Episode 207: The Bottom Line - Relationship Marketing

So the big question is this: how do small business owners like us grow our leadership, develop our teams, and scale our business in a way that allows us to get our products and services out to the world yet still remain profitable? That is the question, and this podcast will give you the answers. I'm Bradley Hamner, and this is the Club Capital Leadership Podcast. Welcome to The Bottom Line, a new weekly podcast series that we drop every Thursday to complement our weekly Monday podcast interviews with the industry leaders. These podcasts are going to be designed to give you short, impactful, and value-driven information that you can start using right away in your business. I value your time and attention and will do my very best not to waste it.

Just get what you need and go.

So with that, let's get into today's episode. Are you an agency owner looking to grow your revenue, increase your bottom line, and better manage your taxes? Club Capital is here to help. Club Capital is the largest accounting and advisory firm for insurance agents in the country, providing monthly accounting, tax strategy, and CFO services. Way more than bookkeeping and your everyday run-of-the-mill tax prep, Club Capital is focused on providing financial and tax advisory services that help you plan and forecast your agency's performance. Their financial dashboards and agency forecasting tools help you better understand your agency's historical performance, create, measure future targets, and see how your agency compares to your peers around the country. Imagine what it would be like to understand the impact to your bottom line when deciding to hire a new employee, or forecast the impact rate changes or commission rates will have on your business. With over $200 million in tracked annual revenue and $140 million in tracked annual expenses, Club Capital has the data and the team to help you make better informed decisions for your agency. They will help you turn that back office stress into the backbone of your agency's success by giving you the tools to take your agency and your leadership to the next level. Visit club.capital today to book a solution overview with one of our business consultants. Club Capital, way more than a CPA firm. Are you an agency owner looking to grow your revenue, increase your bottom line, and better manage your taxes? Club Capital is here to help. Club Capital is the largest accounting and advisory firm for insurance agents in the country, providing monthly accounting, tax strategy, and CFO services. Way more than bookkeeping and your everyday run-of-the-mill tax prep, Club Capital is focused on providing financial and tax advisory services that help you plan and forecast your agency's performance. Their financial dashboards and agency forecasting tools help you better understand your agency's historical performance, create, measure future targets, and see how your agency compares to your peers around the country. Imagine what it would be like to understand the impact to your bottom line when deciding to hire a new employee. Or forecast the impact rate changes or commission rates will have on your business. With over $200 million in tracked annual revenue and $140 million in tracked annual expenses, Club Capital has the data and the team to help you make better informed decisions for your agency. They will help you turn that back office stress into the backbone of your agency's success by giving you the tools to take your agency and your leadership to the next level. Visit club.capital today to book a solution overview with one of our business consultants. Club Capital, way more than a CPA firm.

Hey everyone. So I really like super simple, easy to understand, easy to grasp frameworks and concepts that helps me to be able to think and remember something. I guess maybe it's just because of me. I need easy, simple things to be, be able to remember. And so I was talking to some people in our team around marketing specifically. I was talking to my mentor around marketing. And one of the things that I've known for a while, especially with working with Club Capital and just understanding the, the nature of investing in marketing, is you're somewhere going to be between 5 and 8— we'll go all the way up to maybe 10%. You're going to invest 5 to 10% of your revenue on a monthly basis into marketing. Now, how that splits into branding versus direct response type marketing, That's another conversation outside of this, but I'd never considered about using a percentage of that for relationship marketing. In other words, investing back into your current customers as an avenue to begin to receive referrals. Now, there have been plenty of episodes that we've had, um, on our Monday interviews with people that have talked about referrals and how do you ask for referrals, et cetera. Go back and, I mean, if you've been with us for a while, there's plenty of people that talk about word track strategies and the importance of that, etc. I'm thinking, thinking about this episode specifically from the X's and O's of it. And so let's just say hypothetically you had $500,000 top line revenue in your business. So that's roughly $42,000 a month in revenue. And if we know we're going to be investing, say, 8% of that in back into marketing, what if we took 1%, which is an easy number to remember, $420 a month and we allocated that specifically to relationship marketing. So what would that look like? Now, if you are in an industry where you're relegated— regulated, excuse me, by the amount that you can do per person, let's just say that's $25, then that's roughly 16, 17 people a month that you could use to reinvest into the relationship itself. Now, what would that look like? Well, that could look like swag. So if you worked with, say, Relevant Advantage, etc., somebody like that, where you invested in, say, a new customer, giving them, you know, a new customer packet, etc. I think that that's around relationship marketing. Also think about if you were just sending out to a customer, maybe it's been with you for 10 years, or they're a certain size customer, maybe you have a standard that's a VIP customer, they pay you X amount of dollars in revenue, or you make X amount of dollars in revenue from them every year, you're going to proactively send them a packet in the mail, and that total packet from the pack, postage, the swag, the gift that you put in there, or gifts you put in there, ends up being $15, $20, $25 per package. To me, that's relationship marketing. You're just sending that to them to say, hey, thank you for being a customer. Thank you for your business. And then of course, being able to allude to the fact of, you know, asking them if there's anybody else that you know that would be great for us to work with. So I think about that, that that is a standard across the board in any company to say, okay, wait a minute, let's take 1% of our revenue and just invest it back into our current customers. Maybe at another time I'll do one about, you know, a framework of AAR— acquisition, ascension, retention. How do you get customers? How do you get the customers you have to pay more? And then how do you keep the ones you got? Well, this really follows along the third one, which is how do you keep the customers you have and possibly being able to get them to, to pay more and helps you to be able to get more new customers because they may refer business to you. So this relationship marketing, 1% top line revenue, that's one thing that we are implementing now. And I love the idea because it gives a very clear number. To the team to say, hey, this is how much we have just to invest back into our current customers. And by doing that, we hopefully are number one, going to retain those customers, keep them longer, which increases lifetime value. And then number two, also positions us to be able to be more referable because we gave them such a great experience. So 1% top line revenue back into relationship marketing. That leaves another 7% that we would do traditional or standard marketing, maybe paid leads, paid ads, etc. So anyway, hope that helps. Till next episode, lead well.