We continuously strive to help agents grow their practice through proven prospecting and business management programs. During our initial meetings with agents from all across the country, one of the main questions we ask is, "What's your annual marketing budget?" This is a pivotal question and the answer we hear is telling.
You see, many insurance agents either don't have a marketing budget, or don't realize how important it is to their overall success and income. I remember over 20 years ago when I entered the insurance industry the way you got started in this business was with a 100-person list. You wrote down as many people as you knew, and you called upon them to see if you could pitch them a product, or potentially refer you to another friend, neighbor or co-worker who you could pitch a product to at their kitchen table. While this isn't a bad strategy, it's not a marketing plan, it's a sales plan.
If you've already identified a specific prospect, then you're working a sales plan. Marketing comprises the strategies, techniques, and activities that attract a prospect to your firm. Once you have a prospect identified, the marketing plan transitions to a nurturing plan or a sales plan. After all, the end result of marketing and nurturing is to put yourself in front of someone who potentially needs your assistance, and is someone you can ultimately help.
Setting Your Marketing Budget
Let's look at a very well-known, established business because it tells a very compelling story. McDonald's is one of the largest restaurants in the world and in 2012 the company spent $787 million in marketing. While this is an absolute astronomical marketing spend, the average McDonald's franchise makes about $2.6 million in revenue while the average Burger King only brings in $1.2 million. According to experts at Forbes the difference is attributed to the larger marketing budget and better efficiency at McDonald's, not necessarily a better product. Worldwide revenues at McDonald's in 2012 were $27.5 billion with a Net Income of $5.4 billion. So the company spent $787 million to earn $5.4 billion. From where I sit, that's a pretty good Return on Investment (ROI). The company invested $1 and after operating expenses got back $5 dollars. Not bad, right?
As a financial professional it's important that you establish a monthly amount to grow your business, but you also need to invest it into prospecting programs that generate results. One of the biggest prospecting opportunities today is workshop marketing. Why? Because it works.
So where do you start when it comes time to establish a baseline for your marketing budget. Well, it's best to think if it in terms of the revenue you want to generate. We suggest for every $100,000 of annual revenue you’d like to generate, you should be prepared to spend approximately $20,000 on marketing. If your revenue goal is $100,000, your monthly marketing spend would be $1,670, which is the equivalent of about one workshop every quarter. If you want to generate $500,000 in annual revenue you should be prepared to spend $100,000 in marketing, or $8,334 per month, which more than covers one workshop every month.
Over the past three years, we've been helping financial professionals who were conducting workshops and other prospecting activities with first establishing an appropriate marketing budget, but more importantly helping them with their business efficiency. If your prospecting activity generates 20 prospects, and you convert 2 of them into clients, that'd be about average for our industry. What our business management and coaching program called Consistent Advisor does is helps you transition more of those prospects into clients.
In fact, we are so confident that Consistent Advisor will increase your sales, we provide you with a double your production guarantee. If you sign up with Consistent Advisor and we don't double your production in 12 months, we give you back everything you spent on the Consistent Advisor program. How can we do this? Because the financial professionals we've been working with have been seeing a better ROI than McDonald's. The advisors that choose to follow the Consistent Advisor process typically spend $1 and earn back $7. Plus, our Consistent Advisors transition more of their prospects into clients and more of those clients actually refer more business!
If you don't know how to establish a marketing budget, sign up for a 30-day free trial of Consistent Advisor. We'll assign an accountability coach to help you through the entire process. If you want to be successful and reach a new level of success then you should take a few minutes right now to sign up for Consistent Advisor.