Tag Archives: marketing strategies

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Sell More by Not Selling

Your prospects and customers are bombarded with hundreds, if not thousands, of advertising messages every day. It wasn’t that long ago that you had to watch TV commercials because there was no other option. Today, Karen and I complain about having to watch “live” TV because we aren’t able to skip through the commercials.

Doug Kessler on Content Marketing

The connected consumer is able to ignore your marketing messages better than any consumer in the past. Getting attention—whether online, using direct mail, or meeting someone at a networking event—is harder today than it ever has been.

I am convinced that the way to grow your agency and market the products and services you offer in this new environment is to do less selling. People continue to want information. They just will not put up with being “sold.”

In this new environment, it is becoming apparent that people who educate and inform their prospects and clients are more successful. They highlight their expertise with videos, content-rich websites, social streams, blogs, ebooks, special reports, and images. This is called content marketing.

Doug Kessler on Content Marketing

Content marketing means creating and sharing valuable free content to attract and convert prospects into customers, and customers into repeat buyers. The type of content you share is closely related to what you sell; in other words, you’re educating people so they know, like, and trust you enough to do business with you.

While copywriting techniques are often applied to content created for marketing purposes, we’re not talking about advertising in the traditional sense. In contrast to “interruption” marketing such as television commercials or direct mail, content marketing involves delivering requested information with independent value that creates trust, credibility, and authority for the business that provides that value.

Insurance agents play a key role in protecting a client’s financial future. Trust is a key factor in their buying decision. You have the power to elevate yourself on the Web to a position of trust and authority. You can interact and participate in conversations that other people begin on social platforms like Twitter, Facebook, LinkedIn, chat rooms, and forums.

The primary goal is to obtain their permission to deliver content via email or other media over time. Repeated and regular exposure builds a relevant relationship that provides multiple opportunities for conversion, rather than a “one-shot” all-or-nothing sales approach.

The key is to focus on buyers’ needs, not your own ego. Stop trying to sell your products and services. Don’t rely on interruption techniques. Instead, you should seek to deliver the right information to the right buyers at the right time when they are most receptive.

Content drives the Internet, and consumers are looking for information that solves a problem, not for immediate sales pitches. The trust, credibility, and authority that content marketing creates knocks down sales resistance, while providing a baseline introduction to the benefits of a particular product or service. Agencies can gain credibility and loyalty with consumers through content, and smart marketers think and act like publishers in order to create and deliver content targeted directly at their audiences.

Don’t simply push product or low price. Teach people something. Share your expertise. It is counter-intuitive: You sell more when you stop selling.

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A Balanced Approach to Agency Marketing

Insurance agency marketing and sales are being transformed right before our eyes. Daniel Burrus, a technology forecaster, said in his January 2009 Technotrends newsletter:

“We are now at the dawn of a profound technology-driven transformation that will make the  changes we have experienced over the past 25 years seems small and slow. We are about to  transform how we sell, market, communicate, collaborate, innovate, watch TV, learn and, as you  might guess, much more.”

The implications of this “technology driven transformation” for insurance agencies are significant. The marketing activities that agencies have relied on for many years to retain existing clients and generate new business are not going to continue working as well as they have in the past. The new consumer is using the Internet for researching all types of purchases, including insurance policies. New mobile computing platforms, including iPads, iPhones, and other mobile devices are redefining what it means to “stay in touch.”

Yet, even with all the new “stuff” that people are using in their daily lives, people still want to buy from people. And this is why independent agencies should not be afraid of this transformation. Agencies can take advantage of this transformation and grow their agencies, if they are willing to think differently about marketing and sales.

Six Key Elements of a Successful Strategy

The keys to building a profitable book of business are:

  1. A balanced approach to marketing and sales.
  2. Fixing an agency’s follow-up failure.
  3. Create high-touch activities using high-tech tools.
  4. Creating processes and systems.
  5. Commit to the long haul.
  6. Constant attention.

Ross Dik owns Knight Dik Insurance located in Worcester, MA. This independent agency focuses on personal lines and small commercial accounts. They have 12 employees and are located on the ninth floor of a downtown office building (with a security guard), which means they don’t get a lot of walk-in traffic.

Dik realized five years ago that in order to continue to grow the agency he needed to create processes that would generate profitable business. He started working on creating processes five years ago.

Understanding that technology was a key component of creating these processes, we began working together four years ago and combined our skills to “crack the code” of creating a high-margin, profitable book of personal lines and small commercial business.

