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THE 10 MOST COMMON INSURANCE AGENCY MARKETING MISTAKES: I
by John Graham
 In this first of a two-part series, John Graham identifies 10 of the most common insurance agency marketing mistakes, together with reality checks for turning them into strengths.
Ten years ago would anyone have said that the insurance agency business would be changing faster than other industries? It seemed to be lagging far behind, with seemingly little appetite for change.
That was then. Today, the paperless insurance office is here and insurance products are flowing through more channels. Bank sales are rising, Internet-based sales are increasing, and more companies are going direct.
And who can ignore the thousands of mergers and acquisitions involving agencies of all sizes?
The picture is not quite complete, however. Throughout its history, the independent agency has been both a marketing powerhouse and a marketing failure. During the past half-century in particular, the Independent Agency System has been one of the great entrepreneurial success stories in American business.
Whether in small towns or metropolitan areas, many older agency principals are quick to say that they've been successful beyond their fondest hopes. They benefited from the rising tide of population growth and an expanding economy.
Country club and Chamber of Commerce memberships were often the keys to success. Getting new accounts was often more fortuitous than planned, more personal than strategic.
Although personal relationships are essential, no agency principal or producer today can touch the right people at the right time by themselves. That's the major marketing problem, because many agencies are trying to apply techniques from the past for meeting today's challenges. Sales managers continue to tell producers to make five to 10 calls a day, join certain clubs and organizations, and drop in when they see a new business.
The extent of the problem is reflected in the fact that a substantial industry has grown up over the years that offers hope to insurance agencies. There are any number of so-called “solutions”: everything from sales letters, telemarketing tips, and sending out postal cards to buying leads. There's always something that claims to be a lifeline.
Whether agency expectations are too high, or more likely, the implementation is inadequate, these “solutions” are replaced by the next “answer.”
Whatever the reason, insurance agencies and organizations often attempt to achieve marketing results without following the principles of marketing. For most agencies today, a solid marketing posture, plan, and program are essential for retaining current accounts and attracting desired new business.
Here are five of the most common insurance agency marketing mistakes, together with reality checks for turning them into strengths:
Mistake #1. Failure to have a marketing strategy. This one tops the list. Few agencies consciously think about what they want to accomplish (other than to say, “We want more business.”). Strategy emerges from a careful analysis of an agency's strengths, capabilities, markets, and account base. It has to do with what the agency needs to accomplish and how it's going to go about doing it.
Reality check: If you don't know where you're going with your marketing, you'll never reach your destination.
Mistake #2. Failure to have a plan. Insurance agencies are hotbeds of “planless marketing.” They decide to “do things.” Everyone gets pumped up about a particular promotion and three weeks later it's history. Or just as likely, someone decides to send out a mailer or an e-mail blast that has no purpose, objective, or action step. Almost without exception, these attempts have the wrong focus: It's always what the agency wants the customer to do –– not what the agency can do for the customer.
There's no plan or planning — no thinking through the overall marketing picture. There's no time spent on how to integrate the parts, or structure for implementing it over time. Without this planning process, there's no plan.
Reality check: Failing to plan marketing means planning to fail.
Mistake #3. Failure to take marketing seriously. For far too many agency owners and executives, marketing is a necessary annoyance that's unrelated to sales. More than almost anything else, this view inhibits good agencies from becoming great.
Reality: Marketing is 100% about sales. It has to do with creating a climate in which customers decide to want to do business with you. Any agency that sees quoting as its major activity doesn't understand marketing. It has fallen into the trap of only selling insurance policies. The only value it offers is price — and those who live by the pricing sword will die the same way.
Mistake #4. Failure to recognize gimmicks. It's no exaggeration that insurance agencies will try almost anything when it comes to marketing. The new producer or manager always has a sure-fire idea that worked great somewhere else. It always starts with these words: “What we need to do is … ” Just fill in the rest of the sentence.
Reality check: There are no simple solutions and no quick fixes. There aren't any for General Motors or Coca-Cola and there aren't any for insurance agencies. Advice: If a marketing idea sounds easy and promises great results, avoid it.
Mistake #5. Failure to stay on track. It someone attempted to plot an insurance agency's marketing activities, the graph would show an endless series of starts and stops. Granted, much of what passes for marketing is so useless, purposeless, and disappointing that it runs out of steam quickly.
At the same time, the discipline required to stay on track tends to be missing. A carrier comes out with a new program and someone wants to chase it for a couple of months. What makes anyone think that a couple of months is enough time for anything worthwhile to happen? Then, it's off in another direction –– all in the hope of finding the proverbial pot of gold.
Reality check: Once you've set a marketing plan, stick with it (until it's proven not to work).
The next article will review five more agency marketing mistakes and the reality checks to overcome them.
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