Insurance Agent Forum

[WIN]

Great post Dan.

[jaugusta]

That is a lot of really great info. Thank you for taking the time to write all of that.

[Markingriffin]

Thanks DJS, very good post.

[burnt]

I am interested in doing some direct mailings for MP and FE. Any reputable companies you guys would recommend? What should I expect in pricing? Do you recommend doing first class mail? Any other suggestions are extremely welcome. Thanks

[somarco]

Dan's situation is unique and may or may not track to other lines of coverage.

HO insurance is required if you have a mortgage. Auto is also required by most, if not all states. Beyond that, auto & HO insurance are "demand" products, meaning that, consumers will voluntarily look for the coverage even without the mandates.

Health insurance is not required (in most jurisdictions). While it is a demand product roughly 17% of the population lacks health insurance. Granted, most of those are children eligible for SCHIP, adults eligible for taxpayer funded health cover, illegal aliens or young adults who simply choose to opt out of the system.

Health insurance is part of the job for roughly 40% population while auto & HO is NOT part of the wage package.

While your market for HO & auto is virtually 100% of the market your ideal target for health insurance is less than half the population.

Auto, HO and health insurance are demand products.

Life insurance (in various forms) is not. It is not a product someone thinks of on a regular basis where the other lines of coverage are.

Dan's approach works well for him and his market. If he mails 1000 pieces a week at $0.60 each including postage he is investing roughly $3,000 per year in order to write about 500 new policies a year.

Even if his commission is only $100 per policy that is $50,000 in new commissions.

Those are great numbers.

This is not to say his method will not work in other markets, but you have to know your market and know how to target those who have a demonstrated interest in your product and a desire to purchase.

[djs]

Somarco - you summed up my point pretty well. You have to know your market, you have to know how to find your market.

I could blanket everyone with a homeowner quote. My mailing would fail miserably. I would end up with renters, vacant houses, foreclosed properties, etc, all driving down my response SIGNIFICANTLY. Instead, I pay a pretty penny to know who to send my quote to, and when to send it.

The same is true with health or life insurance. You have to find a way to know when events occur that may put someone in the market for these products. There are some obvious things (especially for life):
- New home purchase
- New child
- Recently married
Etc...

You can get these lists. You just have to know you're market well enough to know what gets them motivated and then find a way to approach that event with a solid call to action.

I only actively market health insurance to my P&C clients. it's a decent cross-sell. I don't actively market health to the masses because I have tried before and haven't done as well, though I have to admit, I've learned a LOT since the last time I tried many years ago.

My direct mail campaigns have replaced buying internet leads for me. The ROI in my area for internet leads tanked a while back (and my desire to push that hard for sales tanked as well). My ROI for direct mail, which I initially assumed would be negative, has turned out to be pretty decent.

My lesson learned in this was direct mail works, but only if you really have a plan on how you are going to work it. Okay, I guess the same can be said about every marketing system.

Dan

[somarco]

I pay a pretty penny to know who to send my quote to, and when to send it.

This is a key to any marketing effort.

You need to know who your market is and how to locate them. It doesn't matter if you are doing direct mail, email blasting, passing out flyer's or business cards, or cold call telemarketing.

Sure, a blind squirrel finds a nut but that does not mean it is effective.

Dan, care to share the source of your mailing list?

[djs]

My source is easy, it's public records... This is why I do homeowners.

I subscribe to Haines (you may have heard of the Criss-Cross directory), which allows me to pull a list of homeowners that claim the homeowner exemption (i.e., the owner lives in the house), and where the tax bill is mailed to the same address as the house (or else they don't actually live there). I sort out houses that have purchase anniversaries 2 months away, since homeowners policies are usually paid annually, on the anniversary of when they bought the home, and then limit everything to the last 5 years of data, since beyond that, returns drop off the cliff.

This also gives me access to pull the home characteristics (year built, size, style, etc) so I can run my quotes. I delete very large houses (over 5000 sq ft), anything not single family, and homes built before 1950. I can write all of these, but they don't work well for mass quoting and generic mailings. Yeah, I have to make up some info to develop the final dwelling coverage, but I use generic information that won't alter the end result much.

That's it. Sounds so simple when you say it. It's taken about a year to almost perfect the system. It's a lot of parts to pull this together.

The thing about direct mail is don't try to do everything, shoot with a laser, very focused. If I sent out a mailing that said something to the effect of:

Need Insurance? Call me!

my response would be almost 0.000001%, on a good day. Instead, I limit as follows:

- The county thinks they are a homeowner. Currently, the bank may think otherwise though.
- The county thinks they live in the house. This is crucial, it is the market I am after with this mailing.
- The bank tells them they have to have homeowners insurance, good 'stick' for motivation. Most want homeowners insurance anyway.
- The timing SHOULD be relevant to them. This is guesswork, but it works pretty well.
- I provide a 'carrot', an actual quote based on their house, not some random generic thing. While I'm not a big fan of blanket quotes that may not be accurate, it makes the person realize the value I can bring to them. Unless public records are wrong, my quotes are pretty accurate as well.
- I am a professional. I mail like a professional. I don't handwrite letters to try to get someone to just open the envelope, I want them to open it and think of me as a professional. Open rates are meaningless. Response rates start to have meaning. Close rates are close. A profit is what I'm after (an actual ROI).

Dan