MARKETING DEPARTMENT VERSUS PRODUCER MARKETING
by the IIABA Virtual Faculty
Although your agency has a Commercial marketing department, you have the option of marketing an account yourself or using the marketing department. Most producers do it themselves since they have a perception of not getting a thorough and complete job from the department. Assuming that you have a completed submission, what do you do?
Recently, our “Ask an Expert” service received this question:
“As a broker at a large independent agency, what should be my standard expectations of our Commercial marketing department? We have the option of either marketing an account ourselves or using the marketing department. Most brokers do it themselves since they have a perception of not getting a thorough and complete job from the department. I have not been able to find a ‘best practices' type guide on marketing Commercial accounts. Can I assume that a complete submission has been delivered to the department and go from there?”
It's difficult to give a definitive answer since the philosophies and practices of agencies vary so greatly from one to another. In addition, without knowing the unique situations, skills, and personalities, the best we can do is speak in generalities. At least as food for thought, here are some observations and comments from our agency management faculty:
FACULTY RESPONSE
There are several dynamics at work here. Some producers view every account as personal income, but sometimes the producers allow the “perfume of the commission to exceed the stench of the account.” Good producers are often not good team players. They're sometimes highly individualistic and, in many instances, view their account (no matter how large or small) as the one that needs the “favor” from the underwriter. Also, if the producer does the marketing they have much less time to sell and can use this as an excuse for lack of sales.
A marketer, on the other hand, has three objectives: (1) place as much business as they can for multiple producers; (2) protect the agency's contingencies and reputation; and (3) use “favors” as prudently as possible and always in the best interest of the agency.
The producer will always work harder to place an account than a marketer, unless the marketer is compensated on placements and contingencies.
FACULTY RESPONSE
The first assumption is that you have the wrong marketing department if they can't do marketing better than the producers. If that were the case, why would any producer trust or use them?
However, if the results speak for themselves, then two things should be done:
1. Base the marketing department salaries (using an Incentive Compensation Program) on the percentage and commission volume of their successful placements in the prior year.
2. Measure the hit rate on both new business and renewals and compare the rate of the Marketing Department with that of the producers. To do this properly, you need to measure producers' results without any submissions to marketing for a period, and then check marketing results without any direct marketing by producers for an equal period. If the results are mixed, the producers will market those accounts that can be easily placed and give the Marketing Department those that would be difficult for either to place.
FACULTY RESPONSE
Most Marketing Departments with which I've been involved have failed or, at best, didn't do any damage, for all the reasons, and more, that the agent mentions as occurring in his agency. The ones that have succeeded have had one thing in common: Detailed procedures that dovetail with good job descriptions so that everyone knows what to expect. That's the key.
It doesn't matter, in my opinion, who does what as much as it matters that everyone is in agreement as to who is to do what. If in developing these procedures, the producers, staff, and management can't agree about what a marketing department should do, or on whether competent people can be found for the job — because Marketing Department incompetence is a common perception of producers — then decide whether a Marketing Department is in the agency's best interest. In many cases, it's not.
FACULTY RESPONSE
Much of the problem might indeed be a sales issue that has nothing to do with marketing. Marketing, administrative, and clerical chores for producers are far less threatening than going on a prospecting or sales call and facing rejection. Thus, many producers thrust themselves into marketing activities and work hard at justifying those efforts. Part of this justification, by necessity, is to denigrate the marketing department. It's a “smoke screen” that exists because many producers, even experienced ones, don't know how to sell. I work with these issues all the time and it's not rocket science. When producers know how to sell and prospect, like it, and are good at it, it's interesting to note that marketing problems often disappear.
Reproduced, with permission, from the VuPoint Newsletter of the IIABA Virtual University.