When you apply metrics to certain investments, coming up with a reliable answer isn't always easy or even doable. That might be one reason why a recent survey conducted by Jason Hoeppner and his firm, B.H. Burke & Co., showed that for insurance agents, determining the return on investment of having a social media presence continues to be less important.

Conducted late last year, the 2012 BHBCo Social Media and Online Marketing Survey studied the use of various social media platforms versus traditional marketing methods. Although the study looked at both carriers and agents, for this column we'll just be looking at the agency data.

Jeff Yates, executive director of IIABA's Agents Council for Technology (ACT), said in his email distribution of the survey report, “The results are encouraging to me because they show a clear forward progression in agency usage of social media. We have a lot more work to do, of course, in continuing to publicize agency success stories, to bring more agencies onboard and to enhance their use of the media.

“The survey does reveal one huge opportunity area for the industry and that is to convince more agencies to measure which of their marketing dollars are bringing a return for them.”

The survey reported that the use of social media continues to increase, especially on Facebook, Twitter, Google+ and YouTube. But because social media participation has a very low to no entry fee expense, traditional marketing methods like Yellow Pages, print advertising and direct mail continued at similar percentages, meaning budgets are unlikely to have increased.

If social media had comparable costs to traditional marketing platforms, what will the trends show? Is the growth in social media usage due to demonstrative value or more to the low threshold of entry?

The survey found that whether agencies are measuring traditional or non-traditional marketing methods, nearly 60 percent (58.8 percent and 59.7 percent respectively) do no metrics of those efforts. So it's no surprise that many arguments against the use of social media center around the perception that it lacks value.

When asked, “How do you measure the ROI of your marketing?” 66.2 percent responded, “We do not measure it,” which, according to the report, is a bit more than last year's responses.

Why aren't agencies measuring return on investment of their marketing efforts? Is it a waste of time? Is it, as Chuck Blondino of Safeco Insurance points out in his article for ACT, “Grow Your Agency & Improve Your Marketing by Tracking Key Metrics,” a key factor in what separates average agencies from those which are growing the fastest? Or is it, at least as far as social media is concerned, too difficult to get an accurate picture?

Non-traditional marketing

Social media marketing is very non-traditional; not just because it is via a different and dynamic platform, but also because the whole approach is or should be very non-promotional. Traditional marketing outlets like print advertising, television or radio spots are often focused on the three traditional key messages: products, pricing or service. Done right, social media marketing does none of that.

Social media marketing is all about building a brand, a reputation and a value in the community without ever trying to “sell” anything. Despite all of the “likes,” “followers,” “connections” or “pins” that are touted by various platforms as being demonstrative of their value, it's not a numbers game; it's a dialogue between you and your clients and prospects even before they may be prospects.

Related: Read “Text Benefits”

Social media allows—nay, demands—that you prove your value to the market as a resource, not for products or services but for your knowledge, experience and expertise which helps build relationships. You must create a presence in the social media landscape, reaching out to your markets not by requiring they visit your website, but by visiting them in the various communities to which they belong.

Those successfully engaged in social media don't immediately create their own Facebook pages, Twitter accounts or blogs; first they begin listening and participating in the dialogue on different blogs and Facebook feeds of others. You need to create your agency's voice; and it should have a human, personal sound. Even though you are not selling or doing any kind of marketing, having a real, approachable person at the other end of your comments is essential.

When someone looking for insurance contacts you because you've built a reputation as knowledgeable and reliable without being demanding, that prospect wants to deal with not a business, but a person.

Once you've begun to feel comfortable and have a place in the social media landscape, then create your own identifiable presence. In fact, many insurance agencies that succeed with social media are involved on both on a business and personal level. They may have an agency footprint with a Facebook page talking about all the things the agency is doing, while individual agents are tweeting or blogging about insurance-related topics to establish themselves as experts in personal or business risk management. The only tie-back to the agency or insurance sales of any kind is in their profile.

I believe that the real question businesses should be asking is not “What is the value of my agency's investment in this particular marketing vehicle?” but rather, “What is the value to my client for investing in my agency?” In previous columns I've challenged you to flip ROI on its ear and think outside the box.

Here again I'm asking you to consider a different perspective when you think about ROI of your social media marketing efforts.

The first question is: Are the 66 percent of respondents correct in their decision to do no measurement of their marketing at all? Or are they missing the opportunity to identify critical efforts to the success of their agency, as Blondino states in his article for ACT?

It depends.

For traditional marketing methods, measuring ROI has demonstrably shown time and again that having the knowledge of what works and what doesn't allows you to apply your limited funds to key areas. But I think it's important because most of the ROI determination is just math. Evaluating your close ratio or average revenue per client or client retention and tying it all to that simple question, “How did you hear about us?” becomes just about tracking the data within your own systems and doing the math.

When it comes to non-traditional marketing, it's not as easy. The process begins so much earlier than putting your “agency's stake in the ground.” It's also much more dependent on the cumulative exposure and positioning than running a direct mail campaign or placing a print ad or Yellow Pages. It's also not something you can or should ever consider turning on and then stopping; that can be the most devastating blow to your brand and reputation, whereas running a TV commercial campaign and then stopping it happens all the time.

For me, trying to determine the ROI of social media marketing is a meaningless exercise because consumers are at a point now that if a business doesn't have a social media presence, they don't exist.

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