.

Monitoring and controls: focusing on how progress towards the achievement of your objectives will be monitored.