Guide to Local Search Marketing Strategy [2021]

Guide to Local Search Marketing Strategy [2021]

Guide to Local Search Marketing Strategy [2021]

Guide to Local Search Marketing Strategy SEO lightbulb

Comprehensive Guide to Local Search Marketing Strategy [2021]

Business is all about sales. Without sales, there is no money. Without money, there is no business.

These are basic business facts.

Sales are the primary focus of any business. Or at least it should be.

Focus on Sales

To be successful, you need to focus on sales. And the fastest, easiest way to do that is with the big four of digital marketing:

  1. Local marketing strategies – includes your online presence: Website and social media.
  2. Search engine optimization – both macro or standard SEO and Local SEO.
  3. Branded content supporting targeted copywriting.
  4. Email marketing and subscription newsletters.

This article will show you how to sell more to new and existing customers using these four digital marketing strategies.

But first, let’s talk about the basics of local marketing, local SEO tools, and some background on search engine optimization.

Online Presence

Smart business owners know that optimizing your local business website is the cornerstone of all marketing. You can not be effective in marketing your business without an online presence.

Your business website should be the hub for everything. It’s where your web content and customer resource pages are maintained. All marketing campaigns and local search engine results pages point to your local landing pages and location pages housed on your website.

Your website should have a part to play in your lead generation and new business development. This one decision affects everything from local search visibility to social media marketing. An online presence needs a place for visitors to go and learn more.

Digital Marketing Strategy

In a recent survey, 92% of business owners believe that a website is the most critical part of their local marketing.

So how is it possible that 28% of small businesses have no website? That’s according to the SBA (US Small Business Administration) statistics.

Sometimes percentages get lost without solid numbers to back them. So try these on for size:

  • The SBA considers a small business size to be 500 or fewer employees. Personally, having conducted many benefits enrollments for 400 to 500 employee businesses, I can tell you they are not small.
  • In 2020 there were 31.7 million small businesses in the United States (SBA statistics).
  • And just in case you’re wondering, the large business number is tiny in comparison with only 20,139 (businesses with 501 or more employees) (SBA statistics).
  • That means there are roughly 8.9 million businesses in the United States with no website.

No Website. No link building. No SEO tools or Search Rankings to worry about. But also no new business from online customers.

Google Local Intent Searches

Digital marketing takes time but gives back great ROI (return on investment).

So what are those business owners doing with all the extra time they aren’t spending with online marketing? My guess is they’re not selling anything to new customers since 46% of searches on Google have local intent.

And the Local 3-Pack appears in 93% of local intent searches on Google. The 3-Pack is how Google presents the top businesses that can most likely sell you what you need in search results.

Every business wants to be in the Google 3-pack.

Ignoring this opportunity is leaving a massive amount of potential business on the table.

Google Domination

According to a June 2021 Statista report, Google dominates the global search engine market with a 92.47% market share.

In June 2021, Hubspot pegged the estimated number of Google searches at 5.6 billion per day.

Yet, according to Google, 56% of businesses have not claimed their Google My Business (GMB) listing.

What is Google My Business (GMB)?

Google offers a free online business profile for your business. It’s called Google My Business (GMB), and it appears in search results from Google Search and Google Maps.

Here’s the kicker about Google My Business listings. It appears regardless of what you do. When someone conducts a Google search, and your business is in the results, then a GMB listing will appear.

And there’s the catch. It doesn’t matter if you have ever set up your GMB listing. Google will find available info on your business and create the listing for you.

As you can probably expect, much of that information could be old or inaccurate.

Unclaimed Google My Business (GMB) Listings

Another issue, especially with unclaimed Google My Business (GMB) listings, is how easily they are claimed, updated, or changed by anyone. Even your competitors.

So that fierce business rival down the street can find your unclaimed GMB listing, create a free Gmail account, and claim your GMB. Once they control it, they can change your hours, phone number, or even report that you have gone out of business.

That is precisely the scenario that Google does not want to happen with GMB Listings. So they have a process in place for the proper owners to take ownership of their GMB listing. Unfortunately, the process is anything but easy. It is so much easier to claim the GMB listing now. It will save you drama down the road.

