This document covers issues as diverse as agency budgeting, how to post an effective classified advertisement, and marketing carrier programs.
An agency's Commercial Lines marketing programs share a number of common themes. In order to write new business in target markets the agency must have:
- A carrier willing to sponsor competitive coverage and pricing for the target market.
- Enough prospects to justify the penetration of the market.
- A program to familiarize prospects with the agency and the product.
- A set of underwriting guidelines that will permit eliminating any accounts that wouldn't meet the carriers product underwriting guidelines.
- Sufficient producer time and commitment to sell the client the services and the carriers policies.
Do you know the lines of business for which your carriers have the best (or one of the best) products and underwriting understanding at a fair (lower half of the spectrum) price? If not, find out before launching a marketing program. If none of your carriers have products that put them in the forefront of that line of business, you wont have a successful marketing program. Wait until one of their products is evolved enough or investigate other carriers.
By the way, what a company wants you to promote isn't necessarily a product for which its in the best market! You're much better off marketing toward what they've written predominantly as new business in the last year.
Most desirable prospects are deluged with offers for insurance. Another letter or call wont differentiate the agency from all other insurance agents.
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A sales letter sent in bulk isn't a marketing program. If its even opened, it'll be seen for 15 seconds and then discarded. If You're not the incumbent or if the client isn't familiar with you, they'll never read your first letter.
Prospects will be more likely do business with agents with whom they're familiar and comfortable.
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Would you provide confidential financial information about yourself and your business to someone who solicits you out of the blue? Neither should anyone else! Familiarity breeds sales, not contempt!
Most agents rarely pay attention to existing customers. The agency that spends time building a relationship with prospects will be more likely to assume control of them in the future. Take this as a warning when you allocate your time between your clients and your prospects.
In order to properly penetrate a target market, an agency should create and implement a long-term frequent contact marketing program. With a large enough group of prospects, the expected long-term yield in sales will pay for the cost of the program.
Agency Consulting Group, Inc. has created a 15-step, three-year marketing process to evolve these benefits:
- Image development Prospects will be contacted by the agency many more times than they will by their current agent.
- Product comfort Since the agency will pursue a target market on behalf of only one carrier, they'll be able to completely familiarize the clients with the products offered, as well as the personal services of the agency.
- Risk development The 15-step program will include a number of notifications to the clients of common risks to businesses and how to avoid those risks through effective insurance management.
- Personal familiarization At least twice each year, every prospect will be contacted by phone or in person by the same agency representative in order to develop a personal relationship.
OUR COMMITMENT TO OUR CARRIERS
The agency will pursue the universe of prospects in a target market, fully penetrating that market on behalf of the selected carrier exclusively over a three-year period. If the prospect qualifies for the carriers underwriting guidelines, well only use that carriers product in our offering. We win or lose with the carrier. Well advise the carrier monthly on how many prospects received contacts (and what type), how many appointments, quotes or proposals, and sales.
OUR CARRIERS COMMITMENT TO THE AGENCY
This program provides a dedicated, disciplined approach to penetrating a marketplace. We require confidentiality of process to avoid competitors implementing similar programs in our marketing areas. We count on our carriers to avoid the 'hot and cold' approach to risk selection. We've asked for the types of business that have become the best types of accounts for the carrier. This means those accounts that favor the carrier with low loss ratios and for which the carrier has sufficient pricing authority to match the competition write the account. Our carriers have committed to writing at least 70% of the accounts offered to them (that meet their underwriting requirements).
THE AGENCY/CARRIER PARTNERSHIP
The purpose of this program is to establish growing partnerships between the agency and its best carriers. Stability, profit, and growth are the most important traits of both partners. The carrier expects the agency to grow through writing and retaining lines of business that are proven profit-makers for the carrier. The agency seeks carriers who can perform competitively on behalf of its clients on both product and price.
CAMPAIGN
Year One
Step One: Letter one Introductory letter by the agency principal and an agency Commercial Lines brochure.
Step Two: Initial telephone call within two days of receipt of the introductory letter offering an Insurance Program Analysis.
Step Three: Letter two Identifying the agency as an insurance specialist in the selected target market and offering references from current client base.
Step Four: Letter three Identifying the carrier and the product that wed like to offer the prospect (carrier brochure).
Step Five: Telephone contact by producer to establish personal contact (within three days of receipt of Letter three).
Year Two
Step Six: Letter four Identifying risks to the target market and ways to avoid them through appropriate insurance management.
Step Seven: Letter five Identifying additional risk exposures to the market, tying carrier product to an insurance solution.
Step Eight: Telephone contact to continue the relationship and offer an appointment.
Step Nine: The agency (target market oriented) Newsletter specific product.
Step Ten: Producer to establish appointment or drop-in visit goal to establish expiration date and/or quote coverage.
Year Three
Step Eleven: Letter six Second offer of no-obligation Insurance Program Analysis. Supply reference list.
Step Twelve: Producer to verify expiration date and set appointment 120 days prior.
Step Thirteen: Letter seven Specific risk identifier.
Step Fourteen: Final call to attempt quote contact.
Step Fifteen: Letter eight final letter from the agency principal offering agency's services.
PROCESS
The program is conducted on a set schedule, but not at regular intervals. For instance, one contact could be two weeks after a prior contact, but the next contact might be in 10 weeks. We've found in our test markets that off-schedule, seemingly (but not really) random contacts accelerate the process of familiarization. After the first four contacts, the prospect might think that you've been speaking to them for years.
The program is also never mass-mailed or bulk-mailed. Use stamps. Depending on who will conduct the next contact and when, five to 10 prospects should be mailed (or contacted) on any day. The follow-ups on those contacts will take whatever time the producer has to manage the process.
I rarely make absolute statements, but here's one: This program will only work if the entire marketing program is drafted at the same time. This means that all letters, newsletters, bulletins, and mailers need to be completed before the first prospect is mailed. In the years in which we developed and tested this marketing program it has NEVER worked if the marketing program was written as the schedule required.
The cost of a 15-Step Three Year Marketing Program in both dollars and producer time is considerable. The prospect type must be substantial enough that the projected number of eventual sales can justify the cost of the program. For instance, if your goal is to write 10% of the prospect base within three years, if the average commission is $1,000 and 40% of it will go to the producer, and if the entire marketing program will cost you $10,000, then you must sell 17 accounts (at the agency's remaining $600 commission/account) to break even in cash flow. That requires a 170-prospect minimum to achieve the Marketing Plans goal. Budget at least $1/item for mailing, and sales calls based on the time expected to be used by the producer.