We all tend to come together in times of trouble; and this is definitely a troublesome time for most businesses. When you share your pain, your clients will identify, and bond, more closely with you. In this document, Jack Burke urges you to work together with your clients from both an empathetic and a sympathetic position.
Since the advent of the hard market, I've sometimes stated that the biggest job an insurance agent has today might be not to let their customers know how much they're enjoying the increased revenue from skyrocketing premiums. This is usually a tongue-in-cheek comment, but there's a certain amount of truth in it.
A hard market does increase an agency's earnings, which is all fine and good in a solid economic environment. That's not the case today, as we watch our economy dangle precariously on the edge of recession. Although we might be enjoying the hard market, many of our clients are struggling to survive.
A large regional stockbrokerage with a very successful history is losing money every day. Many traders and back-office employees have been laid off. Every manager is being told to find a new expense to cut every day — no matter how large or small it might be.
A family-owned Los Angeles clothing manufacturer has grown profitably for four decades and now finds itself on the edge of collapse. The company is laying off 30-year employees; others have seen their work week shrink to three or four days.
Those are just two examples of the problems facing the clients that you insure. They're not looking to “beef-up” their insurance, but to purchase only as much as they need to survive for another day, week, month, or year. It's tough out there!
Since buying insurance ranks right up there with taxes in the minds of most business owners, the question becomes, “How do you maintain and nurture the client relationship under these circumstances?”
I believe that human beings bond through their mutual problems much faster than through their successes. Now this is atypical thinking for most of us. But years ago, I had a friend who was going through some tough times. After dinner one evening, he commented that he couldn't associate with me anymore. I was perplexed by his comment and asked him to explain. He said that my life appeared to be going exceptionally well, and that only made him feel worse. It brought about feelings of jealousy and envy. I told him that I, too, had plenty of difficulties in my life. He replied, “Then why don't you share them? You only talk about the good stuff!”
Where is all this going? The reality is that life in the insurance industry today isn't necessarily a rose garden. Granted revenues are up, but how are your profits doing? Like other small businesses, agencies are also facing escalating costs — including insurance expenses.
I recently had a phone call from a small agency owner who subscribes to our monthly CD program, Audio Insurance Outlook. He hadn't renewed his annual subscription and wanted to explain why. It turns out that the agency had lost the lease on its office and was forced to make an unexpected (and costly) move into new quarters. Simultaneously, they had received a non-renew on their E&O coverage. Placing it elsewhere had nearly doubled the premium. They had to begin cutting any and all discretionary costs, including subscriptions such as ours.
Most agencies are facing similar increases in the cost of doing business — just like their clients. Health insurance premiums for small business owners have increased dramatically (ours has doubled during the past two years with decreased coverage). Add to that your E&O coverages, Property, and Workers Comp, plus all the other increases in your expenses (rent, real estate, utilities, etc.) and you begin to realize that you might have more in common with your clients than you thought.
Share your pain with them. Empathize with their difficulties and explain that you're facing the same problems. Tell them about the things that you're doing to help control costs. Talk about lobbying efforts that might affect them, as well as you. The Med Mal industry is learning to keep clients informed about efforts of agencies and companies to seek tort reform and other measures to stabilize rates.
When you share your pain, your clients will identify, and bond, more closely with you. Remember, when you need a friend, it's too late to begin making one.