Return on Investment – Problems and Their Ways Out

A lot of an insurance marketing agency plugs along, struggling by each and every year they manage to exist and the point is that there is a huge problem and it is that no prospecting plan exists. Finding out the return on investment (ROI), is a critical step before an agency market plan can be done.

You see, to implement a prospecting plan without maximum benefits will cause damage to a rising insurance career. Actually, this planning must be preceded by calculating your return on investment. The other fact that should be taken into consideration is how much it is going to cost to make a sale, or what time and cash investment is necessary to contract a producing broker. You cannot afford to just break even and that is why you should analyze your prospecting methods in order to make sure that an income profit is provided with executed sales.

How to determine the return on investment?

The first step to be done is to figure out how many in physical dollars and time dollars it is costing you to obtain a producing broker. Then it is necessary to determine what is termed your agents Lifetime Customer Value. It is calculated by how much money a broker will provide you over a three-year period. By analyzing your present writing brokers, you project this and average their past net value to you.

The other important fact to mention is that the ROI is usually a single digit number. For example, if your ROI is 4, it means if you spent $3,000 on a certain marketing recruiting plan. In a similar manner if you learned how to increase your ROI to 5, you would have the same $3,000 investment, but now the return would rise to $15,000.

It is important for you to keep in mind that in the case you are using an unrefined list of agents to phone call, 30% are overly captive, like the heavily yellow page advertisers representing Allstate, Farm Bureau, and numerous like insurers. In addition, of the remaining 20% are too inexperienced, plus add another 5% to 10% as being life licensed stockbrokers, telemarketers, and home office personnel, so, this leaves 40 to 45% of which half might have the slightest interest in your particular product. But you should also know that the 55% of residential phone numbers are on the do not call list, similarly at least 60% of the phone numbers you might obtain are home phones. A phone campaign killer is also the fact that it is illegal to cold call agents on their cell phone numbers. The point is that some of the highest quality agents do not use an office number, and reserve a cell phone number exclusively for their insurance business matters.

Let’s have the optimistic example. Imagine your income at $100,000, which equates to $40.00 per hour. So, as the initial investment is cheap, you elect to do call calling prospecting to recruit agents. Keep in mind that because of no answers and wrong numbers you will reach 10 agents per hour. Only two of the 10 could have a remote interest or meet your qualifications. Assume that you have 5 days, 5 hours each devoted to phone soliciting and using these figures, you complete 250 phone calls. Of the 50 with a remote interest, say a high figure of 2 actually sign a contract. One of these produces an average amount of agency business, the other broker none. As a result you will have your total time expenditure of 25 hours at $40 an hour, plus 2 hours contracting time equals $1,080.00 and it could be said that this is really a good result to get

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