Search CompleteMarkets

...0;stuff happens.” As long as humans work in business (or for you “techies” — as long as humans write the programs for the Web sites...tment of products, commodities, and services into a positive buying experience...

...an team include free consulting on human resources, regulatory compliance, dis... take advantage of such other added services as personal credit reports, Dun &...

...o change it, or they feel that the human or financial cost of changing won't j...

Developing Broker Services Agreements
DEVELOPING BROKER SERVICES AGREEMENTS by Gary Griffin This ...agreement is to identify the needed services and to make a commitment to provi...

...ogram has been adapted to claims services. CLC succeeds in measuring claims se...ey will buy additional products and services. They will spread positi...

Establish An Organizational Structure
ESTABLISH AN ORGANIZATIONAL STRUCTURE by Gary Holgate When analyzing the organizational structure of an independent insurance agency, you will find that there are four different general functions performed: 1) Sales 2) Service 3) Paperwork 4) Management Before going into a detailed definition of each, let's discuss the types of contact that an agency has with existing and prospective customers. TYPE OF CUSTOMER CONTACT When I first began analyzing agencies in the late 1960s, I quickly learned that an agency has two basic types of contact with existing and prospective customers: Demand Contact Public-Relations Contact 'Demand contact' with a customer occurs when an existing customer contacts the agency and, 'upon demand', requires the agency to perform some type of service. Examples could be a policy change for a new vehicle, a change of address, a claim, a billing question, or a coverage question, to name a few. The important aspect to remember about a demand contact is that the agency does not control when the request will be made, or what the resulting workload will be during the next hour, day, week, month, or year. When the customer requests service, the agency must deliver it in a timely, courteous, and accurate manner. A 'public-relations contact' takes place when the agency generates a contact with an existing or prospective customer. Examples of public-relations contact include a sales representative calling a new prospect or visiting an exceptional Commercial customer. The important fact to remember about a public-relations contact is that the agency, not the prospect, generates the contact with the customer. SALES AND SERVICE DEFINED Once these contacts have been identified, demand contacts should be called 'service', and public-relations contacts could be defined as 'sales.' I often ask, 'How many sales representatives have had a lot of time for public relations contacts in the past year?' The number of people responding is normally very low-fewer then 10%. What sales representatives are saying is that if they don't have time for public-relations contacts, they don't have time for sales. WHY SO LITTLE TIME FOR SALES? After personally analyzing more than 450 independent insurance agencies, I could probably write a book about the reasons why sales representatives don't have time for sales. However, there is one predominant reason for this dilemma: The typical sales representative (owner or non-owner) attempts to perform public-relations contacts and demand contacts at the same time. In other words, the sales representative is attempting to sell and service customers simultaneously. If your job involves demand contacts, this may occur: You are driving to work and determine that you have three tasks you want to accomplish that day. The time to complete them should take no more than half an hour. Let's say these tasks include calling a customer for a renewal appointment, contacting an underwriter to follow-up on a large risk that is being placed, and making an air-line reservation to attend a seminar. You arrive at work at 8:30 a.m., get a cup of coffee, sit down at your desk, and find the number of the customer with whom you want to make the renewal appointment. The telephone rings and another customer asks a coverage question (demand contact). You answer the customer's question, begin to call for the renewal appointment, and the telephone rings again. It is another customer with a billing question (demand contact). This goes on all day long, until it's 5 p.m. The agency is closed to the public. You are tired because you worked hard all day and desk before going home, and then think of the three objectives that you set for yourself that morning. Were they accomplished? Nine out of 10 times the answer is 'No.' Why does this happen day after day after day? The answer is very simple: When an employee attempts to perform service functions and sales functions at the same time, the service functions cause the employee to lose control of business life, simply due to the nature of the service function. This is why it is best to establish an organizational structure for an agency; separate sales and service functions, and ensure that an employee is not assigned to perform both, if at all possible. If these two functions are mixed into one employee's job description, service time will always consume sales time, and the sales objectives of the agency will suffer. WHAT ABOUT MANAGEMENT? One of the major deficiencies of the average independent insurance agency is the lack of time devoted to management. Another question I always ask when consulting or conducting seminars is, 'Does your agency have a full-time manager who does not sell or service, and spends 100% of the time managing?' Again, there is a very low positive response-usually fewer than 5% answer that they have such a full-time manager. If