An Ad Campaign that Worked

Richard Taylor | Grant-Hatch & Associates | Salt Lake City, UT 

To advertise or not to advertise - that is one of the questions insurance agents and brokers have asked themselves forever. You either believe in it or you don't. There is no in-between.

We happen to be an agency that believes in advertising and have allocated a healthy portion of our annual discretionary budget to promote the advantages of doing business with Grant-Hatch to prospective buyers, as well as our present customers. We especially want our current clientele to feel comfortable doing business with a professional and successful firm.

We look at advertising mainly as name identification. When we put up billboards along the freeway system, or do a series of television ads, we don't expect people to come pouring in the door wanting to buy an insurance policy. What we want is to project a feeling of professionalism and name familiarity so that when the time comes when a perspective purchaser of insurance is ready to buy or is shopping, the name of Grant-Hatch will come to the forefront. In addition, we advertise so that when one of our producers calls on a prospective client, they already know that we are insurance agents and brokers, and not selling fax or copy machines.

We always advertise in tandem. That is, we use two mediums of advertising at a time. We have found this to be much more effective then one medium alone. For instance, we have had a one-half page ad in the Yellow Pages forever. It has been a good source for us (mainly for Personal Lines), but when we combined Yellow Pages with outside billboards, our identification and call-ins multiplied three times overnight.

We are doing some 15-second TV ads (sponsoring the "Wall Street Journal Report" every morning), and it has been very good for us. The eight ads we use are professional, graphic, snappy, and simply say, "Thinking insurance? Think grant-hatch, the insurance professionals" - that is the only message we are trying to get across. We don't even put our address or telephone number in the ads. They are effective, but when the TV station put a large ad in a local weekly business newspaper with our name in it as the sponsor of the Wall Street Journal Report (as a part of the package), the response doubled.

You need to be careful to use advertising dollars wisely and to "couple" media types that fit, but we are firmly convinced that it works. This doesn't mean that more always means better. I wouldn't think of using TV, radio, print, Yellow Pages, billboards, and direct mail all together . . . it might work in a small town, but in most places like our marketing area, the cost would be prohibitive and unproductive. 

John Farr | Arrow Insurance Management | Frisco, CO 

Advertising bombards every one of us every day from a multitude of sources, everywhere from vehicles to billboards. Newspapers and advertising papers abound. Radio and TV beam us up. Phone books, direct mail, place mats at fast food outlets, and pens all pass us a message. Stores have banners, displays, and promotions, and every single product has a label, wrapper, or box around it in an attractive, attention-getting, "buy me" message.

How does an insurance agency compete with this blizzard of information? The answer is that you have to be very careful because the only winner may be the advertising salespeople! Advertising pays when it sells something! We do not believe that just getting our name out is worth much.

Also, advertising only registers with people in need or want of a particular product. Look how big-ticket items such as cars are advertised. Auto ad execs tell me that only 10% of the public is buying a car at any one time period. So they are really advertising to only one person in 10!

Advertising has to have some impact and a way of getting a message out that has some long-term follow-through. Here is an ad that our agency did in a low-budget way in a community saturated with advertising media with a population of about 20,000 people.

We are a resort community in Colorado. One of our goals is to sell both short-term and long-term Health insurance.

We use a regional company for Health insurance. They have a small co-op ad program. Our ad campaign covered several months, cost $1,240, and resulted in about $75,000 new production. We would have had some of that production without advertising. We sponsored a radio program for nine weeks on a local station at a cost of $100 per week. It featured three spots a day that stated, "Arrow Insurance, The Insurance People, is your agent for Health insurance." Each Friday we sponsored a program that featured a local citizen, gave his or her background, and played music that that person grew up with. The disc jockey gave us spots during the show, plus three one-minute commercials that I recorded, which ran from late July until early September.

In October we took out an ad in a special section of the local newspaper on medical services - half was an ad and half was a written column. The ad cost $250. The section is distributed with the paper and an additional 10,000 copies go to newcomers, medical clinics, and medical providers in the area. It has a longer life than the daily paper. Sections like this are a good place to advertise because they attract attention and have a slightly longer shelf life.

Lastly, we printed 5,000 stuffers for $90 to put in our outgoing mail to customers. This started in November and will run until spring. It is really a reminder to our own customers about what we sell and to reinforce the other advertising. That will help the word-of-mouth advertising, which is the best and cheapest advertising of all.

The company split the ad cost on the radio with our agency. Our out-of-pocket cost was $790. Our return on the investment was about 10 times that amount on a direct basis.

Health insurance generates about 15% of our agency commission income today. We think that the health field will have a great deal of attention in the next few years, and we want to be positioned to have people think of us as the Health insurance source. Our one rule is that the ads have to generate business income to the agency now.