Acquiring a new customer is expensive. In 2014, Adam Klauber, an analyst from William Blair & Co., an investment bank and financial services company, determined that direct insurers paid an average of $487 to acquire a customer, captive insurers paid $792 on average, while independent agents paid $900 per customer.
Whether your agency generates leads organically through advertising or via channel relationships, it takes a significant amount of resources. With such high costs, it makes sense to pay attention to the steps your buyers take and how you can manipulate their steps to your advantage.
One way to immediately improve sales at your agency without investing significant amounts in marketing is to improve the way you sell. To improve, you have to understand the way your customers buy and understand the actions your team is executing to make a sale.
The Buying Journey
Given the level of competition and the number of ways insurance providers can market insurance, every insurance buyer takes a unique journey to find their way into your sales funnel, which means that no agency can rely on just one lead source. Also, not only do independent agents have to compete with captives, new coming digital agencies have their eyes on your book of business, as well.
However, there are a few universal stages that new customers go through when they interact with your agency’s brand as the battle for your prospect’s attention begins. Before a prospect knows who you are, they must gain an awareness of your agency to start a casual relationship with your agency. This is when they realize they have a problem that your agency can solve.
After your prospect realizes they need insurance or has a question about their current policy, they enter the next stage: conducting research and expressing interest. During this consideration stage, the prospect engages your team with a mental image and preconceived expectation based on how they became aware of your agency. Were you ranked high on Google? Do you frequently send mailers? The channel that generated the lead determines how they’ll come in contact and express interest in your offer.
In the final stage of becoming a customer – the decision phase – your buyer has fully realized the problem, raised their hand and expressed interest in resolving the problem, and is actively ready to take action and make a purchase. This is where you present rate comparisons and reinforce the reasons to work with your agency, such as service guarantees and testimonials.
How your customers travel from not knowing you to becoming a customer is the buyer journey. By understanding every stage of the buyer journey, your team’s ability to influence potential clients will be greatly increased.
Lifecycle of a Lead
Your lead lifecycle impacts your agency in two ways. It determines how leads are managed through the awareness, consideration, and decision stages, and provides the basis for improving yours sales funnel. By aligning your marketing strategy with where your customers fall on the buying journey, you will have the necessary information to deploy your sales resources more effectively so that your phone rings more often and you win more of those customers.
There are six stages to a lead lifecycle, which fall into three phases: the top of the funnel, the middle of the funnel and the bottom of the funnel. The phase defines whether it is the responsibility of marketing or sales to interact with a customer and determines the actions your team can take to successfully move the lead forward.
Top of the Funnel
Top of the funnel prospects are in the awareness stage of the buyer journey. Top of the funnel tactics are largely the responsibility of your marketing team where the overall focus is to increase the number of prospects who find and consider your agency. Generating new awareness among prospects provides sufficient selling opportunities for your sales team.
Stage 1: The first stage in the lead lifecycle is the prospect. Prospects are represented by your web visitors, email subscribers, foot traffic and any other person who comes across your agency. The job of marketing here is to make sure your agency is found. The way to be found is to have an omnichannel presence that puts you in the places where your prospects are likely to see you. In today’s day and age, with the increasing digitization of commerce, it’s smart to build a large presence on the most popular digital platforms.
Stage 2: The second stage in the lifecycle is a marketing lead. A marketing lead is a prospect who has come across your agency’s marketing content and has been made aware of the problem your agency can solve. The job of marketing here is to convince the prospect to reach out by presenting them an offer with a call to action, whether via TV commercial, mailer, online ad or radio ad. Once the customer has expressed interest, they move to the middle of the funnel.
Middle of the Funnel
Middle of the funnel leads are in the consideration stage of the buying journey. This is where the customers consider your agency while your team qualifies prospects. Middle of the funnel leads are filtered by marketing for fit and routed toward sales where they are further qualified based on timing.
Convincing prospects to consider your agency requires effective lead nurturing and lead management. This way, leads are effectively qualified and quickly routed toward your sales team. This maximizes sales performance by ensuring your sales resources are invested in customers who are qualified.
Stage 3: The third stage in the lifecycle of an insurance lead is a marketing qualified lead (MQL), which is a lead that has a problem, expressed interest in the offer and can be viably quoted. The job of marketing is to answer these questions by capturing and processing customer information.
Marketing can push MQLs onto the next stage by capturing customer information leads while determining if the lead is ready to buy. Here is where your marketing process makes a turn into sales functions.
Stage 4: The fourth stage in the lifecycle is a sales qualified lead (SQL), which is a lead that your sales team has accepted as worthy of direct sales follow up. Qualifying a lead at this stage is determining if the buyer is viable and in the market for a solution. An SQL is a lead who is ready to be quoted. At this stage, the goal of the sales team is to nurture the relationship through education and to provide relevant pricing.
Leads that fail qualification are disqualified leads (DQLs), which are leads that your agency will not be able to help at any point in time. The marketing team’s job is not to pass these leads forward to sales, but to cease all marketing communications and remove them from these systems.
Additionally, recycled leads are leads that your agency can potentially help but is not yet ready to quote. These can be new leads or opportunities with current customers. The job of marketing is to periodically increase awareness among these leads and decide whether the leads should receive a quote. Leads can be recycled by sending relevant marketing ocllateral.
Bottom of the Funnel
Bottom of the funnel leads are in the decision stage of the buyer journey. In this stage, the goal is to convert sales qualified leads into sales. Bottom of the funnel leads are solely the responsibility of your sales efforts. Getting a YES decision from your customers impacts your agency by driving new business revenue.
Stage 5: The fifth stage in the cycle is an opportunity. An opportunity is a lead that has a problem and currently considering your solution. The job of sales is to document this relationship in your AMS and convince the lead to form a relationship with your agency by buying your product.
After qualifying the customer and providing them with a quote, the only job left is to seal the deal. Here, the job of the sales team is to provide testimonials and reviews to convince the prospect to become a customer. In this stage, sales can be augmented by streamlining the binding process and onboarding customers into a process that educates them about all of your services.
Stage 6: The sixth stage in the cycle is a customer, which is most likely your favorite stage. This is when your prospect has completed the cycle. Sales has onboarded your customer and introduced them to your customer experience. This is the point where you satisfy your customer and, given how important it is to acquire new customers, leverage this customer into a raving fan of your agency.
A raving fan is a customer who leaves a review, engages with your online content and refers you to their friends. Creating a raving fan is a job for both sales and marketing. Marketing can do a better job of pinpointing and targeting customers with the potential to become a raving fan. While on the other hand, sales should provide high-quality services and convince the prospect to tell a friend.
Acquiring customers in insurance doesn’t have to cost an arm and a leg. But by improving the way you handle the leads you’re already generating, you can boost new business revenue fast. Audit your actions at every point to align your sales and marketing resources with the way your prospect wants to buy.
Article By: Cam Bob III