MARKETING WITH PEANUTS
by Pamela Grieman
Some agents spend a lot of money to include expensive gifts with their direct-mail packages.
Not David Meilahn, president of The David Agency, Inc. in Oak Park, IL .
Meilahn's agency 'spends peanuts' to get prospects' attention. And it works!
The agency took part in an experimental program-in league with the St. Paul Insurance Co.-to target-market banks and other financial institutions. The agency includes a small bag of peanuts with a marketing letter, which begins:
'Why am I sending you a bag of peanuts?
'I wanted to point out that there are many financial institutions today that literally are risking their companies to save a few dollars on insurance premiums. By the time they discover that 'the sweetness of low price is long outlived by the bitterness of poor quality,' it often is too late.
'I realize you have a demanding schedule, but I am asking you to invest half an hour with me to begin exploring with you the adequacy of your coverage. In today's litigious society, the consequences of not having the most comprehensive protection can mean big problems with regulators . . . or worse.'
The letter presents the agency's expertise in the field, and lists some specific ways it can help the addressee. One of the keys to its success lies in the agency's connection with the insurer: 'Unlike the competition, underwriters will personally visit with you to tailor-make a value-added comprehensive program for your needs. For example, they will review your internal risk management controls based on what they have learned from working with other financial institutions . . . both large and small.'
The letter asks the recipient to return an enclosed business reply card or call to arrange a no-obligation, introductory meeting, and ends with this zinger: 'We can demonstrate the risk management techniques that will help you avoid the pitfalls other financial institutions have encountered because they were trying to save 'peanuts' on their insurance coverage.'
This is followed up by a phone call three to five days later. If unsuccessful, another letter (see below) is sent with a $2 bill, asking the recipient to return an enclosed survey. Again, the letter is followed up by a phone call three to five days later.
There are variations on this theme. Some letters include a calculator, announcing that The David Agency has 'a difficult equation for you to compute.' It asks, 'How much could inadequate Business insurance cost your financial institution?'
Other letters offer a magnifying glass and invite the recipient to 'take a closer look at your insurance coverage.'
According to Meilahn, the agency has seen a remarkable improvement in the response rate-more than double the normal rate. He adds, 'There is no substitute for verbal interaction between producer and prospect, but never underestimate the power of these gimmicky ideas to make the introduction.'
Maybe some of these gimmicks can work for your agency, too.
$2 LETTER
Dear [client]:
Please use the enclosed $2 bill however you would like and return the short survey we are asking financial service executives to answer. It's only 12 brief questions about business insurance.
We need your opinions because at The David Agency, we specialize in insuring financial institutions. Our agents and the experienced underwriters for leading companies we represent want to get your feedback about adequate coverage in today's litigious society.
We recently sent you a bag of peanuts as part of a direct mail package discussing how some executives are actually risking their businesses for 'peanuts' in this litigious environment.
Please take a minute to complete the brief survey enclosed. It will help us determine how financial service executives feel about today's business insurance issues. Thanks for your cooperation.
Best wishes,
[Your Name]