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Is advertising on radio and television a cost-effective way to help expand an independent insurance agent’s book of business? It may not be for everybody, but Criss Sudduth says a one-two punch of broadcast ads have propelled his agency’s growth.
Sudduth, a principal in the Ark Assurance Agency in Tyler, Texas, began an advertising campaign on local radio and television around two years ago. He says while the return wasn’t immediate, over time the ads definitely helped his agency grow.
“Tyler is becoming a retirement community, so we were trying to figure out how to connect to people moving to our town that didn’t know who we were,” Sudduth explained during a panel discussion at the Independent Insurance Agents of Texas’ annual conference in June.
“One of the things we did that we’d never done before is to advertise. I got with my carriers and co-branded advertising on the television and radio, and ran the same information at the same time. And we saw great results over the course of two years.”
The advertising was aimed at personal lines, which accounts for about 60 percent of his agency’s business. He figured as an independent agent, his competition is not other independent agents, but direct writers.
“I directed my advertising toward their limitation of having one carrier compared with my ability to have multiple carriers” and being able to offer customers multiple options, Sudduth said.
In addition to gaining new customers in his area, the other benefit to advertising has been an uptick in retention. “With our current customers [the advertising] kind of raised their confidence level when everybody else was coming after them,” he said.
Multiple Channels
Sudduth said he previously had been just “like everybody else. I put an ad in the Yellow Pages and I thought that was going to do it. I thought that was going to drive all the traffic in.”
He started thinking about other advertising channels but figured he wouldn’t be able to afford them. Still, he decided to go ahead and explore the possibilities.
“I talked to the cable people and I talked to the individual TV stations, and one of the things I figured out with the cable is, a lot of times it is less expensive from an advertising aspect, but you’ve got to have the cable to see that ad. And I had a satellite dish, so I wasn’t going to see myself on TV. So I said, ‘I can’t do that.'”
After investigating options with the local ABC television affiliate in Tyler he discovered that shooting the commercial wasn’t going to cost as much as he’d thought.
“To shoot the commercial cost about $500,” he said. “But I had that commercial. It was mine, I owned it.”
The spot runs on the Ark Assurance Web site, as well as the Web site of the radio station with which the agency also eventually advertised. “I didn’t just have it in one spot, I spread it out in several places,” Sudduth said.
One important lesson he learned is that with broadcast advertising “you’ve got to own the time slot,” Sudduth said. The evening news was out of the question because that time slot was too expensive. So Sudduth looked into what happens in the morning, on daytime TV, and liked what he saw.
“We found a spot in the morning news. … People were getting up and getting ready to go to work and Mom was getting the kids ready to go to school. So I said that’s where I want to be,” Sudduth said.
Armed with the realization that married women are the driving force behind the purchase of personal lines insurance for their families, he decided that’s who he wanted to target his advertising to — married women.
“So that’s where I advertise: the morning news, Regis & Kelly, Good Morning America. Those are less expensive than prime time news,” he said.
Sudduth acknowledged that he didn’t have a lot of confidence at first in whether the TV advertising would generate much business. But on the first day the TV ad ran, the producer came to the agency to watch the ad with Sudduth and his employees.
“We were in my office in the kitchen, watching it on TV,” Sudduth explained. “We we’re high fiving … and the phone rang. The receptionist goes, ‘there’s a man on the phone who saw your commercial and wants a quote.'”
Sudduth said in order for it to work, an agency has to make a long term commitment to advertising. “You can’t just say I’m going to advertise for three months and see what happens.”
After his foray into television, Sudduth said he decided to venture into radio advertising, which he actually thinks is superior to television when it comes to reaching an audience.
“Because they don’t get up and walk away out of their car,” he said. “When they’re in their car and they’re on their favorite station and you’re advertising, guess what? They’re listening.”
He also noted that when asked how they heard of the agency, far more potential customers said they’d heard the ad on the radio.
Sudduth participated in “How We Did It: An Idea Exchange for Agency Growth,” a panel discussion at the Independent Insurance Agents of Texas conference in Ft. Worth in June 2010.