A Google My Business (GMB) listing is a no-cost opportunity to quickly improve your search rankings and keep your business on the radar of the Google local algorithm. There honestly is no downside to claiming your GMB listing. It’s a powerfully effective SEO tool.

Now let’s talk about utilizing local marketing strategies to put you in front of your target audience.

Neighborhood Marketing

Local marketing strategies focus your sales efforts in your local community.

That is also known as “sell where you live.”

Before the internet created online marketing and local SEO became the new buzzword, many local businesses were already working with local media. It was easy because, at its core, everything was neighborhood marketing.

Local marketers knew their target audience because they lived in the same local community.

Search engines back then were called word-of-mouth advertising. And online reviews from local influencers meant eavesdropping on the town mechanic talking about cars during breakfast at the coffee shop.

Local Media

This brief walk down memory lane is significant to point out the similarities between old-school marketing in neighborhoods and the Local SEO marketing model used today.

All in all, people still want to do business with someone from their community. Today, the advantage is that you are better able to get in front of your potential local customers using branded content and copywriting at a lower cost than antiquated advertising.

Back in the day, local businesses all used paid advertising because it was the only option. If you wanted to get the word out, you advertised with local media like billboards, radio and tv commercials, newspaper ads, flyers, and direct mail.

Today we no longer have those limitations because we use branded content, search engine optimization (SEO), social media, local search, and many other SEO tools.

Ultimately, everything boils down to one thing. Marketing efforts back then or today are to attract customers that live in your local community.

Fast forward a few decades and the internet may have changed many things, but marketing basics are still the same.

There are many benefits from the internet and a ton of baggage with time-consuming, complicated, sometimes confusing ways to manage local business marketing efforts.

Local Marketing Strategies

Many people start businesses and feel it necessary to take the scattershot global approach to their sales and marketing efforts. Go big or go home.

Strategically speaking, that’s a fire, aim, ready approach. It’s backward.

And it’s a critical mistake in your overall marketing plan, especially with service businesses limited by geography, travel time, or license restrictions.

Why create bland, sanitized content for everyone across the United States when your business only serves the Pittsburgh metro region? It’s a waste of time and money.

A more effective approach is to create local content that feeds focused local landing pages. Then your potential customers are consuming relatable, exciting content that vastly improves your local rankings and your chance to generate leads.

Local Marketing Connects with Customers

But doesn’t that limit my reach to potential customers?

No, it doesn’t limit anything (for the following reasons and some assumptions about your business).

  1. You don’t have millions of dollars in your marketing budget.
  2. You don’t have thousands of followers on social media.
  3. You don’t have an established email newsletter with thousands of subscribers.
  4. You don’t have the time to create multiple websites with unique content.

Whether bootstrapped or funded by investors, small businesses and startups all have one thing in common. They need to connect with customers to sell.

And remember the first line of this article? Yes, everything is about sales.

That is where local marketing shines.

Successful Local SEO is About Relevance

Businesses that use local marketing strategies can achieve higher rankings, increase their conversions, and receive more calls from potential customers than if they didn’t know how to implement an effective local strategy.

That is because of the way search engines like Google work, namely that they give preference to websites that are relevant to the user’s search terms.

A practical marketing approach allows businesses to make their websites more relevant with local marketing ideas geared towards their local audience.

Combining this with SEO tools helps increase backlinks (hyperlinked text pointing back to your website) and build customer reviews, both of which increase your search rankings and domain authority.

But local marketing is more than just that. It’s a combination of hyperfocused content, branding, and an effective SEO strategy that makes you stand out from the crowd and receive more calls from potential customers.

The first step to a thriving local marketing approach is to create a plan built around branding both you and your business.

Branding is Critical to Local Marketing

A brand is an effective local marketing tool because it makes you stand out from the competition. It allows your customers to identify you and communicate your message quickly. When people are looking for a solution to their business problems, they will think of you first.

And branding also helps increase sales by making you more memorable.