this is a fact, it means that more than 95% of the independent insurance agencies are combining management with sales, service, or both. The problem is clear: If you combine sales or service, or both, with management in one employee's job description, management will suffer. Sales and/or service duties will always consume any time available for management. Management is something that can always be put off until tomorrow. And when that happens, problems become crises, and the majority of management time is spent 'putting out fires.' PAPERWORK Paperwork is like management. It can always be put off until tomorrow. That's why, when paperwork and service are combined, service time will always consume paperwork time, and backlogs will occur. When combining paperwork and sales, one or the other will suffer. And finally, if you combine paperwork and management, management time will always suffer, as the paperwork will always consume management time. WHAT DOES THIS MEAN? When establishing an organizational structure for an agency, never combine these functions into one employee's job description: 1) Sales and Service 2) Sales and Paperwork 3) Sales and Management 4) Service and Paperwork 5) Service and Management 6) Paperwork and Management WORKING WITH INSURANCE COMPANIES There are three types of P/C customers. They are: 1) Exceptional Commercial Lines customers 2) Non-Exceptional Commercial Lines customers 3) Personal Lines customers If an insurance company wants to write the large, exceptional Commercial Lines customers, agency owners should be involved. My studies reveal that more than 95% of exceptional customers are written by the owners in the average agency. If the company wants to write non-exceptional Commercial Lines customers, it could work with either a sales representative, a small (non-exceptional) Commercial Lines manager, an operations manager, or a Commercial Lines customer service representative (CSR). If the insurance company wants to write Personal Lines business, it could work with a Personal Lines manager, an in-house Personal Lines salesperson, or a CSR, depending how the agency is organized. If someone other than the owner is involved in a project, that employee will enjoy working on the project since it's something new and different. Each situation varies, depending how each agency is organized. The important thing to remember is that owners are the busiest people in the agency and, whenever possible, should delegate to employees. THE POSITIONS IN AN AGENCY To help identify different positions in an agency and what each position generally entails, the following charts and description are provided. Remember, these are only general definitions and will have to be adjusted and modified with each agency. PERSONAL LINES The Personal Lines Manager, in addition to managing the Personal Lines department, often acts as a CSR, and may even serve as the agency Personal Lines Assistant. The Personal Lines Manager could also be the In-House Sales Representative, who handles new walk-in business, telephone quotes for new business, and follow-up expiration dates on additional coverage for existing accounts. The Customer Service Representative (CSR) usually handles the demand contacts for Personal Lines customers including claims. The Personal Lines Assistant usually processes the paperwork regarding policies received from insurance companies. COMMERCIAL LINES The Commercial Lines Manager could, in addition to managing the Commercial Lines Department, perform some or all of the duties listed in the other positions below. The Account Manager (a new position that I have recently created) works with Sales Representative on information gathering, as well as placing and servicing exceptional Commercial Lines customers. The Placer takes the information gathered by a Sales Representative and placed the business with insurance companies. The Placer mostly works with exceptional Commercial Lines customers. The CSRs handle demand contact from Commercial Lines customers. Through the years, I have attempted to have exceptional customers and non-exceptional customers and non-exceptional customers assigned to different CSRs. For example, the Non-Exceptional CSR handles only non-exceptional Commercial Lines customers. The Commercial Lines Assistant is an employee who performs the paperwork for both exceptional and non-exceptional customers. SALES DEPARTMENT The Sales Manager manages all sales activities of the outside sales staff. This person is usually an owner. The Commercial Sales Representative is an outside salesperson who is normally responsible for prospecting for new clients and handling all outside work with exceptional customers. The Life and Health Sales Representative sells Life and Health insurance to existing agency customers and other prospects. Many agencies use an insurance company representative in this position. The Sales Department Coordinator is a relatively new position in agencies. The coordinator's major functions include coordinating sales objectives, telemarketing for new clients, and narrating management reports. This person sometimes acts as the owner's secretary. OTHER AGENCY POSITIONS There are many other positions you may find in an agency, such as bookkeepers, word processing operators, receptionists . . . depending of course, on agency size. The point in organizing agency personnel along these lines is to free your staff of distractions to concentrate fully on particular clients. After all, the organizational flow is a key element in the success or failure of the agency.

...DOLLARS by Carol Hammes The services of independent agencies have become..., put the specific risk management services that you’ve agreed to provi...

