So You’ve Got a Marketing Budget—Now What?

If you’re one of the few agencies that dedicates time and energy to developing a concrete marketing budget, kudos—you’ve taken an important first step in prioritizing your business’s funds to make a little go a long way.

Ideally, if you’re the owner or principal of your agency, you’ve been an integral part of the process so far. Experts agree that at a bare minimum, it’s crucial for agency leadership to have a hand in developing the marketing budget.

“Setting a budget is a function of building the business plan, and that’s a senior management kind of thing,” says Paul Kurnit, clinical professor of marketing at Pace University and CEO of PS Insights, a marketing communications consultancy firm. “The owner needs to be deeply involved.”

“The principal needs to be highly involved—the person spending the money, because no one cares about your money as much as you do,” agrees Robyn Sharp, owner of Sharp Family Insurance and founder of Mega Agency Marketing, a marketing firm that specializes in helping agents use online marketing to grow their agencies. “Delegating creation of the budget to people who don’t have skin in the game can be really dangerous. If you’re getting a paycheck, and you can count on that paycheck, you’re just not as worried about the outcome.”

But it’s one thing to create an agency marketing budget in the first place—it’s another thing entirely to execute it. “Many agencies simply don’t have an active marketer in the office,” says Jennifer Jennings, vice president, marketing and training, Grange Insurance. “The principal is spending their time running their agency and is often still part of client acquisition.”

Over the course of developing the budget, “the owner needs to identify two or three or four trusted resources in the agency who have a stake in developing and fulfilling the plan,” Kurnit suggests. “They may not have a vote in terms of what the budget’s going to be, and that’s OK. Having that understanding is critically important because it has a bearing on not only financial investment, but also human investment. Staff should get a vote on whether or not marketing ideas they develop will be consistent with the budget.”

Aligning your people with the marketing budget and plan is a crucial step that many agencies overlook. “A lot of times you see the principal hand marketing responsibilities over to a CSR and say, ‘Hey, you can work on this.’ But then they never block out time for that person to do it,” points out Dale Steinke, director, independent agent marketing programs, Safeco Insurance. “If you don’t block out the time, it doesn’t happen.”

At the average agency with revenues under $5 million, one employee is dedicated to marketing, and marketing payroll totals approximately 2.5% of net revenue, according to the 2018 Best Practices Study Update. Meanwhile, the average agency with revenues over $5 million employs nearly four marketing staffers and devotes approximately 1.3% of net revenue to marketing payroll.

“Figure out, within the components of the plan, who is best suited to do which aspects of it,” Kurnit suggests. “You could have a relative’s kid who’s got a good gift of gab doing cold-calling, for example. That would be a very inexpensive component of your budget.”

Once you’ve determined who’s going to execute what, “someone needs to have accountability for marketing results,” says Sharp, who works with a variety of agencies on Facebook advertising specifically. Who that person is will vary agency to agency.

“I’ve seen this with a lot of my clients—at smaller agencies, it’s usually the owner who’s keeping up with exactly how many leads their staff is responding to, getting quotes from, all of that,” Sharp says. “Then I have larger agencies that kind of just turn it over to their employees. They vaguely know what’s happening, but their staff has a clear picture. Either way, you need to really understand how well your marketing is performing.”

Regardless of how your agency structures its marketing manpower, “you need to have somebody who’s dedicated to doing it, even if it’s only a few hours a week,” Steinke says. “Among the fastest-growing agencies, one of the core things they have is some sort of marketer—part-time, full-time, something.”

Jacquelyn Connelly is IA senior editor.