Branding is effective for local marketing because once you have established your brand, people can think about it whenever they need to find a solution to their problems, hence increasing sales and leads.

Branded Content Supports Targeted Copywriting

Creating branded content furthers your local marketing efforts by providing you with the material needed to follow up or consolidate targeted copywriting.

For example, creating a series of blog posts about how to solve common customer problems can also double as a branded campaign on its own.

That’s because once the content has been published, you can further local SEO efforts by using it as blog content and social media posts, which helps increase engagement and lead generation.

At the same time, search engines like Google and Bing will also crawl that branded content and index it on your website. That’s how your brand becomes more visible to potential customers.

Relevant Local Content Supports Organic SEO Efforts

Google’s mission is to organize the world’s information and make it universally accessible and useful.

That’s why they put so much emphasis on providing users with the most relevant search results.

And that’s where local content comes in.

When you create localized content, you are making your website more relevant to the people who are looking for your services.

The algorithm will then reward you by ranking your website higher in local searches, which can lead to more traffic and better conversion rates.

As an added benefit of hyperfocused content, that increased relevance also increases domain authority or DA.

So what is DA? It’s how Google measures the strength of your website’s authority. The higher your DA, the more likely it is that your website will rank high in search engine results pages (SERPS).

What is Hyperfocused Content?

Hyperfocused content is a localized type of website content used to increase rankings in Google, generate more leads, and position yourself as an expert in your industry (the domain authority I mentioned above).

And the best part is that it works for any business, no matter the size.

Some examples of hyperfocused content are:

  • Informative articles about issues in your community also highlight your expertise as the reason for choosing that topic.
  • Examples of relatable customer problems and the solutions you developed to meet their needs.
  • Customer reviews that highlight your expertise and willingness to go beyond expectations in finding solutions to problems.

These elements further local SEO marketing.

Create Local Content

Search engine optimization (local SEO) seems daunting at first. It’s complicated, and Google is constantly tweaking and changing parts of their algorithm to serve up better results. Improved local search results help everyone. And consumers rely on your highly developed online presence to learn about your business before working with you.

If local SEO is a new concept for you, consider using local news sources as inspiration for hyperfocused local content.

For example, local news stories about car accidents, hurricanes, flooding, and other natural disasters will interest residents who live in areas where these things could happen.

If you specialize in providing car insurance, the next time there’s a flood or hurricane that hits your city, you should get online quickly and post several blog posts, maybe a few videos, and don’t forget to update your social media accounts to promote that web content.

Examples of Local SEO Content

Continuing with the hurricane or flood example above, you can rely on your experience to provide helpful how to’s that people will appreciate and remember. It’s essential to keep in mind that this is not the time to sell anything. All that goodwill you created from a piece of helpful content will evaporate the minute a prospective customer even thinks you are trying to take advantage of a crisis or emergency.

So, what types of creative, relatable content should you consider?

  1. How to prepare your car in case of an emergency in floods or hurricanes.
  2. How to stay safe and protect your home or business during weather emergencies.
  3. Post a helpful list of tips to follow when filing a claim with your homeowner’s insurance.

Local Business Content Marketing

In today’s competitive market, local search engine optimization (local SEO) and hyperfocused content are the two most effective ways for local businesses to get in front of potential customers without paying expensive advertising costs.

Other free or very cost-effective ways to conduct local marketing include:

  • Social media marketing
  • Local awareness ads
  • Location pages
  • Local listings of area businesses
  • Local community magazines and newsletters
  • Local Business directories with local links
  • Talk to community athletics programs about being a local sponsor of a team
  • Consider adding a small spending budget for Google local services ads
  • Don’t forget to look at other search engines like Bing and register with their business listing
  • Talk to other local businesses about their local marketing ideas and how well they manage local SEO and get their business improved local search results.
  • Run a search on local directory listings for your industry and contact them

Mobile-Friendly Web Content

Another aspect of marketing that has become more and more important over the past several years is the idea of mobile-friendly web content. It would help if you made it easy for local customers to find your business and do business with you.

You are probably more familiar with mobile-friendly content from different websites that you visit. When you open a page, and half the page is off to the side of your screen, that is not mobile-friendly.

