Marketing - Banging the drum

In its simplest form, marketing is about ensuring that your business meets your customers' needs and wants, as well as making sure that they can buy what you are selling in the right place at the right time. It is also about communicating loudly what you do to anyone that cares to listen.

Many insurance brokers have tended to shy away from marketing, preferring to rely on their selling and entrepreneurial skills to drum up new business and keep existing customers happy. There are the exceptions, of course, especially among the larger players like Swinton and BGL Group, yet there is a feeling that the majority of regional and local businesses are missing a trick.

The arrival in the market of direct players, the internet, supermarkets and, more recently, the consolidators, have given consumers and businesses some serious alternatives to the traditional broker to consider; their ascendancy has also demonstrated how good marketing can influence how insurance is bought.

Michael Gaughan, managing director at FWD Marketing, which works with a number of brokers, says the sector must do more to promote itself: "Insurance is a necessary evil and people buy it because they have to. For years, clients just walked through brokers' doors. Things have changed since then.

"Brokers must nurture their relationships with clients to stop them shopping around and (they must also) talk to them more than once a year on the renewal date."

Gaughan adds that marketing is the best way for any company to show how it differs from its competitors and that there is room to add value to the process of buying insurance: "Traditionally, added value has meant selling products that the broker has, like legal assistance or breakdown cover, rather than something the client wants. People would prefer, perhaps, to know if they could call their broker at home should they have a crash on a Saturday night."

Gaughan says that the more switched-on brokers understand the need to look beyond traditional marketing such as advertising in Yellow Pages or the local paper, for instance by allocating pots of money to different types of marketing.

Steve Manton, chief executive at marketing and public relations firm M Consulting, contends that a broker must be clear about its business strategy for the medium and long term before it spends any money on marketing: "I always ask them what business they are after, what position they want in their market and whether or not they have a specialism they can exploit.

"We then discuss the differences between them and their competitors, so it does not come down to just encouraging people to buy on price. There are cultural differences in all companies that can be exploited in marketing to appeal to customers."

Before devising a marketing strategy, a broker's target audience should be segmented to work out who exactly would be attracted to what products. A broker needs a coherent brand identity also, which means a logo, identifiable company colours and a consistent message being conveyed through both on- and offline channels.

"Careful planning means that any marketing budget will be better spent because the money will go to the most effective medium, whether that is advertising, PR, direct mail, email or web marketing," says Manton.

M Consulting helped Sevenoaks-based Belmont International promote an insurance scheme for self-builders. The marketing budget was spent largely on creating a website, www.self-builder.co.uk, as well as buying and creating lists of names of self-builders around the country.

Another of the agency's clients is London-based Centor, which was told by management consultants that it needed to market itself better if the business was to grow. The company had relied traditionally on its strong sales team and cold calling.

Manton comments: "It was clear that PR was now important to Centor and that it wanted to raise its profile, first in the insurance trade press and then the general business pages of the newspapers."

M Consultancy helped Centor identify the brand values that could be exploited and conveyed through any PR activity; these included professionalism, passion, a high-quality staff and a commitment to training and the firm's clients. The company is also revamping its website and planning a targeted direct mail campaign to generate trade sales leads.

Attention

One company that has little trouble getting national media coverage is Swinton. It has made a corporate decision regarding PR to focus on the national and regional media and largely ignore trade magazines because, according to its PR team, the company is "inundated with requests for comment".

The company has recently appointed Mark Hallam as its head of marketing for personal lines. Hallam is responsible for promoting the company's quote-and-buy policies and its online brands, Its4me and bullseyeinsurance.co.uk; he is also supporting Swinton's 470 branches with their point of sale, directory advertising and direct mail materials.

It can be difficult to decide how much to spend on marketing - experts suggest that up to 20% of a company's turnover should be allocated to promoting a business. For brokers with limited resources, direct marketing is a cost-effective option because telemarketing, direct mail and email marketing can be more accurately targeted and measured than advertising or PR; companies can see the exact return on investment from the money that they spend.

Fundamental to the success of direct marketing is testing, which means asking a sample of your customers what they think about a special offer and seeing how they respond before rolling out a campaign on a larger scale.

