How Good Is Your Competition?

Agencies can benefit from comparing themselves to their closest competitors:

other independent agents, direct writers, even banks. The existence of competing organizations and their level of competence will affect the share of the marketplace available to you and the security of your current book of business.

It may take some time to put this information together in a meaningful way, but a thorough competitive position analysis is worth the effort. The more information you gather, the better prepared you will be to compete for market share.

You'll want to record the following information about your own agency and about targeted competitors,:

• How many years has the organization been in business?
• Is the organization growing, declining, or holding its own?
• What is the organization's financial condition?
• Does the organization have markets for all its accounts?
• Does the organization offer a full line of financial products and services?
• What is the organization's reputation regarding account retention?
• What percentage of the organization's business comes from referrals?
• Does the organization have a formal sales-management program?
• What is the organization's reputation regarding its staff's professionalism?
• What is the quality of the organization's policy service?
• What is the quality of the organization's claims service?
• Are the organization's internal operations fully automated?
• What percentage of the organization's book is downloaded?
• Is the organization uploading? With how many companies?
• Does the organization have written procedures for its internal operations?
• What is the condition of the organization's physical plant?
• To what extent is the organization and/or its staff involved in community affairs? In industry affairs?

Doing an objective analysis of your own agency can give you a fresh look at your operation. It may show you strengths, capabilities, and potential weaknesses you have overlooked in the past.

Evaluating your competitors' operations is harder. To gather the information, you will need to use a variety of approaches, among them:

• observation
• conversations at meetings of local business associations, such as producer associations, Chambers of Commerce, Jaycees, and Rotary Clubs
• examination of competitors' advertising to find out what they consider their strengths
• conversations with people doing business with your competitors

Areas in which you are as good as or better than the competition are your strengths. Build on these strengths when you plan.

Areas in which the competition is better than you are opportunities for your agency to grow and improve. Make these your target areas when you set new operational objectives with your staff.