The "Mother-Child" Commercial Lines Sale


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by Alan L. Shulman, CPCU

When you attempt to sell Commercial Lines, you can project yourself as either a generalist or a specialist. In virtually all cases, the specialist will achieve greater success.

Specialists can follow traditional association sponsored marketing strategies, such as CNA's excellent CAM program, or create their own business insurance programs employing the dual concepts of 'policy repackaging' and 'mother-child' marketing.

Policy repackaging, as introduced in Agency Ideas newsletter, allows agents to actually invent their own Commercial Lines packages. These agency-originated programs are created (for HVAC Wholesalers, as an example) through the careful combination of standard insurance policies and prospect-specific agency services. Using this imaginative marketing technique, unique package programs can be offered to prospects, instead of ordinary insurance. Repackaging allows agents to carve out a self-generated advantage in the highly competitive Commercial Lines marketplace. To be successful with these techniques, you'll need to select your target markets, create your programs, and promote your new offerings.

One of the most potent and least recognized methods of target marketing is using the mother-child approach. The basic premise behind this method of prospecting is as simple as it is effective.

Start by identifying targets in your sales territory that have established symbiotic relationships, such as the general and subcontractor. Then for each set of targets, decide to work from the inside out, or from the outside in. An example of the former includes soliciting the insurance of the 'children,' the heating, air conditioning, plumbing, and electric contractors who do business with the 'mother,' an HVAC wholesaler whom you already insure. Another example is when you insure an auto parts wholesaler. This can lead you to writing the business of the service stations, collision shops, and repair operations that they supply regularly.

The outside-in approach also can be highly successful. If you already write a number of 'child' accounts, such as restaurants, you can solicit their suppliers aggressively. These might include produce companies, restaurant supply operations, and meat wholesalers.

We prefer the mother-child method to random prospecting, as it helps you to focus on leads where you already have an 'in.' You can find a source of such leads on a mother's or child's outgoing and incoming Certificates of Insurance. This approach is enhanced further when you have a strong relationship with your commercial accounts. Ask these clients for a letter of introduction, and the names of customers and suppliers they recommend.

Once you have identified the groups of prospects that you intend to solicit, you'll need to design a Commercial Lines package for each targeted group.

Begin by deciding which services to combine with your insurance coverages, keeping a constant eye toward marketability. When making your selections, you can include both ordinary and prospect-specific services to include in your repackaged programs. Highly routine agency services, such as MVR reports, building replacement cost appraisals, and 24-hour claims service, can be packaged easily, even though they're not unique to your agency. After all, in its TV commercials, Allstate lays claim to the 'safe driver discount' as if it were the only insurer to offer it! Veteran agents might recall that Allstate used this same successful marketing device in the 1970s when they claimed the universally available 'compact car discount' as their own.

In contrast to your routine offerings, prospect-specific services must vary for each one of your targeted groups. For example, a seasonal contractor will appreciate a payment plan that will not bill him while he's temporarily out of business and out of funds. A computer reseller will relish an agent taking the time to review his insurance limits periodically to account for the volatile value of his inventory. Target-focused loss control and risk management operations, provided by the agency, might also be included. Be careful to avoid overkill. Add only a reasonable number of value-added services. Let your selections both enhance the business operations of your prospect and the marketability of your program.

Since your prospects have never seen your agency-created package program, it's best to pre-approach them with some printed material, before calling for an appointment. You might promote your offer by using forms marketing, or if you prefer, through a standard letter of introduction. Always include a brief Executive Summary to highlight your program's main benefits.

Categorize agency services, in the Summary, as those you'll perform prior to making a proposal (primarily a needs analysis profile); those you'll provide with the proposal (problems discovered and suggested solutions); and finally, those you'll provide only after your proposal is accepted (MVR reports, 24-hour claims service, coverage and pricing enhancements, etc.).

Use desktop publishing to generate limited quantities of your own marketing and sales materials. You can borrow liberally from insurance company brochures, but keep in mind that you are promoting your agency -- not any specific insurance company.

Your Commercial Lines marketing and sales efforts will be enhanced by offering unique combinations of insurance protection and target-focused services, instead of simply selling off-the-shelf policies. Use your knowledge, experience, and contacts to build a database of 'mother-child' targets. Then  solicit them aggressively.

Don't ever expect to attain the perfect program. Ask each prospect which of your services are important to them and which are not. Modify your list of services as the marketplace requires. Remember, since your program is completely in-house, you can make key changes on a moment's notice!

Portions of this article are reprinted with permission from Agency Ideas newsletter.

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