There aren’t too many faster ways to run off potential customers than a poorly designed website. Make it easy to work with you, and people will do so.

You can see that local SEO isn’t exactly rocket science, but it isn’t easy!

It takes tons of time and effort, but local SEO can be very profitable for local businesses once it works.

How Local Marketing Helps SEO

The final step in creating hyperfocused content and an effective local marketing strategy that will help you increase your search rankings is to combine it with Local SEO.

SEO (search engine optimization) provides additional hyperlinks, keyword placement, and structure to content and copy that helps search engines like Google more easily read and absorb the information.

That helps Google give better search results while also generating more traffic to your website. And it drives conversions. This is important because the higher the number of conversions from Google search traffic, the better your website ranks in Google.

Everything is Local

Focused local marketing allows you to leverage the simple idea that you live where your customers live. That’s a massive advantage over those big corporations that compete with you.

  • Local media outlets prefer locally based businesses that create local content.
  • Local customers prefer working with a local business.
  • Small businesses are frequent sponsors of local events.
  • Deep community relationships: You live in their backyard and might even sponsor a local sports team for more exposure.

The theme is unmistakable – everything is local.

Customers Prefer Local Businesses

I was an insurance broker for two decades, so I can attest to the power of local marketing. But this approach works for any business—real estate agents, Financial Planners, Electricians, basically anyone who deals with local clientele.

Local search marketing is more straightforward and so much more effective than anything else you can do to promote your business.

And people in your community want to work with you.

  • 80% of customers will choose a local business over a national corporation.
  • 91% of customers say small local brands are more trustworthy and treat them fairly.
  • 96% say they shop locally because they value personal service.

In other words, local marketing builds better relationships with customers in your community. Without it, they will never even know your business exists.

Now let’s talk about your local SEO strategy.

Local SEO

“But what about internet search engines like Google? Doesn’t everyone use search engines on the internet?”

Yes, they do. But most people still prefer services from a local company or individual.

As far as local SEO is concerned, Google prefers to send local searches to businesses in your community.

And therein lies the rub. According to Google, 61% of searchers will go to another business listing if the first company they see is not in their local area.

The way to solve this problem is through hyperfocused content for your business.

And it would help if you looked internet pretty. Google wants to send their local search results to a professional business. That means you need to do some essential business grooming and clean up your business.

Using Local SEO to Build Email Newsletter Lists

Your local SEO is your foundation for everything you do in marketing your business. It’s so important that everything else you do for marketing and advertising will depend on it.

You can use local SEO to build email lists for direct mail campaigns, event planning, and more—all without spending a dime on traditional advertising!

When you create useful hyperfocused content on your website, you are automatically creating a foundation for building an email list.

Hyperfocused Content and Local SEO

So how do we combine local SEO and hyperfocused content?

You can take several different approaches to this complicated local marketing puzzle:

  1. Use hyper-focused content as “doorway” pages for crawlers and spiders so they can index your website correctly for local search results.
  2. Creating a blog and filling it with high-quality, hyperfocused content on a regular basis to show Google that you are an expert in your field.
  3. Combining local SEO tactics with social media marketing, especially using targeted online advertising to reach local customers.
  4. Video marketing on YouTube with local content can also be indexed by search engines.

You have to use all of your available resources to reach the most potential customers in your target market through hyperfocused, locally beneficial content.

Comprehensive Guide to Local Marketing Strategies

Now that you understand how local businesses can better reach their target market by using local SEO, it is time to get out there and start working with your customers.

Remember to keep creating quality content for your website and social media accounts. Keep up-to-date with what’s new in the world of local marketing, so you don’t fall behind on any trends.

And when you know about the importance of hyperfocused local content in achieving high local search engine rankings, you can implement this strategy into your own business. You have so many advantages over competitors from outside your area.

Here are a few:

Physical location

It might not seem like a big deal, but a company that advertises as a web or e-commerce based business doesn’t have the same ability to pull in customers as a local business with brick-and-mortar locations. People still prefer going local whenever they can. And Google’s algorithm tends to reward hard work improving local SEO with better content by ranking your business higher in local search.