How To Build Your Personal Lines Book - Part II
Continued from this article. Personal Lines competition continues to intensify, as more and more players enter the marketplace. However, independent agents can fight back — if they're willing to make some fundamental changes in the way they do business. In this two-part document, Peter van Aartrijk presents 17 ways to help you build your Personal Lines book. If implementing all of them seems impossible, try three or four. But make a commitment, and go for it. [Note: Because this article was originally published in 1993, names, positions, and employers might not be current; but the information is as pertinent today as it was at the time of publication.] 8. CROSS-SELL TO FILL IN THE GAPS If you're big in Commercial, why not launch an effort to market Personal Lines to your business clients? Ask every Auto customer about their Homeowners or Renters needs. Other possibilities: Floaters, Flood, Umbrellas, Marine, RVs — even Disability and Life. These are the warmest leads you have. The average family has five insurance policies, but the average agency writes only 1.3 policies per family, according to Bates. By launching a sustained effort to round out accounts, she feels that agents easily could add an average of a half-policy per account. “Most agents think they have done an excellent job cross-selling, but they haven't,” Timm says. “We thought we had, but we hadn't. The chance for growth in our client base was tremendous.” Today, his agency is 87% cross-sold. Check for key missing coverages. “A simple review of your Homeowners files, coupled with a telemarketing follow-up, could produce some nice [flood] premium,” says Dave Meehan, president of Bankers Insurance Group, a St. Petersburg, FL., agency specializing in flood risks. The agencies conducting the most consistent, aggressive sales programs are the least likely to get hit with E&O claims, Bates says. That's because they can't be faulted for at least offering consumers the coverage. 9. COACH YOUR CSRS TO SELL CSRs should be “coached and managed to do a better job of meeting the customer's needs,” Cunningham says. “They often don't understand that asking questions about the customer's insurance programs, recognizing opportunities, and making recommendations can be part of their jobs. They should role-play these activities and feel comfortable with them.” Adds Bates “CSRs often feel their job is to provide damn good service. They talk to their clients in such a nice way and don't even realize they could sell all this other insurance. Organize a plan and make CSRs realize they are really salespeople, even though this might be unpalatable to them,” she advises. Some CSRs, for example, can be judged successful if all they do is keep their book of business cross-sold. 10. TAKE ADVANTAGE OF CO-OP ADVERTISING To produce warm leads, companies are often willing to share the cost of direct mail and advertising. A close partnership with Safeco has allowed Timmco Agency to send out 100,000 direct-mail pieces in one year. George Johnson, vice president of Safeco's Property & Casualty marketing, says that a typical mailing goes to 10,000 addresses that an agent is targeting. The average response is 4%, of which 15% to 20% can be converted to sales. Some companies will also co-op programs to cross-sell existing customers. Fireman's Fund and Chubb run co-op sales and marketing programs for agents selling affluent Homeowner programs. “Fireman's Fund offers such help as brochures, sales invitations, telemarketing training, policyholder newsletters, stationery, in-house customized leads, and sample sales letters,” says sales and marketing executive Joe Galardy. 11. IF YOU CAN'T BEAT `EM, COPY `EM Many people around the industry say that it's time to stop fighting the direct writers and begin emulating their tactics. “If you look at State Farm and Allstate,” Wilson says, “you're required to get so many x-dates and make so many sales.” “You have to write Personal Lines like a direct writer,” Platt says. “You have to determine what markets you want to be in, and you need a system of marking x-dates. You need to be continually expanding your sphere of influence and grafting in new people,” he adds. “You have to make a commitment to solicit or you will be selected against if you just sit back and take it.” Progressive's COO says that independent agents should learn from the experiences of major agency companies that have left Personal Lines. “I'm interested in agents who say, ‘Let's find a new way to do this because what we did in the past isn't working so well.' That means developing a closer