Once a campaign is over, it is crucial that its success can be measured, so it is vital to set targets before starting. Points to consider include: how many new customer enquiries is it necessary to generate; how many current leads were converted into sales and; how many new visitors have arrived at the company's website? The goals put in place at the beginning of the planning process will dictate which media you use and how the marketing budget is allocated. Simply selecting the cheapest form of advertising is often a mistake.

BIBA has also realised the growing importance of marketing. The association has redesigned its online Find A Broker service, which helps consumers find a local broker; currently, the service receives 80,000 hits a year while the telephone helpline takes 50,000 calls annually. BIBA's communications manager, Leighann Burtrand, says its members receive more from the service: "Companies need to provide us with more information about what they offer so that we can promote the service and encourage even more people to use it.

"We provide general marketing support to members, including helping them with press release writing or drafting an advert."

An often-overlooked form of marketing is industry awards. Being able to claim that you are among the best at something and have third-party endorsement gives a company extra credibility when pitching for new business or when trying to retain existing clients.

Manchester-based Caunce O'Hara won the Most Effective Use of E-Business award at the UK Broker Awards 2007; the company's e-commerce website was singled out for its innovative use of technology to generate sales. The broker's non-executive director, David Schofield, says that between 10% and 20% of the company's turnover is spent on marketing. He remarks: "Entering awards gets the company noticed. It tells people that we are not the only ones who think that we are good at what we do.

"The website has been a cost-effective way to reach freelancers in many sectors such as management consultancy and engineering."

Schofield adds that the success of online marketing is easy to measure: "We know how many new people come to our site and how they navigate it, so we can change pages if it is needed.

"We also capture data on who the visitors are and what they need so we can up-sell and cross-sell products. More than 10,000 people have bought policies on the site."

The company also invests in sponsorship and is a backer of Manchester-based Sale Rugby club, part of which deal allows the firm to entertain clients at matches.

Schofield advises: "My message to other regional brokers is that marketing is vital. It is no use putting your head in the sand; you have to spend money to tell people how good you are if you are to thrive."

Behind enemy lines

A crucial part of any marketing strategy is being aware of what your competitors are up to.

The more you know about your rivals the greater the competitive advantage you can have when it comes to adapting and targeting insurance products.

Every broker should investigate its rivals' background, which products they offer that it might not, what are their pricing strategies, what markets are they in and even who works for them?

It can also be useful to talk to potential customers about how different brokers in the region are perceived. It might be that your company must address negative reputation issues that go back years.

Scanning a competitor's adverts and press coverage can reveal a lot about how they feel about their target market, which is something a broker can learn from.

Changes in a rival's advertising and how it is using different media can reveal details of new products or a change in business strategy which a broker might not have been aware of.

CASE STUDY - THE VALUE OF PR

Public relations is about protecting and promoting a business's reputation, however large the organisation. Frustration at not being asked to comment for articles about travel insurance, as well as irritation over journalists not understanding the company, prompted P J Hayman & Company to recruit a public relations specialist.

PJ Hayman was founded in 1990 and provides insurance for more than 400,000 people. It handles premium income in excess of £25m, yet its message was not getting across.

The company's business development and marketing manager, Andrew Williams, contacted the British Insurance Brokers' Association for advice on finding a PR agency.

Communications manager at BIBA, Leighann Burtrand, asked Hayman whether it wanted to focus on trade or consumer press and provided a list of relevant agencies. "I also told Andrew to talk to respected trade journalists to find out who they would recommend," she says. "It is good that members understand the need for PR because BIBA is always looking for case studies where brokers have added value to their service so we can promote the industry in the national press."

Williams and managing director Peter Hayman are currently studying a shortlist of agencies and will make a final decision over who to work with this summer; it is likely that a London agency specialising in financial services will be selected.

One of the new PR team's first jobs will be to raise the profile of Hayman's Free Spirit specialist scheme for people aged up to 85 with pre-existing medical conditions, on which Williams says: "We know this is a good product and we have plenty of case studies. We just need to get on the journalists' radar."

