Many agencies are not in sales gear 

Thankfully, we get a lot of requests to create marketing communications tools.  Direct mailers. Print and TV ads. Brochures. Web sites.  Unthankfully, we often draw blank stares and silence when we ask three basic and essential questions:  

“What do you want to make happen?” 

“Who are your target prospects?” 

“What are your sales metrics?” 

Agency principals who can’t answer these questions are really not in sales.  They may be in the service business, but they are idling in neutral when it comes to sales and new business development. 

And, unfortunately, the odds are high that they will waste two valuable resources---money and time---if they mount a sales campaign without specific answers to the three basic questions. 

Sales metrics are a critical success factor 

If you know your sales metrics, you can work backwards to determine your target prospects and what you want to make happen.  We call it a REVERSE Marketing Action Plan (MAP). Basically, sales metrics are result of knowing your numbers---tracking of how and where you get new business; how many leads the media you use produces;  how many leads you need to produce x sales presentations; how many sales presentations you need to produce y closes, i.e., new customers.  

Example:  REVERSE Marketing Action Plan (MAP) 

Market: Single Family Homeowners

Marketing Communication Program:  Direct Mail to Prospect List

Objective: 100 new customers 

Agency Sales Metrics: 

. SALES  PRESENTATION Closing Rate: 50% 

. # LEADS to SALES PRESENTATIONS needed to produce 100 Customers:  200 (50% x 200) 

. Direct Mail/Follow-up experience: 10 LEADS per 100 PROSPECT mailings (10%) 

. # PROSPECT Mailings needed to produce 200 LEADS: 2000 (x 10%)  

Completing the Loop:  ROI 

If you know the average premium and average commission rate for your HO business, and you know the cost of your direct mail marketing program, you can now easily calculate your Year One ROI for the DIRECT EXPENSE (not counting manpower time and overhead expenses, etc.) 

. Direct Mail Expense: 2000 @ 75 cents per unit, including postage:  $1500.00 

. Homeowner Premium Average: $400.00   

. Commission Income: 20% x $400.00 = $80 per new policy 

. 100 New Customers x $80 commission income = $8000.00 

. ROI on Direct Expense: $6500 Year One (over 5:1 ratio) 

. Agency’s Average HO Customer Retention: 7 years 

. Lifetime Value of New Customers: about $55,000