The preceding article examined five common agency marketing mistakes, together with remedies for these errors. This second in a two-part series by John Graham provides a list of five more mistakes and the reality checks that can overcome them.
Mistake #6. Failure to base decisions on fact. Marketing isn't about what you want to sell; it's about what someone wants to buy.
This requires solid information. It takes a thoughtful agency principal to insist on doing research before developing a marketing plan, even though this is standard practice in most industries.
Agency owners and executives are basically salespeople. As such, they're essentially "hunters." They like to think of themselves as having "a nose for new business." As far as they're concerned, research is counter-intuitive. As a result, they fall into the deadly trap of basing decisions on personal preference ("I never listen to that radio station") or, ironically, they directly or indirectly do what their competitors are doing (and, of course, the competitor picked it up from another agency!).
Reality check: Successful marketing relies on market research.
Mistake #7. Failure to prospect effectively. Although every producer prospects, how effective are their efforts?
Prospecting is an agency's responsibility. Since it involves the future of the organization, it should be the agency's top priority. Effective prospecting requires a plan that can be expressed simply: Who's going to do what to whom and when? That's the entire prospecting process.
Although it's certainly possible for a telemarketer to find a few "ripe fruits" over a period of time, what about the closing rate?
Reality: Prospect cultivation depends on your agency's goals, objectives, and the book of business that you seek to build over time. It recognizes that today's sophisticated insurance buyers don't jump quickly. They want to see performance over time. Because they also want to know who they're going to be doing business with, the cultivation process allows them to get acquainted with you — and that takes time.
Mistake #8. Failure to develop niche markets. We all want to do business with specialists. Just as managing the prospecting process is essential for success, so is managing a series of niche markets. For a small agency, this could be three or four markets, and perhaps twice that many for a larger agency. Of course, there are vertical opportunities: printers, auto dealers, machine shops, plastic manufacturers, fitness centers, hospitality and professional services, etc. The list is nearly endless.
You can also pursue horizontal niches. Workers' Compensation is a primary example. Learning how to review audits and finding mistakes offers a golden opportunity to show your agency's value. You can also market Health policies, Employment Practices Liability, and so on.
Reality check: Positioning your agency with specific expertise helps set you apart from the competition.
Mistake #9. Failure to view insurance as a knowledge business. Insurance is a highly technical industry, partly because it's so carefully regulated. Insurance designations hold value because they represent professional competence.
With the complexity of so many coverages, producers and account service personnel with 10 or 20 years of experience can be enormously valuable to customers. Unfortunately, many customers - including experienced insurance buyers - never get the opportunity to appreciate this knowledge and expertise because it remains well hidden or camouflaged behind a "sales approach."
Reality check: Marketing recognizes that the way through the door is through the customer's head. If the customer comes to realize that the agency and its personnel provide a resource of worthwhile information, they will open that door.
Mistake #10. Failure to brand. All these marketing mistakes add up to a failure to brand. Even though the concept has been discussed widely for a long time, it still remains elusive. The best definition comes from marketer Al Ries: "A brand program should be designed to differentiate your cow from all the other cows on the range — even if all the cattle on the range look alike."
That's what marketing overcomes: Looking like everyone else, even when all insurance agencies look about the same.
The place to find this uniqueness is not inside your agency. It has nothing to do with years in business or even outstanding personnel. It has to do with understanding what your customers value; just like Gillette, Schick, Wal-Mart, Hyundai, Scion, and Amazon.
Reality check: In a nutshell, branding is what makes the customer say, "These people understand me."
There's a kernel of truth - of good marketing - in each of the 10 marketing mistakes. Your task is to peel away the layers and to grow the seed.
Marketing isn't what you do when times are bad and you need business. Marketing is what scrutinizes every aspect of your agency and calls upon it to measure its performance against what customers expect.