The previous article (Creating A Successful Plan For Marketing Commercial Lines Part I), presented information about the matrix of the agency book of business, the review of the book of for account development, and a review of company programs and products. In this second of a three-part series, Jack Fries focuses on selecting a proper market.
The most successful agencies concentrate in areas in which they have expertise, a large number of prospects, and companies willing to write these types of accounts. Once you’ve selected the niche that you wish to pursue, you can begin to strategize your marketing plan.
DIRECT MAIL
If you plan to use direct mail as your marketing strategy, be prepared to create a marketing letter or flyer that will generate immediate interest on the part of the prospect. I’d suggest hiring a person or company that specializes in direct mail pieces to create your letter or flyer. You should also be prepared to mail to the same prospects every six to eight weeks. Direct mail is most effective when received by the prospect when they’re ready to buy. One of the only time- sensitive products insurance agents sell is an IRA. This type of mailing should be done repeatedly beginning 90 days prior to the need.
TELEMARKETING
If you decide to use telemarketing to solicit new prospects, you must also decide whether you’re going to do this in-house or outsource it. If you do in-house telemarketing you’ll need to staff, train, and manage that department. Very few small and midsize agencies have the capabilities of performing these tasks properly. If you outsource your telemarketing, it’s important to select a reputable company that’s familiar with insurance telemarketing. They should have the capability of not only contacting the prospect for x-dates, but also of providing you with a list of the prospects to be called, asking pre-qualifying questions, sending follow-up letters to qualified prospects and, if requested, setting appointments for producers. Although there are many telemarketers available, I can recommend one that I know to be competent and can fulfill these requirements: National Marketing Services. You can reach them at (800) 736-9741. You should ask to speak to Larry or Jeff Nielsen. Telemarketing isn’t cheap and you should embark on this venture only if you’re prepared to sustain this approach for at least two years.
REFERRAL MARKETING
One study found that 86% of surveyed customers would refer their broker to their friends, yet only 12% had ever been asked. Another study found that a referral is up to 15 times more likely to do business with you than a cold prospect.
There are a variety of ways to use referral marketing and selling:
- Get a name from someone else and then contact them;
- Have someone else contact a prospect and let them know you will call; or
- Have someone else refer prospects to you every time they encounter a person who could use what you sell.
The ideal is to have someone else contact a prospect and sell for you. Also referred to as “word of mouth” marketing and selling, this is usually the least expensive and most productive form of lead and new business acquisition you can get.
ASK THE RIGHT PEOPLE, AT THE RIGHT TIME
Common sense, and experience, tells me that the right person is someone who just bought from you, or complimented you on your products or services. They’re thinking about how good you are, and how they gained from what you provide. Be on the lookout for, and seize the opportunities you might encounter every day.
ASK IN THE RIGHT WAY
Far too many producers say, “Do you know anyone else I could contact?” Instead, tie your request into the problem that you just solved, the pain you eased, or the result you helped them achieve.
For example, “Pat, I’m glad you were able expand your coverage and reduce your loss exposure by selecting me as your agent. By the way, who else do you know, who’s experiencing a similar problem and might also benefit from a program like the one I’ve put together for you?” Now you’ve put them in the position of helping a friend, instead of sending a salesperson after them.
USE REVERSE REFERRALS
You often have highly coveted prospects that you’d love to soften up before contacting. Comb your customer base and ask them if they know the prospects, and if so, if they could help you. For example, “By the way, I’ve identified several members of your association as people we could probably help in much the same way that we helped you. Would you happen to know Joe Jones at Jones Electric, or Mark Short at ABC Electronics?”
ASK WHY THEY’RE A GOOD PROSPECT
After your source has given you the referral, ask them to tell you about them. They’ll give you great info, and sell you on why the prospect should buy from you.
MAKE IT EASY FOR PEOPLE TO SEND YOU REFERRALS
Send stacks of your cards to your sources. Ask them to put you in their contact management program.
ASK OTHERS TO SELL FOR YOU
Any time that someone volunteers, “I know of someone who could really use you,” don’t just get the prospect’s name and number. Ask the source to contact them for you. After all, if they felt strongly enough about what you do to think of the prospect, why not ask them to take it a step further?
Formalize this process. Brainstorm a list of the 25 people in your life who are in a position to make the greatest impact on your business or sales. Never be out of contact with these advocates more than 30 days at a time. Call, e-mail, mail, fax, send articles, newsletters, anything of value to keep your name in front of them, and to keep them referring you to others.
BE CREATIVE: THINK BIG
If the 80/20 rule applies (and it usually does), 80% of your business comes from 20% of your customers. Since it makes sense that you want to get more customers just like your most profitable ones, target them for referrals.
Ask your best customer if they would mind drafting a testimonial letter singing your praises, mentioning how your agency helped them, and highly recommending that they contact you for their insurance needs. Offer to write the letter to make it easier for them. Does this work? Like a charm, every day, for those with the desire and drive to try.
THANK YOUR SOURCE
As the saying goes, what gets rewarded, gets repeated. You don’t want your referral source to dry up. You want them sending you business every time a situation arises that would be good for you, and for the person of whom they are thinking. So, reward your source for a referral. It can be as inexpensive as a thank-you note, or a material gift such as a Lotto ticket.