Exclusivefocus Spring 2013 - National Association of Professional ...

sales and marketing
Reinventing an Unloved
Marketing Strategy
By Scott Brodbeck
Have you ever heard that direct
mail is one of the worst ways to
spend your marketing dollars
With an average response rate between
1 and 2 percent, it would be difficult to
argue that the rate of return justifies pursuing
this form of marketing. It would
be even more difficult to advocate using
direct mail as your primary method of
marketing, but that’s exactly what this
article will attempt to do.
Before dismissing this idea and moving
on to the next article, let me clarify
a few things. I agree that direct mail in
general isn’t a very good way to market
your business, but the reason response
rates are so low is because direct mail
usually takes a carpet bomb approach
in order to reach as many prospects as
possible. As a result, the vast majority
of people receiving a solicitation from
you aren’t aren’t likely to be interested in
whatever it is you’re selling, and depending
on what your mail piece looks like,
they may not even open it.
Therefore, instead of using the saturation
method, where everyone in a particular
geographic area receives your direct
mail piece, it makes more sense – and
costs less money – to gear your marketing
efforts toward prospects who are most
likely to be interested in what you’re selling.
This is referred to as targeted direct
mail. Ideally, you want to find a group of
people who either are looking for what
you have to offer or who are open to
hearing what you have to say.
Let’s think about that from the perspective
of a landlord who owns multiple rental
properties. When all the properties are
rented to stable tenants who pay their rent
on time and rarely call with maintenace
issues, the landlord is on top of the world
and any issues associated with the properties
are not top of mind. But when a tenant
moves out, the landord’s relaxed mindset
suddenly shifts to “dealing with a vacant
property.” This means making repairs,
slapping on a fresh coat of paint, advertising
the property and showing it. Every day
without a tenant is a day without rental
income, but that’s not all. Continuing expenses,
such as taxes, mortgage payments,
insurance and utilities must be paid, as do
costs to make the property rentable again.
Could there be a better time to approach
this individual about saving money on their
property insurance I think not.
I’ve always been a fan of the Landlords
Package Policy (LPP) – not because the
premiums are the best in town, but because
the multi-policy discount for having
home and auto is pretty substantial in
many states. Typically, local newspapers
run ads for house rentals, which almost
always include the landlord’s telephone
number. What if you cross-referenced
the phone numbers to find out the mailing
addresses of each landlord Presto,
now have a mailing list of landlords who
may be at their most vulnerable – when
their expenses are high and who are in
the throes of finding tenants. It is beyond
the scope of this article to go through the
logistics of transforming phone numbers
to addresses; but it can be done if you’re
tech savvy and if not, you may want to
consult a tech consultant.
Now let’s move on to targeted homeowner
opportunities. Many people buy
their property insurance from their car
insurance agent and never give it a second
thought. Sending a letter out of the
blue to someone about their homeowners
insurance will likely result in the normal
1 to 2 percent response rate. But if you
specifically target homeowners who are
coming up on the anniversary of their
purchase date, and if you have a quote in
their hands prior to the receipt of their
dec sheet, you will significantly increase
the likelihood of a response. Keep in
mind that many policies are billed to the
mortgage company. This creates a couple
of obstacles: the first is that you must time
your mailing so it arrives before the motgagee
pays the premium, and the second
is to get your prospects to pay attention to
what you’ve sent them.
When mortgage companies pay the
premium, policyholders don’t tend to
notice rate increases because they aren’t
the one writing the check. When they
receive a notice that says, “Do not pay,
mortgagee has been billed,” they typically
file it away, oftentimes without ever
looking at the premium. Your job as a direct
mail marketer is to give them a reason
to shop. Send a mailing that makes
them question their existing coverage
or policy premium. For example, what
if your mail piece asked, “Will you see
a $20 to $50 increase in your monthly
mortgage payments because your homeowner
insurance rates have gone up”
The idea is to pique their interest with
an attention-grabbing headline.
The new House & Home product
has rates that have disappointed many
agents, and true to form, the company
has continued its tradition of putting the
majority of the insurance buying public
into non-competive IS scores, leaving
only a tiny segment of prospects with
a competitive rate. However, there is a
better than average chance that those
in this segment live in close proximity
to one another – in neighborhoods
with higher than average credit. Your
34 — Exclusivefocus Spring 2013