Why Your Last Direct Mail Campaign Flopped … And One Strategy Guaranteed To Produce Better Results With Less Effort
Jeremiah Desmarais is the award winning Vice President of Marketing at Norvax. He and his team have won 3 awards in 2006 for their marketing initiatives that touch Norvax' client base and carrier relationships on a daily basis. He is author of several white papers, and has been a contributor to the Agent's Sales Journal, Health Insurance Underwriter as well as a guest speaker at various carrier events and workshops. He is a member of the Society of Industry Leaders. He welcomes feedback at firstname.lastname@example.org
by Jeremiah Desmarais, Vice President, Creative & Marketing
Editor's Note:The following article has been reprinted with permission from Norvax. Any questions regarding copyright information pertaining to this article can be directed to Erin Williams at Norvax, Inc. She can be reached at 312.226.0027 x8241.
So your last direct mail campaign didn't produce the results you were hoping for. Turns out you're not the only one. Why are insurance agents pouring record dollars into a direct marketing strategy that's losing its punch?
The Direct Marketing Association recently reported that response rates for lead generation direct mail are at a low 1.43 percent–down from 2.09 percent in 2004 and 2.48 percent in 2003. These poor rates are coming in at a time when the financial services industry is dumping a record $2.6 billion into direct mail.
According to an AdAge report, these direct mail woes stem from consumers turned off by mailboxes overflowing with financial solicitations. Is your direct mail piece getting lost in the shuffle?
What you should consider before your next direct mail campaign
One study doesn't mean direct mail is dead and insurance agents should abandon it entirely. But it does mean now is a good time to evaluate its cost–effectiveness.
Ask yourself: How much did I spend on my last direct mail campaign? (this includes design, printing, postage, admin costs and cost of mailing list if you purchased or rented one.) Now ask, how many leads did my mailing generate, and even more importantly, how much business did I write as a direct result of this campaign?
Do the profits outweigh the costs enough to justify the effort? Or are you just barely breaking even?
If your campaign results are weak, you may want to consider a new marketing strategy that picks up direct mail's slack.
Can Internet leads produce better results for you?
More agents are turning away from costly direct mail campaigns towards the Internet for lead generation. Consider the difference:
- Interest. The best prospects are ones that need your services and are interested at the time you make your targeted offer.
- Direct mail: The prospect receives your unsolicited mailer amongst all the credit card, banking and loan offers crowding their mailboxes.
- Internet: Good Internet lead companies supply you with prospects that are actively searching the Internet for insurance using popular search engines. The lead has requested an insurance quote and is waiting to be contacted by you. Plus, by choosing a lead company that allows you to create your own ideal lead profile, customized by zip code, number of dependents etc., you can focus your dollars on just the leads that meet your sales criteria.
- Speed of contact. Every minute that passes, your prospect loses interest in your offer, and gives your competition room to snatch the sale from under your nose.
- Direct mail: You have to wait on prospects to take the initiative to either call you or fill out a business reply. It can take days before you have a chance to speak with the prospect.
- Internet: You get the lead sent to your inbox the second the prospect clicks the 'submit' button for a quote. You can contact them before they even close their browser. If you have a quote engine, you can generate a proposal in 60 seconds, e–mail it to your lead and be reviewing plans together on the very first phone call.
- Follow up. Agents need an efficient follow up system or they risk being bogged down with admin work or worse, have to let leads slip through their fingers without even contacting them.
- Direct mail: You have to manually enter a direct mail lead into your database or filing system. This can waste hours of precious admin time, plus quickly locating prospect information is difficult.
- Internet: Some lead companies offer complimentary lead management systems that automatically import your leads' information, saving you valuable admin time. You're able to prioritize for follow up, sort and track all your leads from one secure online location that is accessible from any computer. Plus, some lead management systems even offer one–click quoting based on the automatically populated lead information–meaning it only takes seconds to generate an e–mail–ready proposal.
- Return on investment. This is really what it's all about.
- Direct mail: More important than your response rate, what was the ROI of your last direct mail campaign? With postage prices continuing to climb, it's getting more and more expensive to send out large mailings.
- Internet: How does 500% ROI sound? Because Internet leads free you from generation grunt work, you can spend all your time selling. And because leads are affordable, often for just $5 – $6 apiece, they open up the door for greater return on investment. Making just one good sale off an Internet lead can cover the entire month's investment.
- Guaranteed generation. To keep the profits coming in, your lead sources can't run dry. An unreliable source means you are always worrying about where your next lead will come from.
- Direct mail: A lot of variables affect the response rate you get from direct mail, including how interested the people on your list are in what you're selling, down to the design, copy and call to action. Missing the mark on any one of these can stunt your response rate, and leave you scrambling to find leads.
- Internet: Purchasing Internet leads puts you in control of a steady lead supply. When other sources run dry, you can count on Internet leads being delivered to your inbox daily. Some companies also allow you to set adjustable daily and monthly limits, so you're not managing your lead budget in the dark.
- Don't cross your fingers and hope your next direct mail campaign will produce the results you need to build your book. Internet leads provide you with a steady stream of business while taking the guesswork and effort out of lead generation.