Here are some steps for determining the ROI of your insurance marketing efforts:
The Customer Lifetime Value, or CLTV, measures how much a customer relationship is worth to your company, from beginning to end.
But how do you determine the overall value of a single customer relationship over time? There is a formula to estimate what that might be for your business and clientele, and it’s pretty simple.
All you need to do is figure out the average purchase amount per client, and multiply that by the average number of purchases your clients make.
CLTV = Average customer value X Average number of purchases
Having that number is an important piece of the insurance marketing puzzle. Once you have it, you can compare it to what you spend on marketing, and how many customers you’ve signed on from those marketing efforts.
In the insurance industry, you are especially poised to establish enduring relationships with your customers. One of the biggest mistakes that many companies make is that they focus their marketing dollars on signing up new customers. It’s worth the time and money to figure out how to continue engaging with those customers, and how you can continue to serve them over time.
The idea is that it’s more profitable to keep an existing customer than it is to seek out new ones, so it’s worth marketing to and upselling your current client base.
Remember that your existing customers have already jumped through the hoops to become a paying customer, so it costs less to upgrade them to better offers. That will help you increase your CLTV over time.
Once you have your CLTV, you can begin to demystify the value of your marketing campaigns. It can take awhile for solid marketing efforts to take hold. Building a lasting relationship takes time, and when you’re selling insurance, that trust is a key component of signing up new clients. Because it takes time to build those relationships, it can be difficult to prove the worth of your marketing investments. That’s where knowing key metrics comes in handy.
According to the Insurance Marketing and Communications Association, some of the major metrics for measuring your marketing ROI include website traffic, email marketing, social media, SEO and event marketing.
But not all of these metrics are created equal. You need to determine, based on your business and your marketing efforts, which data carries the most weight.
Having data is great, but until you put it into perspective, it’s not going to be very useful to you.
When you know what you’re spending on marketing and how much it costs to sign one customer, you can compare that to the overall value of one customer relationship. Having that information gives you the power and the confidence to invest in quality marketing that works for your insurance company.
Ultimately, it will help you invest your marketing budgeting in signing - and keeping - those quality, long-term client relationships.