Make the shift
Agencies need to adopt a sales-centric philosophy
By Adam DeGraide
It's safe to say that the world has changed quite a bit over the last 20 years. The Internet alone has completely changed my life not only from a professional perspective, but personally as well. There's not a day that goes by that I'm not online checking my Facebook, visiting Web sites or e-mailing someone. And from an insurance industry perspective, technology has brought so much value and improved overall communications. But it hasn't always been this way, has it?
There was a time when first generation insurance agents opened their agencies downtown and depended on the local community to grow their business. Patrons would simply walk down Main Street and visit these agencies and other local businesses. Independent insurance agencies grew out of sheer demand for their products and services—not to mention their convenient locations. Soon, referrals played a major role in finding new customers.
And inevitably the shift from a sales-centric culture to a service-centric culture began. For years, independent insurance agencies relied on great service to sustain their business. But that strategy wouldn't last forever.
Here's the reality
Your customer is no longer strolling down Main Street searching for your agency. The modern consumer now lives online and clicks on Google Street to search for everything! The simple fact that consumers' buying habits have changed has made the process of growing independent insurance agencies more difficult. There's more competition and less loyalty than ever. Direct writers with gigantic budgets are trying to acquire your customers by promoting how easy it is to switch insurance by going online. The reason these direct writers are growing so fast is because they are focused on sales and rounding out their accounts. They understand that the more policies they can write for a customer, the less likely that customer is to leave.
Here's the reality. Until the independent insurance agency shifts from a service-centric culture back to a sales-centric culture, the direct writers will keep stealing your customers.
At Astonish, we believe in a "find, sell, keep" approach when it comes to our system and when it comes to our business. We understand that it's not only about finding new business; it's about capitalizing on existing customers and ultimately renewing them. The same goes for our agent clients. Our system helps independent insurance agents find, sell, and keep more of their customers profitably.
Even though this seems like a relatively simple business model, you'd be amazed at how many agencies focus only on "find" while neglecting 66% of the remaining solution. Yes "find" is an important part of growing your agency, but when you compare the cost of a new acquisition versus the cost of multi-lining an existing customer, the round-out will win every time. Once you can turn your marketing strategy into a math equation, the areas of concentration should be made clear to you.
Low hanging fruit
I have yet to speak to an agent who can say to me: "I have rounded out every one of my clients with every type of coverage I have to offer them. I desperately need new leads." That being the case, let's start there.
If you have a significant number of monoline policies, you are literally leaving money on the table. Chances are that someone who's already said "yes" to you once will say "yes" again. It's actually the highest potential conversion in our entire solar system! This is low hanging fruit. It's ripe and ready to pick.
But why doesn't this happen in every agency every day? There are actually a couple of major reasons for this. First and foremost, agencies are slow to make sales their primary reason for being in business. This is a systemic problem within the independent insurance industry today.
The other reason why agencies don't take advantage of growing their existing book is because there seems to be great confusion as to who's responsible for doing so. Is it the CSR's job or is it the producer's job? The answer is "yes." It's both of their jobs and until that becomes reality, opportunities will be missed. It can no longer be about agency roles, it must be about agency goals.
One of our clients, Charlie Downey from Downey Insurance who has offices in Massachusetts, Vermont and New Hampshire, recently came to visit the Astonish headquarters in Rhode Island and shared some impressive stats. Charlie and his team track everything! He understands the cost of acquiring new business versus rounding out his existing book which is why all three offices share the same culture and mission: "Service has become sales. Sales is service."
Charlie and his team capitalize on low hanging fruit and focus on account rounding their book. With conversion rates in the high 70% and a closing ratio around 90%, why wouldn't he? As a result, Charlie and his team have consistently produced an upward trend of newly initiated policies throughout this year while recently having one of their best months ever!
How did he do it? Downey Insurance takes a blended approach to writing more business. They clearly identified the effective use of technology, outlined definite objectives and goals, and executed with purpose. His team has made collecting e-mail addresses part of the process. They realize the more e-mail addresses they can collect, the more often they can stay in front of their clients and the more likely they are to maintain their average 98% retention rate. Downey Insurance is also leveraging Facebook, YouTube, Twitter and other social media to stay in front of their clients and generate new opportunities. He's averaging more than 50 new fans a month on Facebook and, in May, Facebook was his number- one referring site.
Downey Insurance has reached new levels of success due to the incredible leadership and drive of Charlie Downey, but also his team's understanding of the transparent statistical analysis of their business and his agency's united paradigm shift: Service has become sales and sales is service. They're moving forward and having more fun doing it!
What are you going to do?
Technology can help you find new customers and technology can help you sell and keep the ones you already have. No matter what you choose to do, you must choose to do something.
The modern consumer has more choices now than ever. Give them a reason to do business with you. Cultivate an active social community, utilize the media and resources available to you—build a strong, positive brand presence so that you can remain at the forefront of your customer's mind. Focus on selling and keeping your existing customers and you will undoubtedly grow your agency.
Adam DeGraide is a veteran Internet marketer, sales guru, entrepreneur, record producer, and motivational speaker. In 2006, he founded Astonish Results, and since then he has been encouraging independent agencies across the country to "Join the Internet marketing revolution, or get left behind!"