Astonish exec shares lessons learned from working with hundreds of agency customers
By Nancy Doucette
About four years ago, Astonish hit the insurance agency business like a house on fire. And some hit back. While the organization had plenty of agents who swore by the results they achieved using the Astonish system, there were also many who swore at them. Those who decried Astonish said the principals were loud and brash. Naysayers said the products were expensive and the long-term contract onerous.
Then why is Astonish still garnering new agency customers at a rapid pace? Because the results shown by agencies that truly adopt the system are in a word—astonishing.
We talked with Adam DeGraide, CEO and founder of Astonish, about some of the perceptions and misconceptions. He admits that some of them are right on target. "We were loud," he says. "When we started out we felt like we had to scream because independent agents weren't paying attention to the Internet. But there's been an awakening. There's more awareness. You can't go anywhere without a carrier, an association, or a consultant talking about the need for agencies to serve customers the way they want to be served—which is on the Internet.
"What's happening in the insurance industry right now is you have a lot of people providing social media advice, Web site development and e-mail marketing tools. These are partial solutions. Astonish can put the whole puzzle together.
"There's a lot of confusion about what Astonish does and doesn't do," he continues. "Astonish is a digital marketing company that helps agents find, sell, and keep more customers profitably. It's a blend of technology as well as consulting and training. We call it 'technology-assisted selling.'
"At the end of the day, none of that is going to fix the real root issue which is disengaged agency principals who find it hard to run their agencies in the modern world," DeGraide points out. "Agency leaders and/or owners need to be actively involved in running their business and encouraging their people to get on the road to digital success.
"At the core of it, our system helps owners and principals fall back in love with their business, change the way they run their agency, and more effectively sell and serve the modern consumer the way he or she wants to be sold or serviced."
As for what Astonish doesn't do, DeGraide says it doesn't run agencies or sell insurance.
Getting a return on investment
In the past, DeGraide says, negative comments were circulated by individuals who bought the system but didn't properly implement it. "Those who buy our system and don't use it are in no danger of getting results," he quips.
"But you have never heard anything negative from any Astonish customer who has bought the system and used it," he declares. "On average, agencies that buy, and use the system are experiencing a 5.5 times return on investment." DeGraide says that number was revealed in a recent ROI analysis done by Astonish for a major carrier. "Astonish agencies on average spend about $250,000 on digital marketing over a five-year period, and make about a $1.35 million return," he reports.
He says another carrier study showed that an agency using Astonish is 50% more likely to close an Internet new business opportunity than a non-Astonish agency.
In both studies, DeGraide says, the carriers recognize that these results aren't attributable strictly to the Astonish software. "They're attributing a lot of it to our consulting and training side as well."
Astonish isn't for everyone, he notes. "If they don't believe, they're not going to be successful. But if they believe and they're willing to work and use the system, the tools, the technology, and the training, they cannot help but grow."
The account rounding imperative
Digital marketing, he points out, isn't only about winning new business. "It has everything to do with rounding out existing business and keeping what you have. Are we going to help an agency with new business? Of course. But the most important thing is to 'stop the bleeding'; we're going to help the agency retain the customers it has by leveraging technology and automation through the Astonish Virtual Profit Center while helping staff learn to communicate with customers the way they want to be communicated with."
In DeGraide's experience with independent agencies, account rounding is a learned behavior and Astonish provides its customers with the necessary training and technology so they're comfortable asking for the additional business. "In our training division we have former agency owners who have built, run, and sold successful Internet agencies. Before selling his agency, one of our trainers developed $8 million in premium in less than two years, solely off purchased e-mail leads." DeGraide says Astonish has more than a dozen trainers all over the country. The firm also offers online training, video training, and a library of information in its Astonish University.
"If agencies truly are in the service business, they won't let the customer off the phone until they know that the customer is covered in all areas of potential loss," he says. "That really is at the heart of service." So if someone contacts the agency for an auto quote, Astonish shows agencies how to go after all lines of business including commercial insurance, which DeGraide says is the fastest growing segment on the Internet.
He notes, "Some in the industry have the impression that we push agencies to sell, sell, sell. Actually that's not a wrong impression. We are that way. We make no apologies about it. But that's the loving thing to do. It's not loving, it's not serving your customer to sell the lowest limit auto policy and not do a needs assessment to see where the customer's potential exposures are."
The importance of metrics
In his meetings with successful agency owners and principals, DeGraide says he's concerned when he hears them report that they don't do any marketing or that their number one source of new business is referrals. Too often agencies are dependent on their longevity in the community, their sponsorship of the local Little League team, or their participation in the local chamber of commerce to attract business. But when he asks these principals for specifics—how many referrals did they get last month, for instance—they can't answer. "They don't know their metrics," he observes.
"These are successful agencies," he emphasizes. "Imagine how much more successful they could be if they knew the metrics for their telephone, e-mail, and social media campaigns; their interactions with walk-in customers; their referral process; the unsold follow-up; the sold follow-up; the service follow-up, and the renewal process. Imagine if they knew the numbers—had a process—how much more effective and efficient their agency would be and how much more effectively and efficiently their customers would be served."
DeGraide points out that Astonish, through its Virtual Profit Center, is able to track agency metrics so agencies don't have to wonder about which campaigns, processes, or people are effective and successful.
As for the costs for these services, DeGraide says Astonish has systems that start at $495 per month and can go up to $5,000 per month. "We customize the system based on the size and the goals of the agency," he says. "We price the system based on the revenue, number of employees, and what product lines they're trying to generate results for.
"For the full Astonish system—suitable for agencies with five-plus employees and over $500,000 in revenue—we offer a three- or five-year contract with monthly payments. The majority of the work we do with an agency is in the first 12 to 18 months so the contract gives us the capital we need to match our expenses to our revenue, while giving the agency a flexible, affordable monthly payment," he explains. "Our system automates 90% of the daily activities that CSRs and producers used to do—empowering them to do what they do best—quote and bind insurance premium."
Changes at Astonish
When Rough Notes wrote about Astonish in July 2009, the organization had 15 employees. Now the firm, currently at 110 employees, is on pace to expand staff to 150 by year end. DeGraide is also proud to report that the company now has 18 full-time programmers working exclusively on the Virtual Profit Center. Management has been expanded as well with the addition of a new chief financial officer, a new chief technology officer, and a new digital marketing officer. Plus Astonish's board now includes Dennis Chookaszian, former chairman and CEO of CNA. "We're very excited to have such a seasoned industry veteran and forward thinker help us steer the ship," says DeGraide.
DeGraide notes that Astonish's recent partnership with Serent Capital is also helping the company beef up its staff and build out its Virtual Profit Center. "The VPC is the heart of what Astonish does. It's our CRM tool that handles all the marketing and measurement activities for our agency partners," he explains. "We've made a lot of changes with personnel and we're reinvesting in the company to serve our clients more effectively.
"Our mission is to change the way insurance is bought and sold through the local distribution channel," DeGraide concludes. "To accomplish that, we're helping agency principals look at their business in a different way—through the eyes of the modern consumer—so their business can be run more profitably. We train their people on better processes to respond to today's buyers—that includes implementing technology and digital marketing strategies. In the process, people find they're having a great time while they're working. When everyone is making more money, usually they are having more fun. That's at the heart of what we try to do each and every day."
For more information:
Web site: www.astonish.com