10 Steps To Overcome Competition


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Remember the first time you experienced a Chinese box set? As each box opened to reveal a smaller box, you wondered with childlike curiosity whether it would ever end. Lately, competition in business seems like a set of Chinese boxes-in reverse. It often feels as if we are in the smallest of boxes trying to fight our way through larger ones. As we overcome a competitive hurdle, we find ourselves faced with another, larger competitive force.

The small local agency fights a larger local agency, which in turn fights a small regional agency, which fights a larger regional agency, which fights a small national agency fighting a larger national agency. And now, here come the banks!

I've heard many agency owners say that the answer is to become larger than the competition through mergers and clusters. I'm not averse to either mergers or clusters, unless the reason for the change is to become more competitive. You see, mergers and clusters serve not to help you beat the competition but to move you to a different competitive level.

Here are 10 steps to beat the competition through effective planning and marketing:

1. Define your agency.

Most businesses send out confusing messages. There is neither consistency nor continuity in their marketing or advertising because they've never taken the time to define who they are and what they do. Even worse, the owner may dictate his definition of the business-usually a far cry from how the employees and customers perceive it.

Meet with your employees and some of your key customers for a brainstorming session on the definition of your agency. What are your strengths and weaknesses? Do your customers view your agency as a partner, consultant, friend, expert, or simply a vendor of insurance? Do your employees see the agency as a service organization, a sales organization, or a place to draw a paycheck?

Although many definitions are based on in-house perceptions, I prefer to see an agency define itself as its best customers do. What are the reasons your best customers do business with you? Even if their perceptions vary from yours, I'd rather adapt to what's working than continue to force a square peg into a round hole.

2. Focus On Your Employees.

Yep, that says employees-not customers! Satisfied customers do not create satisfied employees, but satisfied employees do create satisfied customers.

Whether your agency is large or small, how frequently do you show a positive interest in the personal and work lives of your employees? Is your primary contact a simple 'Good morning' as you past their desks on the way to your office-womb? Or do you make a point of strolling through the facility regularly just to chat with the troops? Do you jot them positive notes on a job well done, or relegate your commendations to annual appraisals? When was the last time the agency provided a birthday cake for an employee's anniversary, or simply convened the entire staff for a social hour to celebrate a big or small success?

The simple act of communicating with your employees will open the door to job satisfaction and pride in performance, which in turn leads to a book of satisfied clients and increased retention.

3. Focus On Your Customers.

Billions of words have been written on this topic, so let me pose just one simple question: What would happen if, in each and every contact, you treated the customer as if he or she were a potentially new and large account?

4. Focus On Your Niche.

Every agency has a niche, sometimes two or three. If it is not a specific risk, it may be a geographical area. If this niche falls within your agency definition (Step 1), stick to it. Too many businesses fail from 'the grass is greener' syndrome: Just as you're beginning to make headway within a certain market segment or niche, you become obsessed with the opportunity presented by a new niche.

This is not to recommend against expanding into new markets or niches; but do it wisely. If your agency can handle one new market per year, limit your expansion to that. New niches should always be in the research and review pipeline, but make sure that you are solidly entrenched in your current niche marketing before expanding your efforts.

5. Study And Emulate Success.

As an IMMS member, you are already ahead of the game in this respect, depending on how much you use the materials. Learn from the experiences of your peers. Imitate their successes and avoid their failures. As with any relationship, this is a two-way street: You have to give as well as take. Interact with fellow agency owners and share your experiences. This develops a camaraderie and support system that has proven to be a mainstay in the most successful agencies.

6. Become Involved.

Every business operates within a community: local, regional, or national. Most of the truly successful enterprises I have known maintain a corporate philosophy of giving back to the community. Do you?

I'm not just talking about membership in the Rotary. I mean getting involved on a hands-on basis: perhaps fundraising for an orphanage or hospital, or providing assistance in the schools. Don't forget to support and promote such participation by your employees.