A Balanced Approach

Most agencies focus their time and resources on obtaining new business. As we began to work, we realized that a balanced approach is the key to creating a profitable book of business. A balanced approach includes these four pillars of profitability:

  1. Keep: This is simply retention. Being able to “keep” the accounts you already have. Agents have heard for years that it is easier and more profitable to retain an existing client than it is to generate a new one. Yet many agencies don’t have processes in place to actively retain these important clients. The renewal process should start immediately after the first policy is sold. This is very different from the renewal event, which takes place six or twelve months later. A renewal process actively builds an ongoing relationship with that new client from the very beginning of the relationship.
  2. UpGrade: Every agency has additional revenue sitting in their existing book of business that is just waiting to be extracted. A simple example of upgrades would be identifying those individuals who have automobile liability limits below the agency’s recommended level. Dik created a process where individuals with lower limits would receive in the mail prior to their renewal a copy of their auto Dec Page with a big red stamp on it stating: “Your policy has coverage limits less than we suggest.” Every endorsement to raise limits represents additional profit for the agency with very little effort. It also significantly enhances the agency’s E&O protection. There are many opportunities to upgrade existing business.
  3. Round Out: It’s common knowledge that the more policies written per account, the longer that account will stay with you. By creating a process that identifies opportunities for additional business, this important marketing activity is not left to the whim of a CSR remembering to ask to quote a policy the agency does not yet write.
  4. Get More: Generating new business is important in order to have a healthy agency. Yet, new business is specifically listed last on purpose. While most agencies focus on generating new business, it is actually more profitable to focus on the three other pillars of profitability first – Keep, UpGrade and Round Out. Creating a “get more” process helps generate a constant flow of new business into the agency. Once that new business is put on the books, the other processes will help make that new business as profitable as possible.

Benefits

There are many benefits to building a balanced approach like the one described above. It creates more revenue for the agency and builds a higher-margin book of business. Actively pursuing upgrades and rounding out accounts helps build a much better book profile, which generally translates into better loss ratios for that book that help increase agency contingency payments. All of this makes for happier insurance companies who are then more willing to invest in and provide additional resources to the agency so that they can continue to grow.

The Long Haul

We said above that one of the keys to profitability is being willing to commit to the long haul. This is not a quick fix process. It takes time and discipline to implement and make sure it continues running. Those agencies, however, that are willing to commit to the process will see results – over time.

5 by 5 Process

We believe a reasonable goal is what we call the “5 by 5 process.” When you grow the following five areas by 5% over five years, you will then experience balanced growth. The five areas are:

  1. Average policy premium: An active UpGrade process will help you increase your average policy premium.
  2. Average policies per account: An active Round Out process can’t help but increase your average policy per account.
  3. Retention (.5 each year): We understand that it is really hard to affect retention, so we cheated here a little bit. If you can grow your retention rate by half a percent per year, you are doing well.
  4. New clients: An active marketing program will help you generate new business so you can create 5% new clients each year.
  5. Overrides and bonuses: Finally, you should have at least 5% of your revenue being generated from overrides and bonuses received from your insurance companies.

An Example

To illustrate these points, let’s turn to Knight-Dik Insurance again.

The agency began experimenting with generating new business by purchasing Internet leads. They started by purchasing 100 leads per month. They determined that they needed an 8% close ratio to break even. Ross was skeptical at first about the quality of these leads: “They are just looking for a cheap price; they won’t convert; they won’t stay.” But even with these reservations, Dik committed to working on creating a system for several months.

The marketing process Dik created was managed by individual CSRs within the agency. When a lead was received, it was immediately entered into the marketing system and an e-mail was generated automatically to tell the prospect that the agency was working on a quote. When the quote was completed, they sent an e-mail with the quote to the prospect. They then created several follow-up steps to contact that prospect by e-mail and phone. One of those follow-up steps included an e-mail with a video of the producer talking to the prospect.

They continued to track results and refine the initial contact and follow-up process. After some experimentation, they added an additional step to the follow-up process which ended up doubling the response. They printed out a form letter and mailed it with an agency brochure to the prospect. This simple step increased the number of people who responded to their follow-up requests. This is an example of how to combine high-tech and high-touch into the process.

We mentioned above that the renewal process should start immediately after the policy is sold. Every new client to the agency is started immediately on a “New Client Welcome” process. The first e-mail (or letter) goes out welcoming the new client to the agency. Eight other touches then are automatically sent to the new client over the next ninety days. That client should feel very welcomed to the agency and will hopefully not bother to shop when the policy comes up for renewal.

Knight-Dik continues to purchase Internet-generated leads. Today their close ratio on this business has been as high as 20% with an average of 11-15%. They started purchasing personal auto leads but now focus primarily on homeowner leads. They have found the homeowners leads are generally better quality and they avoid direct competition with GEICO and Progressive Direct. Because they have an active round out process, they work on picking up the automobile later.