Haymans is also investing in search marketing to ensure that its website appears on the first two pages of search engines when people look online for travel insurance.

Brokers keen to find a public relations consultant can also contact the Chartered Institute of Public Relations, which has a free online search facility at cipr.co.uk.

AT-A-GLANCE MARKETING TIPS

One of the easiest ways for a broker to get media coverage is to write a press release telling journalists what the company is doing. Keep any announcement simple and interesting and ensure the information is sent to the right people at local newspapers and trade magazines:

- Tell the media what you are doing, how and when you are doing it and why.

- Write a snappy headline and sum everything up in a punchy first sentence of no more than 25 words.

- Try to include a third-party quote from an existing customer or industry expert to endorse what you are saying.

- Make sure you include your contact details and that you are available when a journalist calls.

Advertising and sponsorship are traditional ways to drum up business. Most brokers use local newspapers but, when choosing where to advertise, consider who will see the advert and whether or not they represent your target audience. All newspapers and magazines will provide information about their readership, known commonly as ABC figures or pen profiles.

The size of the advert is important: consider whether it would be more effective to have a small advert appear for a number of weeks or to make a splash with a one-off, large advert if you have a big announcement. You might also want to consider local radio advertising, which is extremely cost-effective.

Sponsorship can raise local awareness. Examples include putting your name and financial support behind a sports team or arts project, or branding an event. Research this area carefully to ensure that the choice of sponsorship is relevant to your business, while also making certain to combine any sponsorship involvement with advertising.

An effective website will work for you 24 hours a day: it can answer customers' questions, give quotes and sell policies as well as act as a public relations tool for the media.

A website must be kept up to date - it is a missed opportunity if it is nothing more than an online brochure.

Be clear about what you want your website to achieve, whether it is to inform people, find sales leads, conduct e-commerce, build awareness or to reduce other marketing costs.

Register a user-friendly domain name that reflects what your business is about and try to make the site as interactive as possible, as well as easy to navigate.

Investment in search marketing should be a priority. Talk to your web design agency about how potential customers use industry-relevant keywords to find insurance. The more relevant the words and phrases used as metadata by your site, the higher up the page listings on search engines you will feature.

AT-A-GLANCE MARKETING TIPS

Many businesses use e-mail marketing as a cheap way to promote themselves. The secret of this technique is to keep the list of recipients small and well targeted, for example by including the names of your top 50 or 100 customers only.

Personalise your messages and be clear as to why you are sending them with regard to your intentions of either improving customer loyalty or promoting a special offer.

Keep the content and design simple with few images, or spam filters could block your message.

Test an e-mail on friends and family to ensure that people can open it and think carefully about when you send your message to get maximum impact: avoid dispatching e-mails late on a Friday afternoon.

Any data that you collect via e-mail must be recorded and stored in line with the Data Protection Act (1998).

For advice on the Act, go to http://www.dma.org.uk/content/Pro-BestPractice.asp?grp=8.

Telemarketing can be intrusive but it brings rewards if handled sensitively.

An inbound telephone query can be converted into a sale and is a good opportunity to capture information on a customer's ongoing insurance needs.

Efficient telephone-based services make it easier to process orders, schedule appointments and handle complaints. Remember, automated phone systems can be annoying.

Outbound telemarketing and cold calling can be a lucrative route to new business, however, ensure your database of prospects is up to date and relevant to your specific insurance sector.

You must always screen any lists of phone numbers against the Telephone Preference Service and the Corporate TPS: the law states that you must tell people your name, give your contact details and explain why you are calling.

Direct mail is often referred to as junk mail but this is a misnomer because a letter is only junk if it is not relevant to the person receiving it.

If a letter is well targeted and includes information about a product or special offer that will save people money then it should be welcomed.

A letter has more impact than an email, so ensure that it is addressed to the most appropriate person. It is good to use testimonials from other customers and ensure that the communique bears a call to action, such as encouraging people to call a telephone number or visit a website to take advantage of a promotion. It is imperative that your company's contact details stand out and that some urgency in the customer's action is initiated, perhaps by including a short-scale, time-sensitive special offer.