Local marketing ideas

Think about the many local cultural and community events going on around your region. How hard would it be for a large national company to learn about those events and participate? Unless they have a team of people dedicated to local marketing ideas or outreach, most won’t bother with local store marketing or sponsorship opportunities at that scale.

These are all opportunities for your business to gain exposure.

Once again, it’s all about creating great content that’s optimized for local SEO so that your business ranks higher in local search results.

Optimizing your website for local SEO

Think about it like this, a large company with national exposure can’t compete on a regional basis with a small company that dedicates everything to highlighting their business for local SEO and local search. You can post pictures of foot traffic from local customers; they can’t. You can start a blog discussing local events; it’s difficult for them to do the same. Brick and mortar businesses are powerfully effective at this when competing with national competitors.

You have a comprehensive overview of how to succeed in marketing for customers in your local area. Now it’s up to you to utilize this new knowledge and put it to good use.

Your customers are waiting.

Image of LanceG

Written by Lance Gurganus

Lance Gurganus | Owner, Copybrander, LLC. | Insurance and Healthcare Content | Powerhouse Digital Publisher | 20+ Year Insurance Industry Veteran & Multi-million Dollar Insurance Producer | Lance lives in Pittsburgh with his Wife, Kids, and a 40 lbs puppy that's still growing.

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Improving Car Buyer Trust with F&I Transparency

Improving Car Buyer Trust with F&I Transparency

Improving Car Buyer Trust with F&I Transparency

Anyone who has ever bought a new or used vehicle from a car dealer has most likely dealt with the F&I Manager or their department. F&I or finance and insurance Managers are an essential position in an auto dealership.

Introduction to the F&I Manager Position

Unfortunately, the subjects of finance and insurance tend to complicate anything they touch. And not just in car sales. As I’ve often explained to new insurance agents and advisors over the years, “keep it simple, complexity leads to confusion and mistrust.”

The F&I department is no stranger to this issue. This is why, after writing about it for years, I decided to create an overview on improving car buyer trust with F&I transparency along with an introduction to the F&I Manager position.

What is the F&I Department?

In the world of car sales, the F&I department (finance and insurance) plays a critical role in the successful operation of auto dealerships.

The primary function of the F&I Manager is controlling the sales process through vehicle delivery. A car salesperson handles the initial steps in the sales cycle and eventually helps a buyer pick out the type of vehicle, colors, and options, but the F&I Manager handles everything else.

Job Duties of the F&I Manager:

  • Control the Sales Process – Once a buyer commits to purchase a vehicle, the F&I Manager will step in to handle the rest of the sale.
  • Secure Financing – F&I Managers act as middlemen between the bank or financing company and the car buyer. Experienced managers will work with banks to find the best rates for their buyers based on their credit rating.
  • Add-on Products and Service Sales – The F&I Department directly influences a considerable number of departments and profit centers in a dealership. From warranty and vehicle service plans to value-added after-market products such as truck bed-liners.
  • Handle Vehicle Delivery – the F&I Manager is also responsible for the sales documentation, along with making sure the right vehicle gets delivered to the customer.

Since every car buyer eventually ends up in the F&I Manager’s office, the job they do has the potential to influence the opinion of every customer that buys from a dealership.

F&I Best Practices

F&I is an important position. So how do auto dealerships maintain impeccable standards and the use of industry best practices within the dealership F&I Department? After all, one bad day for an F&I Manager can haunt a dealership on social media for months or years.

Profit Motivations of F&I Managers

It’s no secret that F&I Managers are often the highest-paid dealership employee behind sales managers or owners.

The F&I Manager position involves hard work. But the pay level also lends additional insight into the importance of this job within the dealership operation.

According to the salary and income website, payscale.com, F&I Managers have the potential to earn a significant income.

Average F&I Manager Income

  • F&I Manager annual pay ranges from $33,346 to $145,461. That includes salary, bonus, profit-sharing, and commissions. (Payscale, Average F&I Manager Salary.)
  • Experience directly influences annual income ranges for F&I Managers. The national average salary increases to $83,000 annually when it factors in the amount of expertise. (Payscale, Average F&I Manager Salary.)