Conclusion

Generating a profitable, high-margin book of business requires a balanced approach to marketing and sales – built on processes that are sustained over the long haul. Creating a solid foundation for your agency requires that you “Keep” the business you have (retention), “UpGrade” coverages so you can extract the money sitting in that book (and provide better E&O protection), “Round Out” each account with as many policies as you can, and “Get More” business by taking advantage of the transformation that is occurring in agency marketing.

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Strategy First; Technology Second

In a previous post I stated the case for why an agency that wants to grow must have a comprehensive marketing system. I ended with this paragraph:

Technology is available to help you manage your marketing system. The first step is to understand the need for marketing. Then, create a marketing strategy for the agency, implement that strategy, and monitor its effectiveness. If you do all of these things, you can’t help but become more successful.

As a result of recent conversations I’ve had with various people within the insurance industry, I want to emphasize that creating an effective and engaging Web site is only 25% of what’s necessary to be successful in growing your agency. The questions I’m receiving now from agencies include, “Can you recommend a Web designer?” or, “Can you help me with search engine optimization?” The first question should be, “What marketing strategies can we implement that will help us grow a profitable book of business?”

Technology doesn’t market. A Web site doesn’t sell. These are simply tools that help an agency support a well thought out and developed marketing strategy. Strategy should always come before technology. Only after the strategy is created should you look for the technology tools that will help support and implement the strategy. When this process is reversed, the likelihood of failure is much higher.

Your Web site could have the best design and most compelling content and engaging video, but if you don’t have a strategy in place for what to do with the prospects who visit your site, you will fail to convert them to clients. What is the strategy that will bring prospects to the point when they finally make a buying decision? All the technology in the world is useless if it doesn’t result in a sale.

Opportunity awaits

I fully support industry initiatives like the new Personal Lines Growth Alliance. There is tremendous opportunity for an agency to build a high margin and profitable book of personal lines and small commercial business. And technology is playing a significant role in making this possible.

A successful personal lines and small commercial strategy needs to include at least four elements:

  1. Keep: Keeping the business that you already have is the core of a profitable book.
  2. Upgrade: Adding additional coverage to existing policies is the most profitable revenue you can generate. It also goes a long way to enhance your E&O protection.
  3. Round Out: Adding new lines of coverage or policies cements your relationship with clients and helps you retain them longer.
  4. Get More: New business generation is an important part of the overall process.

Notice that generating new businesses (#4) is only one-quarter of the overall strategy of building a profitable book. The other three items will generate more profit than just relying on obtaining new business.

Remember, make sure you have a strategy first. Then—and only then—look for the tools to implement your strategy.

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Agents—Take Notice

According to the most recent Independent Insurance Agents and Brokers of America market share report, independent agents wrote 80% of the commercial lines premium in 2007. The numbers, however, are not so rosy for personal lines. Direct writers and other types of non-independent agent distribution models accounted for just over 65% of the personal lines premium written that year.

Independent agents gave up on the personal lines market a number of years ago. We need to start working on taking it back.

Cindy Donaldson is the new marketing director for Founders Insurance Group in Torrington, Conn. She joined the agency just a few months ago from outside the insurance industry. She highlights her personal experience in a recent blog post about the issues facing independent insurance agencies and personal lines.

In the post she tells the story about a tradition in her town where the local paper publishes comments from graduating seniors. Her son’s comment? “You can save a bunch of money off your car insurance by switching to GEICO.”

Donaldson goes on to explain her view on how agents need to respond:

“In all fairness, Max wasn’t trying to be obnoxious or hurtful—he, like most Americans, has been overrun with images of talking money, geckos, and cavemen. He hears the gecko’s advertising lingo several times a day—and as he put it, “Mom, it was just a joke—it doesn’t mean anything.” GEICO, whether we like it or not, has become a part of pop culture in our society and that does mean a lot. They have mastered the art of inbound marketing—they have people like my son chanting their mantra constantly.

Heck—I’ve done it here in this blog. When a company’s logo, saying, or name becomes a part of pop culture, their Chief Marketing Officer gets a big, big bonus. It truly is the holy grail of the marketing department to reach that status.

So why is my son’s comment to freshman so important that I’m writing about it? Max’s generation will soon be the generation with the buying power, and how they receive information—including advertising—will determine what and how they buy. If I wasn’t the one purchasing my children’s car insurance and advising them on the importance of having an advisor look at their individual risks—my children would probably be wooed by the influence of advertising and assume that everyone is buying from the gecko and ergo they should too.

Independent insurance agents need to take notice. No longer can we sit back and wait for the phones to ring, or assume that the children of our clients will automatically become our clients. We can’t compete with a multi-million dollar advertising budget—so we need to connect with our clients in other ways, by creating our own inbound marketing strategies.”

I couldn’t agree with Cindy more.