'Some agents wouldn't dig for gold even if you guaranteed them a strike!'
Does any insurance agent truly believe that there is LESS Personal or Commercial lines being purchased today than in the past? Why then are agencies shrinking, selling out, or merging to survive? Why do agents cry about competition, but do not DO anything about aggressively marketing the products they know so well in the areas in which they are a known commodity?
Have you ever heard the story about the famous Forty-Eighters?
All of us have heard of the riches created by the '49ers (the gold rush crowd, not the football team), but did you realize that a small group of miners had the opportunity to penetrate the mother lode a full year earlier, in 1848?
Noting the presence of nuggets that looked like gold in the streams near Sutter's Mill in January 1848, this group of entrepreneurs decided that mining the area probably wasn't worth the trouble because:
- Think of all the trouble and cost they would incur to try to penetrate the area's potential - what if it didn't pan out?
- If it were real gold, wouldn't there already be a thriving mining industry?
- How do we know its real gold, not just 'fool's gold'?
So the true gold strike waited another year for another group who saw the potential, not the cost - who were willing to be the trailblazers - who analyzed the nuggets and found them to truly be GOLD.
This article addresses the premise that intelligence and marketing as tools for building an insurance business are truly symbiotic - that neither can be effective without the other, and that the lack of either by an agency also points out a shortage in the other category as well.
Far too many agents act like the '48ers, rather than the '49ers when it comes to penetrating new markets. These agents may have been historically successful on their own or through generations of prior insurance agents. But the world is changing, and the marketing and sales of insurance must change with it, or many of today's agents will look back and wonder why their successors have been successful in the NEW insurance marketplace while their businesses decline and fail.
INTELLIGENCE
It's not only what you have that counts - it's what you can gather!
When you were the only game in town, the demographics of the clients, prospects, and geographic area were unimportant. People and businesses sought you out because a) of your great sales and service personality, b) your clients referred them to you, c) because of your vast insurance knowledge, or d) because you were the only relatively intelligent insurance agent within miles.
Well, we have bad news for you. Most of the idiots are gone. The rest will be gone soon. The agents that remain are generally qualified, caring, and professional. You may have a head start because of your longevity, but that lead is being eroded by the aggressive marketing of your competitors and the Internet agents, financial institutions, and the insurance companies who have opened direct writing facilities themselves are all focusing on niches who will use the services that they provide. They got these niches by gathering intelligence and focusing marketing.
Sitting back waiting for referrals these days is much like sitting in front of your office with your mouth open waiting for a corned beef sandwich. When something does, in fact, come your way, it may not be nearly as tasty as you would like. Most unsolicited referrals come with 'hair' and some nasty side effects attached to them.
Have you never wondered why you do not get 'clean' accounts to market anymore?
Those agents who have seen their agencies bleed from the attrition of formerly loyal customers without the historical flow of new customers to take their place have tried various marketing programs to re-invigorate their agencies. Most of these marketing programs have been halfhearted and scattered. Moreover, there has been a very strange tendency to continue mediocre marketing and to actually STOP successful programs. I know that is bizarre, but we encounter agency after agency whose owner scratches his or her head and says, 'You know, that program seemed to work. I wonder why we aren't still pursuing it?' Many have actually generated leads and abandoned them!!
Much of the marketing mistakes agents have made are similar to our '48ers, above. They checked out a market niche or geographic area, found it promising, and promptly abandoned it.
The first mistake is to rush into marketing and advertising programs without sufficient INTELLIGENCE GATHERING. Demographics are as important to an insurance agent as are coverage and price. Without those demographics you may be tempted to advertise for that desirable program for your favorite carrier without knowing that there isn't a qualified prospect (not already insured by that company) for 100 miles. Some companies will provide demographics for a particular industry type if they desire those lines of insurance. The smart agents perform their own demographics to identify a number of important factors in their home territories:
- For Personal Lines and individual financial products-What kind of people live there? What's the income spread? How many homeowners? What's the value spread of the homes where you market? Who are the prevalent insurers (no, you only know with whom you can (or canot) compete, not necessarily who are the prevalent markets)?
- For Commercial Lines - What is the distribution of businesses types and sizes in your area? Service vs. manufacturing? Who are the prevalent insurers?
- For your own business - What is the distribution of customers by category within Personal Lines and Commercial Lines? Personal Lines by value of homes - Commercial Lines by business type.
- For your carriers - how does your business volume compare to theirs within your territory? Do you write with or against their 'flow' business (their favorites)?
Where do you gather this intelligence? The intelligence about your own company is imbedded within your system and/or within your files. Any amount of work is worthwhile if you can understand your own business better. Much of the intelligence about the demographics of your marketing area is achievable either through the Internet or by using marketing research firms in your area. Remember the ''48ers' example when you are faced with the cost of marketing research to achieve the information that will permit you to focus your marketing and sales efforts.
MARKETING
Once you have the intelligence on your desired area, you are prepared to use it within your marketing programs.
Diamond's Rules of Marketing
Rule 1 - Market the products that your prospects need.
Rule 2 - Focus on the types of prospects that need products in your area.
Rule 3 - Sell the products for which your companies are excellent markets.
(Rule 1) - Your intelligence gathering is designed to identify target prospect groups in your marketplace. Use the knowledge gathered to sell to the people or businesses who are your likeliest client base.
(Rule 2) - Try to avoid targeting those prospect groups who are already the targets of everyone else. Look for undersold markets. All areas have them. Innovate to provide coverage through innovative carriers.
(Rule 3) - You already have relationships with a number of carriers. Each of them has favored specialties (although most of them seem to be oblivious to their own strengths). Identify their strengths by looking at the business that they have written in the last year. The business categories they have written most are the ones they write best.
Diamond's Stupid Corollaries (that we encounter over and over again)
Corollary 1 - It doesn't matter how well your carrier can insure commercial fishing boats if you are in Iowa.
Corollary 2 - If you are in farm territory, sell to farms. If you have no farm companies, either find a new prospect base or find a new company - you have critical incompatibilities.
Corollary 3 - If every contractor in your area is already insured through great programs - don't bother to market to contractors - unless you actually like the pain.
Yes, you must learn to market professionally if you are going to survive in the 21st century. But marketing is not sending a sales letter to a group of prospects and hoping for them to call you. Gather intelligence about your agency, your carriers, and about your marketing area before you create or implement your marketing programs. Your marketing programs will work best if they are interactive with the demographic data that you have collected. And, finally, test your marketing programs for effectiveness. Don't give up if they do not work initially - change the program and try again, but learn to cut the cord if the program does not work and, if it does work, don't stop it.