We’ve covered the various job duties, income, and strategic roles of the F&I department. Now let’s discuss how to improve the transparency of the F&I process to help improve car buyer trust.

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Fundamental Distrust

The profit motivations of F&I Managers are frequent discussion topics throughout the internet, especially in scenarios where disgruntled customers feel slighted by their buying experience.

Unfortunately, this leaves the F&I manager in a vulnerable position that could negatively impact both sales and the performance of other departments within the dealership.

If the customers of a business have a fundamental distrust of the sales process, then that business won’t survive.

Skepticism and Mistrust

Your customers need to trust that you have only their best interests in mind. Otherwise, they will find someone that does.

When that trust doesn’t exist, the relationship is adversarial. Everything you do or say meets skepticism and mistrust of your real intentions. It also removes loyalty from the sales equation.

Service-Driven Customer Loyalty

Without customer loyalty, you are essentially turning your business into a commodity operation. Competing solely on price might work for Amazon, but car dealerships need service-driven customer loyalty to remain profitable.

So how do you fix this? You can talk all you want about how building car buyer trust is your goal, but words are cheap.

You need transparency in the dealership sales process, including F&I, before you can build trust with customers.

F&I Manager Transparency

The F&I department handles complicated finance issues for a dealership. As I mentioned above, anytime you complicate something it adds a level of mystery for customers. Unfortunately, that can also lead to a general distrust of the entire process. People don’t trust things that seem overly complicated or takes a lot of time to understand.

F&I Manager Transparency can be accomplished in several ways:

  • Utilization of new advancements in technology and equipment, such as transactional video recording.
  • Introduce customer training to focus on the needs of the customer. Servant leadership training is an excellent resource for this.
  • Management should include the F&I Manager in future discussions about incentivizing bonuses and compensation plans. You might be surprised by the quality of the ideas generated.
  • Create behind-the-scenes videos, explanation videos, and “how things work” long-form content, similar to this article, to show customers how everything works at the dealership.
  • Put yourself in the shoes of your customer and anticipate their questions and points of confusion. Then create content to answer those questions before they even set foot in the dealership.

Focus on What Makes Money

In any sales compensation structure, employees quickly learn to focus on the activities needed to earn the most income.

Thus, if you tie your F&I Manager’s pay and future employment prospects to product sales metrics, then increased product sales is what you will get.

Protecting the F&I Manager’s Income

If the F&I Manager has nothing to gain out of a particular sale, they can easily adjust the terms. Fortunately, most F&I managers look at the bigger picture and do what’s right for both the customer and the dealership.

Motivating your employees to do what’s right for the customer is essential to your success — unfortunately, many dealerships design F&I compensation without understanding all the possible outcomes. So protecting the F&I manager’s income becomes a source of contention instead of motivation.

For example, let’s say you had a customer with bad credit that turns down every product sale offered. In this situation, the F&I Manager might be less motivated to close the deal when they consider the extra work required and the negative impact on their PVR (per vehicle retailed) ratio.

Safeguard the Integrity of the Sales Process

Many experienced F&I Managers have workarounds and other techniques to pull from to put the customer in a car without taking a hit to their income or performance numbers. Newer managers don’t have that skills set built yet. Either way, it shouldn’t be an issue in the first place.

That’s why it’s crucial to Implement various transparency steps to safeguard the integrity of the sales process. Otherwise, how would a dealership know that this was happening?

TRAINING TIP:

Transactional Video Recording offers dealerships an additional safeguard to protect the sales process and build employee integrity. For example, your F&I manager may have ideas for solutions that can save deals like the above example, without the negative income aspect. Video provides an additional benefit since the F&I manager can show examples of situations where their ideas would work in real-time.

F&I Manager Tips and Tactics:

  • Understand compliance requirements and be the F&I expert for the dealership.
  • Be aware of their profit goals for the dealership while also protecting the interests of the buyer.
  • Control and guide the sale through the dealership.
  • Be accessible to sales staff to answer questions that might help them close the buyer before they reach your office.