relationship with a single company, with the agency stressing sales, and the company policy and claims service,” he says. 12. USE COMPENSATION TO MOTIVATE Tie CSRs annual increase and/or bonus to sales and service goals, use of automation, retention of the business, educational accomplishments, and teamwork. Says Cunningham, “Agencies are experimenting with new compensation arrangements in an effort to keep their costs in line while also rewarding their best people.” And have some fun. Anyone working at the Eidson agency gets five bucks for bringing in an x-date that goes to a quote — even if it isn't written. Eidson calls this a “bird dog” bonus. The result: Eidson employees are likely to ask for x-dates outside the workplace. And 80% of new business comes from referrals. 13. GIVE YOUR CUSTOMERS THE SERVICE THAT THEY WANT “Many agents assume they they're providing good service when they're not,” Cunningham says. “Most agencies don't conduct annual reviews. They don't offer Life insurance or do follow up on claims. The customer might accept that the agency is closed at lunch, but might not like it. Written communication might not be clear and friendly.” Would your clients like you to stay open later at night, or on Saturdays? Why not send a short survey and find out? Kwicien, a former sales manager for a direct writer, says, “The battlefield in this decade will be who can provide the best service to the customer when it's convenient for the customer, not to the agent or company.” 14. KEEP AN EYE ON CUSTOMER SERVICE CENTERS Several major companies have opened centers to offer such service support as claims handling, while their agents focus on sales. You usually give a couple points of commission back to the company in exchange for a lower price and/or reduced effort on your part. Opinion among agents ranges from enthusiasm to hostility. Timm is writing more than $2 million in Personal Lines through three other agents and one CSR. Although his agency used to have a 50/50 business split, he's now at 80% Personal, with 4,000 customers around Oregon. Servicing is “a pleasurable but not productive job,” Timm says. Safeco's service center employees in Portland do a better job, he claims, because they're always available via a toll-free number, something he can't offer. “Our clients can call from Hawaii or California when they're on vacation with questions on rental cars. “I hate to admit it, but frankly the service center is better in most cases,” he adds. “You think you're such a darn good service provider, but the fact is that I sat and listened to these service center folks, and they are friendlier and give more consistent service.” “The customer service center is the most serious threat to the Independent Agency System,” counters Eidson, who says that insurers have opened the centers because the agency/company interface hasn't moved fast enough. “We aren't in manufacturing; we don't make widgets. We're in the service business. We might be poor salesmen, but by and large the Independent Agency System does a super job on service. Otherwise we'll have to be like car salesmen: Sell, sell, sell, because the only real commission will be on new sales,” he adds. But Eidson acknowledges that a producer who makes a lot of mistakes in servicing might have no option but to go into a service center. 15. CONSIDER A CLUSTER Forming partnerships with other agencies means that you can wield greater premium power with potential markets. Platt's shop is part of a cluster group covering 35 individual agencies in five states, with total premium volume of $100 million. The cluster gave him an entree to the Hartford and Metropolitan (under customer service center contracts). 16. AUTOMATE! Automation can increase your productivity through transactional filing: As correspondence arrives, it's entered in the appropriate client file on a computer and later filed chronologically in paper form. This frees up the CSR to focus on sales while an assistant files renewals and endorsements. You can also use rotation servicing: Instead of splitting up clients alphabetically, CSRs work with anyone who calls. The result is quicker response and fewer returned calls. “CSRs must learn how to work with an electronic file and how to manage the conversation with the customer so they can complete the transaction while still on the phone,” declares Cunningham. “People just want the job done when they call; they don't want anyone to call them back.” 17. FIND YOUR OWN PERSPECTIVE “My goal is not to be the biggest agent in Longwood, Florida,” says George Frey, who owns the George Frey Agency. “I want to be the most profitable.”

