Seventy four percent of all UK media ad spend is now digital and it’s not just the big corporates driving this – SMEs are also getting in on the act with 60% of UK SMEs using paid digital advertising tools to reach their target markets.
While the insurance industry has made digital inroads, the broker market, particularly in commercial, has yet to fully embrace everything that digital marketing has to offer.
“Most businesses spend between 12-20% of their turnover on marketing but insurance broking is very different. Typically their spend is less than 5%” says Ken Wright, Head of Broker Development at AXA Insurance.
“Whilst complex commercial remains relationship led with the majority of pipeline generation through investment in personal connections, networking and client referrals this is even more of a reason for the brokers digital identity to mirror their clients offline experience.”
And even where brokers start moving towards digital marketing many are still in the foothills compared to other sectors.
“Brochureware websites across the sector tend to be quite basic which in itself isn’t an issue for many commercial brokers. The mismatch is where they build their brand on professionalism, trust and providing good advice then present their clients with a very dated, poorly designed text overload website” he says.
He believes that brokers who aren’t moving their marketing online risk being left behind as “growing client expectations mean what was great yesterday will only be passable at best tomorrow”. But it’s not just a defensive manoeuvre, there are opportunities out there that only a digital approach can secure.
One broker who’s been reaping the benefits of a digital approach is Rachel Aston, Head of Marketing for SME and Personal Lines at Gallagher. While she works for a global broker, her early experience comes from her time at Bollington, a regional, independent broker that was acquired by Gallagher earlier this year.
“In 2014, we set-up a robust SEO strategy with an external agency and when we saw the quick results from that activity, we knew that this was going to be transformational for the business,” she says.
While she concedes that increased online competition might mean brokers entering the fray today will find that it takes longer to see the results, the benefits of a digital approach can be transformational.
“It allows that two-way conversation which traditional marketing doesn’t provide. If customers respond to traditional marketing, great but digital brings it to life,” she says.
Such is the benefit of digital, it now makes up around 80% of her marketing spend: “It’s less expensive and more effective. You can see the conversions and the return on investment more easily and quickly.”
This isn’t something that a broker can just decide to do today and start tomorrow though. It requires preparation, resourcing and most important of all, it requires a strategy to make sure it delivers.
“Brokers should take it back a step. What are they trying to deliver? What’s the budget? And they need to be realistic about what they’re trying to achieve and the critical need they're trying to address,” says Ken.
While it requires its own strategy and uses its own tools, digital marketing isn’t ripping up the game plan and starting again – it follows the same themes as traditional marketing.
While social channels provide free opportunities to market, SEO, pay per click and email campaigns will require investment if they’re going to be successful.
Rachel says that it all depends on the individual strategy but that an email marketing platform can cost anywhere between £3,000-6,000 per year while a good SEO strategy could cost £3,000 per month for a basic website up to £12,000 for a more complex, multi-faceted offering.
She concedes that it can be difficult to know where to start but is adamant that to get the most out of the investment, an expert is required be that an agency or a recruit. But there’s support out there for brokers looking to explore the world of digital marketing and better understand the likely spend involved, such as accessing guidance from AXA’s broker marketing agency, Ignition. This is available via their AXA relationship manager. Ignition will help them start a conversation about their digital needs and ambition.
However it’s approached, the benefits over traditional marketing are clear: “It’s easier to prove return on investment. We track the sales weekly and we can see how many enquiries and quotations we’ve had, how many were transacted online or via the call centre and how much cost we have spent vs income generated,” says Rachel.
And throughout the digitising process, she recommends that brokers keep asking themselves one question: What can I do to improve the conversation?