Smart Spending on Charitable Causes
By Peter van Aartrijk, CIC

Each year, independent agencies should spend 2-3% of annual revenue on advertising and promotion – more if they’re rolling out a new service, merging with another firm, or expanding to a new region.

This may be a revelation to many agents, but what’s not included in that 2-3%? What I call the “obligatory” category of spending – all the annual donations agents and brokers make as good citizens in their communities.

One agency principal told me that he counted all he was spending in a year, and it totaled $16,000 to 10 charities and civic groups. He questioned the value of so many charities to his firm – “I wasn’t sure what we were really getting for it.” His solution? He still gives about $16,000, but with his staff’s input he cut the number of organizations down to two. This means he’s “top dog” with those groups, and can maximize his exposure. And his staffers get involved in helping those causes as well.

You’ve seen those banners hanging around town for, say, the 10K Race for the Cure. There might be 10-20 supporting organizations listed – maybe yours is too. Sometimes you see names, sometimes logos, but they’re small. But there are usually one or two major sponsors who get top billing. They headline the event. That’s what you could call advertising. So why not be the top dog for an event in town – or create your own cause? Perhaps your employees can come up with some ideas. Have some fun. The best part is when your staff gets personally involved in these events – you can feel their excitement, and the community gets to see the great faces behind your agency’s brand.

Be strategic with your marketing dollars. Often less is more. While you certainly shouldn’t donate large sums to everyone who asks, I have no argument against agencies supporting lots of local causes. That’s not the point. I just would rather not see agencies calling it “advertising” when they give a few hundred bucks to the Little League. Call it something else.

By the way: Want to know how that agency cut down to two the number of charities it was supporting? The owner told the groups who called for money: “I’ll give our normal donation, but if I don’t hear a thank-you from at least two people during the year for the donation, I won’t give next year.” Guess how many of the 10 met that simple test? Yes, just two.

Peter van Aartrijk (peter@Aartrijk.com) is co-founder of I-Marketing Management and has spent 20 years working with independent agents.