The 10 Commandments Of Customer Service
These guidelines by Al Diamond for offering your customers world-class service speak for themselves. 1. Do things right ? every time. Of course, everyone tries to process items correctly. Why do we need to be so absolute in this commandment? When Agency Consulting Group, Inc. analyzes an agency’s operations, we inevitably find that simple errors come at a heavy cost in time, money, and customer satisfaction. One mistake made today might cost the time and effort of a CSR, accounting department, and a producer three months from now to sort out and correct. The answer: Develop a zero tolerance for errors. Will mistakes be made? Of course! However, your agency must make every effort to remedy system or training issues that permit mistakes. A zero tolerance for errors protects the client by providing the fastest and most efficient service, and saves the agency countless hours of analysis and correction. Although this commandment doesn’t require checking all transactions, you should make quality control audits a part of each manager’s responsibilities. A random monthly sampling of transactions on every employee will easily highlight where lack of training is generating errors. 2. Turn customer problems into opportunities to provide the highest grade of service possible and create “customers for life.” The complaint about disloyal customers moving for a few dollars in premium becomes moot when your agency has shown its added value and service differentiation. The best opportunity to reflect this value is when a customer has a problem. Actively seek customer problems and attack them in a way that will thrill the customer with your response. Complaints aren’t bad — they provide the opportunities on which to build heroic service. 3. Create service legends. A customer service representative drops off an ID card to a client at a local auto dealership; an agent supports an active claim by going onsite; an agency employee, sensitive to the needs and restrictions of a new mother, arranges to have forms for signature delivered instead of requiring the client to drive to the agency. These all provide examples of the “thrilling” ways that agents have helped make life a little easier for customers. Clients only talk about their insurance agent when they’re complaining, or when they’ve had a positive experience that’s so extraordinary and unexpected that they feel they must share it. It’s wise to provide an incentive bonus pool that awards serious dollars to an employee who has “thrilled” a customer during the previous month. If none can be documented, the money goes unspent. If bonus dollars are left in this budget at the end of the year, the agency can consider itself a failure: You didn’t “thrill” enough customers. 4. Treat every customer as you’d like to be treated. Nobody ever complains about being treated too well. With the notable exception of abusive clients, every agency staff member should treat every customer exactly as the employee dreams of being treated by a service company. “Do unto others … ” truly applies here. If many of us were to hear ourselves “telling” a customer what they’ll “have” to do, our demeanor would appall us. Although you and your staff hold your jobs at the customer’s pleasure, in the heat of the working day, you might not see yourself treating them as you’d want to be treated yourself. Even (or especially) when your customer is stressed, your job is to treat them as nicely as you would your own grandmother. The solution: Police each other in service teams. If any staff member hears customers being treated in a way that might be interpreted as negative, it’s their responsibility to bring this behavior to the attention of the person making the mistake. 5. Use continuous improvement to ask more questions. The best agents are grateful for their strengths, but are never satisfied with them. They (and all of their employees) constantly seek better ways of doing things. If they can get transactional filing to work, fine; they then start investigating optical scanning as the next step toward excellent service. Keep asking yourself, “How can we make this better?” Since there’s no perfect system, you can never leave well enough alone. 6. Remember, the customer’s perception is reality. If they think you blew it, you blew it! Do you ever find yourself arguing with a customer about their incorrect perception of a situation? If so, you’ve put yourself into a “lose/lose” scenario: If the customer wins, you lose, and if you win, you lose anyway because the customer doesn’t like losing. The best way to deal with this type of problem is to apologize and ask how you can make things right (even if you did nothing wrong in the first place). This action yields the battle to the customer, but does so in a way that permits them to forgive you and to explain how the situation can be remedied — which often involves re-explaining the events in different terms). 7. Guarantee your service ? unconditionally. If something isn’t right, apologize, fix it, and prevent it from happening again. After all, you guarantee your work anyway — it’s called E&O insurance. If you deny a mistake for fear of a lawsuit, you might well end up getting sued anyway, and lose the customer (including the stories they’ll tell about you for the next 10 years) as well. On the other hand, taking blame when it’s due, assuaging your customer’s concerns, and fixing the problem might “thrill” the customer (see #3 above). 8. Make work fun. I guarantee that employees who enjoy their work will perform better, becoming more productive, more creative, and more efficient. That doesn’t mean that you never have a bad moment (or a bad day), but you can certainly differentiate between employees who enjoy their job and those who drag into work, can’t wait to leave, and whose best friend is the wall clock for breaks and lunch hours. Some employees are simply in the wrong place: They realized too late that they don’t enjoy customer contact, and they’re stuck in their career. However, why should you be stuck in their career? Your only mistake was to hire them with that type of attitude. Although “career adjustment” might be a negative term, some employees who have left by that route have eventually thanked the agency owner for the crisis that moved them from a job they hated to another that they enjoyed. Other employees need some motivational efforts, including a break from the routine every once in a while (i.e. “Surprise, you have tomorrow off!”), contests that put some fun back into work, and department or agency-wide events once a month that relieve tension and give employees something in which to look forward (picnics, pot-luck lunches, speakers, etc.). One agency even brought in a physical therapist for anyone desiring a midday massage. 9. Be proud of your agency ? but never satisfied. This ties in with Commandment # 5 (Continuous Improvement), but refers primarily to your attitude toward yourself, your staff, the agency, the industry, etc. “Stinkin’ thinking” has brought down more agents than bad business ever did. Whether you have the best agency in the country, the city, or on the block, be proud of what you and your staff have accomplished, not upset with your deficiencies. Although you don’t want to put on rose-colored glasses and call a jackass a thoroughbred, almost every agency we’ve encountered had many strengths that deserved pride. Most overlooked their strengths because they concentrated on their weaknesses. Unfortunately, the self-fulfilling prophecy becomes real. If you think of yourself and your agency as a failure, you’ll become one (even if you’re outwardly successful). 10. Don’t forget that to your customers ? your people are the agency and the agency is the company. Never let your staff say “them and us” to a customer when referring to other people, departments, or management of the agency. To the person on the other end of the line, the staff member is the agency. If they blame claims, customer service, accounting, or management for a deficiency or problem, they weaken the agency with respect to the customer. Similarly, your agency is the company to your customers. Even though the company, not the agency, has caused delays and made mistakes, you can’t pass the buck in the eyes of the customer whose transaction is delayed or wrong. In many cases, they’ll think (even if they rarely say) that if you have to fight the company for something as simple as accuracy and timeliness, maybe they have the wrong company and the wrong agent. After all, you’re the one who placed the customer with that company because you believed that it was the best for them!