Continued from this article.
Personal Lines competition continues to intensify, as more and more players enter the marketplace. However, independent agents can fight back — if they're willing to make some fundamental changes in the way they do business. In this two-part document, Peter van Aartrijk presents 17 ways to help you build your Personal Lines book. If implementing all of them seems impossible, try three or four. But make a commitment, and go for it.
[Note: Because this article was originally published in 1993, names, positions, and employers might not be current; but the information is as pertinent today as it was at the time of publication.]
8. CROSS-SELL TO FILL IN THE GAPS
If you're big in Commercial, why not launch an effort to market Personal Lines to your business clients? Ask every Auto customer about their Homeowners or Renters needs. Other possibilities: Floaters, Flood, Umbrellas, Marine, RVs — even Disability and Life. These are the warmest leads you have.
The average family has five insurance policies, but the average agency writes only 1.3 policies per family, according to Bates. By launching a sustained effort to round out accounts, she feels that agents easily could add an average of a half-policy per account.
“Most agents think they have done an excellent job cross-selling, but they haven't,” Timm says. “We thought we had, but we hadn't. The chance for growth in our client base was tremendous.” Today, his agency is 87% cross-sold.
Check for key missing coverages. “A simple review of your Homeowners files, coupled with a telemarketing follow-up, could produce some nice [flood] premium,” says Dave Meehan, president of Bankers Insurance Group, a St. Petersburg, FL., agency specializing in flood risks.
The agencies conducting the most consistent, aggressive sales programs are the least likely to get hit with E&O claims, Bates says. That's because they can't be faulted for at least offering consumers the coverage.
9. COACH YOUR CSRS TO SELL
CSRs should be “coached and managed to do a better job of meeting the customer's needs,” Cunningham says. “They often don't understand that asking questions about the customer's insurance programs, recognizing opportunities, and making recommendations can be part of their jobs. They should role-play these activities and feel comfortable with them.”
Adds Bates “CSRs often feel their job is to provide damn good service. They talk to their clients in such a nice way and don't even realize they could sell all this other insurance. Organize a plan and make CSRs realize they are really salespeople, even though this might be unpalatable to them,” she advises. Some CSRs, for example, can be judged successful if all they do is keep their book of business cross-sold.
10. TAKE ADVANTAGE OF CO-OP ADVERTISING
To produce warm leads, companies are often willing to share the cost of direct mail and advertising. A close partnership with Safeco has allowed Timmco Agency to send out 100,000 direct-mail pieces in one year.
George Johnson, vice president of Safeco's Property & Casualty marketing, says that a typical mailing goes to 10,000 addresses that an agent is targeting. The average response is 4%, of which 15% to 20% can be converted to sales.
Some companies will also co-op programs to cross-sell existing customers. Fireman's Fund and Chubb run co-op sales and marketing programs for agents selling affluent Homeowner programs. “Fireman's Fund offers such help as brochures, sales invitations, telemarketing training, policyholder newsletters, stationery, in-house customized leads, and sample sales letters,” says sales and marketing executive Joe Galardy.
11. IF YOU CAN'T BEAT `EM, COPY `EM
Many people around the industry say that it's time to stop fighting the direct writers and begin emulating their tactics. “If you look at State Farm and Allstate,” Wilson says, “you're required to get so many x-dates and make so many sales.”
“You have to write Personal Lines like a direct writer,” Platt says. “You have to determine what markets you want to be in, and you need a system of marking x-dates. You need to be continually expanding your sphere of influence and grafting in new people,” he adds. “You have to make a commitment to solicit or you will be selected against if you just sit back and take it.”
Progressive's COO says that independent agents should learn from the experiences of major agency companies that have left Personal Lines. “I'm interested in agents who say, ‘Let's find a new way to do this because what we did in the past isn't working so well.' That means developing a closer relationship with a single company, with the agency stressing sales, and the company policy and claims service,” he says.
12. USE COMPENSATION TO MOTIVATE
Tie CSRs annual increase and/or bonus to sales and service goals, use of automation, retention of the business, educational accomplishments, and teamwork. Says Cunningham, “Agencies are experimenting with new compensation arrangements in an effort to keep their costs in line while also rewarding their best people.”
And have some fun. Anyone working at the Eidson agency gets five bucks for bringing in an x-date that goes to a quote — even if it isn't written. Eidson calls this a “bird dog” bonus. The result: Eidson employees are likely to ask for x-dates outside the workplace. And 80% of new business comes from referrals.
13. GIVE YOUR CUSTOMERS THE SERVICE THAT THEY WANT
“Many agents assume they they're providing good service when they're not,” Cunningham says. “Most agencies don't conduct annual reviews. They don't offer Life insurance or do follow up on claims. The customer might accept that the agency is closed at lunch, but might not like it. Written communication might not be clear and friendly.”
Would your clients like you to stay open later at night, or on Saturdays? Why not send a short survey and find out? Kwicien, a former sales manager for a direct writer, says, “The battlefield in this decade will be who can provide the best service to the customer when it's convenient for the customer, not to the agent or company.”
14. KEEP AN EYE ON CUSTOMER SERVICE CENTERS
Several major companies have opened centers to offer such service support as claims handling, while their agents focus on sales. You usually give a couple points of commission back to the company in exchange for a lower price and/or reduced effort on your part.
Opinion among agents ranges from enthusiasm to hostility. Timm is writing more than $2 million in Personal Lines through three other agents and one CSR. Although his agency used to have a 50/50 business split, he's now at 80% Personal, with 4,000 customers around Oregon.
Servicing is “a pleasurable but not productive job,” Timm says. Safeco's service center employees in Portland do a better job, he claims, because they're always available via a toll-free number, something he can't offer. “Our clients can call from Hawaii or California when they're on vacation with questions on rental cars.
“I hate to admit it, but frankly the service center is better in most cases,” he adds. “You think you're such a darn good service provider, but the fact is that I sat and listened to these service center folks, and they are friendlier and give more consistent service.”
“The customer service center is the most serious threat to the Independent Agency System,” counters Eidson, who says that insurers have opened the centers because the agency/company interface hasn't moved fast enough.
“We aren't in manufacturing; we don't make widgets. We're in the service business. We might be poor salesmen, but by and large the Independent Agency System does a super job on service. Otherwise we'll have to be like car salesmen: Sell, sell, sell, because the only real commission will be on new sales,” he adds. But Eidson acknowledges that a producer who makes a lot of mistakes in servicing might have no option but to go into a service center.
15. CONSIDER A CLUSTER
Forming partnerships with other agencies means that you can wield greater premium power with potential markets. Platt's shop is part of a cluster group covering 35 individual agencies in five states, with total premium volume of $100 million. The cluster gave him an entree to the Hartford and Metropolitan (under customer service center contracts).
16. AUTOMATE!
Automation can increase your productivity through transactional filing: As correspondence arrives, it's entered in the appropriate client file on a computer and later filed chronologically in paper form. This frees up the CSR to focus on sales while an assistant files renewals and endorsements. You can also use rotation servicing: Instead of splitting up clients alphabetically, CSRs work with anyone who calls. The result is quicker response and fewer returned calls.
“CSRs must learn how to work with an electronic file and how to manage the conversation with the customer so they can complete the transaction while still on the phone,” declares Cunningham. “People just want the job done when they call; they don't want anyone to call them back.”
17. FIND YOUR OWN PERSPECTIVE
“My goal is not to be the biggest agent in Longwood, Florida,” says George Frey, who owns the George Frey Agency. “I want to be the most profitable.”