7. Focus On Your Marketing.

Most marketing and advertising is very helter-skelter, due to the reasons pointed out in Step 1. If you haven't defined who you are and what you do, how can you market your business?

Conduct a top-to-bottom analysis of all your current marketing, from Yellow Pages and newspaper advertising to public relations. As you review each element of marketing, ask yourself these questions: * Does it convey our definition of the agency determined in Step 1?

  • Does it coordinate with all of our other marketing activities?
  • Does it specifically cultivate our defined niche(s)?
  • Are the results of this marketing element measurable?
  • If so, can a cost-to-benefit assessment be made?
  • Should we keep it as is, change it, or discard it?

The answers to these questions will undoubtedly prompt the need for changes in your marketing. Change can induce fear, but you can overcome the fear by treating the change as an opportunity for growth.

8. Plan, Plan, Plan.

Marketing is often the poor stepchild of the agency planning process. Caught up in the operational numbers of management, marketing tends to be minimized as another grouping (relatively small) of line items in the agency's business plan. That's OK if the line items are based on an autonomous marketing plan that covers all the bases.

Granted, there is always the chicken vs. egg argument, but without effective marketing to generate business, you won't need to worry about any budgetary line items. In recent years, a lot of energy has been invested in teaching agency owners how to manage their business, and some have lost sight of the fact that an agency is based on sales generation.

9. Maximize Existing Business.

It's the same old story: The easiest-and least expensive-sale is to an existing client. Still, agency after agency devotes 99% of its sales energy to generating business from new clients.

Why? Is it fear? Are we afraid to rock the boat? Is some genetic mutation forcing producers to think that customers might jump ship if we try to sell them something else? This problem is not unique to insurance. Every business faces it.

The successful businesses in every industry are the ones that maximize their business with every client. Most Commercial Lines agencies could grow by leaps and bounds if they went after all the potential business available from existing clients. For instance, let's say one client is a manufacturing concern with 45 employees. You currently write their Property and Casualty, Workers' Comp, Medical and other exposures intrinsic to that business. Each year after renewal, you breath a sigh of relief and pocket the revenue generated from their premium. A job well done? Maybe, maybe not!

Have you considered the individual insurance needs from Auto and Home to Life and Disability for each of those 45 employees, from the president on down, and their families? Making some general assumptions, that account might have a potential for 45 Auto policies covering about 100 vehicles, 20 Homeowners policies, 25 apartment dweller policies, 50 or more Life insurance policies, a few Boat and Recreational vehicle policies, and probably several more Commercial accounts from employees (or their spouses) who own or run businesses on the side. Each of the employees that you add to your book of business brings another element of growth by way of referrals -- if you ask for them!

This is a simplified scenario, but I think you have the idea. Maximizing goes well beyond account rounding or cross-selling. It means that you position yourself to take advantage of every opportunity existing within the overall scope of a client relationship.

10. Be Positive.

Any business owner is surely familiar with the night tremors. You know what I mean: The brain wakes us up at about 3 a.m. and says, 'Lets have a meeting! There are some problems that need to be discussed, molehills that need to be built into mountains.'

Although I haven't found a total answer for quelling these middle-of-the-night wakeup calls, it helps a lot to read positive, motivational material before bed. As an agency owner or manager, you need to engender a positive spirit before arriving at the office. If you normally arrive with a dour look and a sour attitude, you might as well sell the business.

Nothing is more contagious than attitude. If you're negative and constantly grumbling about problems, your employees will soon mimic your demeanor, and the business will head toward despair. Similarly, a positive attitude about the daily opportunities for growth, learning, and change will spread like wildfire among your employees.

Henry Ford once said, 'Competition is the keen cutting edge of business.' Yet many of us consider competition the enemy. Generally speaking, it is we who are our own enemies, while the competition spurs us to achieve.

Jack Burke is the president of Sound Marketing, Inc., which specializes in audio and video productions for corporate marketing, communications, and education. He may be reached (800) 451-TAPE.

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