Check out these solutions to soft-market woes.
Shifts in the marketplace are either heralded by agents and brokers with general elation (that would be a hard market) or with disappointment or even dismay (obviously, a soft one).
So what does all this have to do with successfully marketing your agency — hard market or soft?
Each cycle presents unique challenges and more importantly, requires re-strategizing and rewriting your agency’s approach to sustaining and growing business. Over the years, I have observed that hard or soft market cycles often trigger reactions (based on legitimate daily concerns and pressures) that keep agencies from fully capitalizing on marketing opportunities to reinforce relationships with customers and business partners or to focus on new opportunities to fuel success. These same pressures can also lead to vulnerability to competitors.
MARKETING PROBLEMS IN A SOFT MARKET
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The Hard Market Scramble: The sheer effort required to find and place coverage for clients often puts agents and brokers behind the eight-ball. They spend lots of time talking to underwriters, and not enough talking to — or communicating with — clients.
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Tunnel Vision: Buried in account placement headaches, it’s easy to get lost in the immediate problem and not take time to move forward on what best delivers long-term potential: Identifying additional client needs, prospecting for new clients, and building strategic books of business.
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Fat Cat Syndrome: With revenue inflated by higher premiums and business pouring in, it’s easy to adopt the attitude: Who needs more business? Who needs to advertise? Unfortunately, our clients have short memories. They can easily forget what else you can do for them, and can easily be attracted to and wooed by someone else who’s making the effort to make contact.
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Selling Only on Lowest Price: In a hard market, it’s great to come in as the hero who delivers the lowest price to a client, but it’s also just as easy to be seen as a commodity. In such a case, it’s easy to forget to sell all the long-term attributes of your agency: Your people, expertise, market connections, superior service and response, etc.
MARKETING GUIDELINES FOR A SOFT MARKET
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Change Gears Quickly: Take the time to identify the impact of a more competitive marketplace in order to determine what you need to do to make up for pricing shortfalls. How do you best grow business with existing clients? What new clients do you go after? What products or lines of business offer the best potential for revenue and profit? How will your competitors react and where are you vulnerable?
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Avoid the Empty Pockets Syndrome: When revenue falls, it’s all too easy to succumb to restricting marketing dollars. No one can — or should — spend money foolishly or throw it at the wrong targets. However, you will benefit by investing strategically to promote your products and services that serve your clients and set you apart.
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Sell More than Price: As in a hard market, train your staff (and your clients) on why people should do business with you, rather than the agent down the street who can get the coverage for $100 less.
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Reach Out and Reconnect: In today’s competitive business climate, successful agencies grow by making their organizations top-of-mind with customers, business partners, and the industry. They effectively introduce new products and services, find new clients and market niches, and establish long-term brand value in eyes of all their stakeholders.
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Get a New Bag of Tricks: What additional products or services can you offer clients? Coverage or products they’ve put off buying because their basic coverages were so high for the past couple of years? A new specialty program? Risk management or claims control services? Alternative risk or captive options? An aggressive marketing or client communications program can enhance your chances of capturing their attention — and their business.
ACHIEVING THESE GOALS
Your first focus should be effective customer development and prospecting, including lead generation programs and savvy customer segmentation to fine-tune your prospecting efforts. Ongoing communications and visibility in the form of stepped-up sales contact and client visits, advertising, direct mail, enhanced Web sites, e-communications, and up-to-date and targeted “leave behinds” are proven tactics to attract your clients’ attention. You also need to:
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Expand your product mix to help retain clients and attract new ones —including whole books of business. This can include the development and promotion of niche programs done in conjunction with intermediaries or direct with markets.
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Partner for success with other entities to expand your capabilities, services, and prestige. These partners might include wholesale and MGA intermediaries, reinsurance brokers, captive management specialists, claims administrators, etc. Remember to include those resources in your marketing activities so that when you approach them, you’re top-of-mind with them as well.
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Identify and exploit your brand to promote unique attributes and your differentiation from competitors. This is essential in a competitive marketplace. You can do this directly through advertising and direct mail, but often more subtly through press and publicity, speaking opportunities, and cultivating industry analysts. If you specialize in a particular industry niche, look into attending related trade shows to demonstrate your commitment and expertise.
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Focus on your production and support personnel. This is critical to any marketing effort. Branding and promotion are only believable when they come to life in the performance and behaviors of your staff. Use effective employee communications to build and sustain your desired company culture, communicate goals and objectives, and to recognize high achievers.
SUMMARY
Market cycles are inevitable in our business. But with planning and forethought, you can “cycle up” your marketing efforts to your long-term advantage.