082619 0526 ImprovingCa2 | Copybrander

TRAINING TIP:

Ask your manager to practice their F&I presentation and sales process while on camera. Invite them to do this alone until they start to feel more comfortable with the process. Then you can slowly introduce other dealership staff to review videos but only allow positive feedback. A poorly executed or ill-timed joke, regardless of the intent, has the potential to destroy any progress you’ve made. Eventually, your employees should be more comfortable on camera.

Consequences of Inaction are Far Worse

Achieving real transparency in your sales and F&I process is possible only with the buy-in from every employee. That takes time to introduce and train properly. Without it, the essential trust aspect will always be missing from your organization.

The consequences of inaction are far worse than the perceived costs associated with the time and resources necessary to implement a program such as this.

Any unhappy customer can broadcast their negative opinion of your business via the public bullhorn of social media. The reputation damage can take months to fix and cost thousands of dollars in missed sales.

Improving Car Buyer Trust with F&I Transparency

Trust is critical for business success in any industry. That’s why improving car buyer trust with F&I transparency is the keystone of a solid foundation of any size dealership.

Transparency is always a good thing.

And a happy customer will provide you with many years of continued business and priceless word-of-mouth advertising.

The Need for Final Expense Insurance is Here

The Need for Final Expense Insurance is Here

The Need for Final Expense Insurance is Here

The saying goes “two things in life are guaranteed, death and taxes.” Unfortunately, the costs to the surviving family after the death of a loved one can be a significant financial burden.

This is where savvy insurance agents and advisors can step-in to help their clients protect themselves when they need it most with final expense insurance.

What is Final Expense Insurance?

It’s a whole or permanent type life insurance policy with a smaller benefit amount, usually from $5,000 to $40,000. The lower benefit makes it more affordable for older consumers to cover end-of-life expenses like a funeral and burial related costs.

These days it’s not unusual to hear about people outliving their life insurance policies. Unfortunately, most insurance carriers won’t issue new life policies beyond age 75 or 80.

Final Expense Insurance fills this void with issuable age ranges from 40 to 90 years (or older in some cases).

Differences Between Life and Final Expense Insurance

As morbid as this subject may seem, introducing clients to final expense insurance coverage is no different than discussing standard life insurance. If anything, the need is much greater due to the age ranges of the intended audience.

The primary differences between life and final expense insurance coverages are smaller benefit amounts, a much broader consumer audience, and a more straightforward application process.

How so? Let’s review some features and benefits of final expense insurance products:

  • A simplified issue whole life policy.
  • Benefits available from $5,000 to $40,000 (or more depending on the insurance carrier).
  • Easy application process, no health exam necessary.
  • Rate and benefit locked in for the life of the policy.
  • Issuable age range from 40 to 90-years-old (or higher in some cases).
  • Affordable rates due to a smaller benefit amount.

To understand the importance of these types of insurance plans, one only needs to look at the specific reason for the smaller benefit amount — funeral costs.

Death Costs Have Spiraled Out of Control

Death in the United States is an expensive event without even considering all the legal and estate issues involved. So, let’s talk about the actual funeral by itself for a moment.

The NFDA (National Funeral Directors Association) estimates the median cost of a funeral with viewing and burial at $7,360. When you add in the burial vault, which is required in many states, the median cost of a funeral is $8,508. These statistics are current through 2016 and the most recent available when this document was published in 2019.

Please keep in mind that these median costs will also vary depending on the area of the country where you live. For example, downtown Los Angeles will have higher average funeral costs than the suburbs of Pittsburgh.

As death costs have spiraled out of control, insurance carriers saw a need for older Americans to protect themselves and their families from these end of life expenses. Unfortunately, obtaining a life insurance policy above age 65 is often cost prohibitive. Final expense insurance seeks to resolve this with smaller benefit amounts and more affordable rates.

More than one-third of adults are concerned with leaving others to pay for their funeral expenses. With many older Americans on a fixed income, the burden of these funeral costs will ultimately fall on their children or extended family. Nobody wants to be the cause of added financial stress, especially when their family is already dealing with the emotional turmoil from the death of a loved one. Final expense insurance can play a part in helping your clients protect their families from this happening.

The Final Expense Insurance Market

Clearly the need for final expense insurance is already here, but what about the market for this product?

With a target audience of older Americans, the final expense insurance market is one of the fastest growing segments of our population.

It should be no surprise to any insurance agent or advisor that the United States is an aging country. These days, it seems like everybody is talking about Baby Boomers getting older. What you don’t hear discussed very often, however, is their children, the Generation X’ers. Just like their parents, they are getting older too.

Baby Boomers

Baby Boomers is the generation name attributed to the massive increase of children born during the period after World War II.

  • Baby Boomers were born between 1946 and 1964.
  • At their peak in 1999, Baby Boomers numbered 78.8 million.
  • As of 2017, Baby Boomers range in age from 53 to 71.

Generation X

The children of Baby Boomers make up the majority of Generation X. They are sometimes also called the “Baby Bust” due to their much lower birth numbers or the “Forgotten Generation” from living in the shadow of their Baby Boomer parents.

  • Generation X children were born between 1965 and 1980.
  • There are 65.8 million “Gen X’ers,” but they are expected to be a larger population group than the Baby Boomers by 2028.
  • As of 2017, Generation X’ers range in age from 37 to 52.

An Incredible Opportunity

Together these two generations make up a huge population group of nearly 145 million people. This represents an incredible opportunity for insurance agents and advisors to help these families protect themselves from the burden of end of life expenses. The perfect products to handle this are life insurance and final expense insurance plans.

What about Millennials? We keep hearing everybody talking about them. Isn’t our country getting younger? Unfortunately, no. According to the US Census Bureau, “older population” is considered anybody above the age of 65. Back in 1970, that was 9.8% of our population. In 2010, the older Americans group increased to 13.7%. Now it’s growing at a much faster rate. By 2030 older Americans will make up 20.3% of the US population. And 2050 will have an estimated 83.7 million people older than 65.

Annual Death Numbers are Increasing

Sadly, as more people get older, their annual death numbers are increasing. In 2017, there were 2,813,503 deaths in the United States (the latest year stats are available). An increase of 69,255 deaths over 2016. Deaths result in funerals. And funerals cause the end of life expenses that many families need help paying.

The market and the need for final expense insurance is already here. It represents a unique opportunity for the right financial advisors and insurance agents.

Your Focus is Local

The potential market numbers for final expense insurance might sound massive and overwhelming when taken as a whole. But your focus is local and regional customers that are your part of this broader market. Your backyard is filled with consumers that need your insurance expertise.

Even in 2019, it’s relatively rare for insurance agents and financial advisors to be licensed in all fifty states and operate a colossal website serving a national customer base. If this is your goal, great. But you need to start somewhere. So focus on the untapped market in your local community.

The Need for Final Expense Insurance is Already Here

A quick refresher on insurance market statistics from LIMRA’s 2018 Insurance Report:

  • People Need Information: Half of all adults visited a life insurance company website for information on life insurance in 2017. How many of these consumers would have preferred dealing with a local insurance agent or advisor?
  • Online is Popular: 1 in 3 adults either purchased or attempted to purchase life insurance online in 2017.
  • People Don’t Have Enough Insurance: Among the adults with life insurance, about 1 in 5 say they don’t have enough.
  • Insurance Costs are Still a Mystery: Nearly everyone thinks life insurance is much more expensive than the actual cost — especially younger generations. Millennials overestimate the cost of life insurance at FIVE TIMES the actual amount.
  • Most People Don’t Like Needles: Surprise! Those visits by paramed nurses at home or work are still not popular with consumers. Half of all adults say they are more likely to purchase life insurance if it’s priced without a physical examination. Which means most of the consumers you talk to are going to like the simplified underwriting aspects of final expense insurance plans.

The market and the need for final expense insurance is already here. It represents a unique opportunity for the right financial advisors and insurance agents.