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Working With A Telemarketing Service
  WORKING WITH A TELEMARKETING SERVICE By Paul A. Robinson ...r-supplied lead. Why not see what telemarketing can do for you? Paul Robins...

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Agency Bill Vs. Direct Bill: Avoid Confusion
When I started in the agency side of the business in 1975, direct bill was strictly a Personal Lines billing method, used predominantly in Personal Auto. Today, direct bill has found its way into the Commercial arena. The claim involves a $200,000 lawsuit against both the agent and the carrier for improper cancellation of a Fidelity Bond. The agent had placed a Commercial package policy for a homeowners association. The premium was direct billed, except for the bond, which was agency billed. When the client completed the application, the premium they paid to the carrier included the premium for the bond. The carrier then refunded the bond portion to the client on the basis that it was to be agency billed. Meanwhile, the agent, looking for payment of the bond, was following up with notices for the owed bond premium. When the client didn't respond, the agent requested that the carrier cancel the bond for non-payment of premium. The homeowners association then reported an embezzlement of some $200,000 by a prior organization president. When they submitted a claim under the bond, the carrier denied coverage due to the cancellation. Questions of agency liability focused on the conversations and information communicated by the agency to the client, especially where there was a difference in the method of premium billing. The case was resolved when the carrier accepted coverage on the basis that the loss occurred before the cancellation. How might the agency have avoided the claim? This situation had the built-in problem of two methods of premium payment: Direct and agency billed. The client disputed the subsequent cancellation and claim denial. Documentation of the discussion between the client and agent would have assisted in the agency's defense. The matter turned out favorably due to the efforts of defense counsel and the carrier's acceptance of coverage for the underlying claim. Could a situation like this arise in your agency? It could probably happen in just about every agency with options for direct bill or agency bill. Proper communication and documentation, not just to clients but also among your staff, are essential to avoiding problems. When you send a policy to a customer, make it quite clear to them who they're supposed to pay for each coverage. Attach a note to the policy. If you change the billing method, be certain to bring this to the customer's attention. If you deliver the policy personally, put a note on it to avoid confusion. Because your staff will be advising customers on billing methods, be certain to have a means of identifying the billing methods on each of the policies. Don't just put a note on the file jacket. If the billing method changes, someone might forget to change the notation.

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Partnering With Carriers
Trust between you and your carriers must be a two-way street. Agencies have given carriers as many reasons to distrust their commitments as carriers have given agents. Time and again, both groups have changed attitudes, leaving loyalty and commitment in the dust. Perhaps the reason is that our definitions of loyalty and commitment are flawed. Although loyalty is a trait that human beings (and many animals) display for each other, it requires the existence of a personal, not business, bond. A parent will often remain loyal to a child or to another adult even if the other has done despicable things. However, if an employee commits fraud or a felonious crime, the corporation employing them has no personal bond that will maintain its loyalty to that person. Loyalty often continues for extended periods until and unless something happens to the bond between the two people. Business relationships, in themselves, don’t create loyalty. Your employees can deal with underwriters without creating a bond with them. You can work with company managers without ever bonding with them. Business relationships can go on for years without the issue of loyalty arising, until something goes wrong. Then one of the parties bemoans the lack of loyalty from the other party. But in reality, we can’t complain about severing a relationship that never existed. It’s like buying groceries from a supermarket: You can shop there for years, but if the store raises prices you’ll take your business elsewhere. Likewise, if the store finds it can make more money by moving out of your neighborhood, it will do so. However, some retailers do develop personal relationships with their customers. They’ll stay in a neighborhood, working with customers to make enough money to remain in business. Similarly, when loyalty exists, customers will absorb price increases to keep dealing with the business. How is loyalty built in business relationships between agencies and carriers? Friendship and mutual respect form the basis of loyal relationships. If the parties don’t trust each other, mutual respect is impossible. Business friendships, unlike social friendships, are built on trust and a high degree of concern about helping the other party achieve their goals. So both agencies and carriers need to build a feeling of mutual trust that each partner wants to help the other achieve their goals. Once this trust is proven, both sides will find their relationship runs more smoothly. Commitments are tangible objectives in which each partner agrees to support the other. An agent can “commit” to a level of growth to a carrier. A carrier can “commit” to speed and to a percentage of submissions that will be accepted. Commitment cannot be one sided (as are most agency/carrier “commitments”). If it’s unilateral, it’s a commandment, not a commitment. Commitment, unlike loyalty, is not unconditional. Conditions can arise that change the commitment of one person or entity to another. So let’s assume that the agency/carrier partnership is based on a mutual commitment, as long as the conditions of the relationship are unchanged. When conditions do change, one partner should notify the other and alter the commitment. Although a commitment without personal loyalty is possible, it’s necessarily weaker than a relationship strengthened by a feeling of loyalty between concurrent levels in each entity. The term “concurrent levels” is extremely important. Many agents have found themselves restricted or terminated even though they have excellent relationships with their underwriters or marketing representatives. These relationships are essential to the flow of business, but the agent must establish a relationship with the person in the company who has authority to determine the company’s commitment to the agent. Although every one below this person might be loyal, they can’t affect any change in the commitment to the agency. The national or international dimension of decision-making means that no company commitment can be guaranteed. However, barring major changes in carrier behavior, a commitment between agency and company negotiated in good faith and backed by the loyalty built on personal relationships between the agency staff and the carrier staff should withstand most volatility in the marketplace. Agency/carrier partnerships provide the most efficient and effective way for both parties to achieve their goals and objectives. If such partnerships continue to elude our industry, we should be prepared for the decline of Independent Agency System carriers as they seek better ways to manage their growth. I urge every agency to include its companies in the planning process, and to establish both personal relationships and commitments with its principal carriers.

Commonality Breeds Relationships
“We're more alike than we think.” Relationships, whether face-to-face or cyber-distanced, are difficult at best. In this document, Jack Burke shares his thoughts on why “just getting along together” can be tougher than it first appears. A friend who works at a local hospital shared this story about a new employee. From day one, it was obvious that neither of them liked the other. As a result of this initial dislike, each began to seek a basis for their feelings. Each picked incessantly at the other's smallest peculiarities. In essence, they first judged each other guilty without cause and then proceeded to build their individual cases. For absolutely no reason, each was expending a tremendous amount of mental energy on this relationship battlefield. One day, through an unusual set of circumstances, they had to work together closely. During the normal chitchat of the day, they both realized that they were each on their first marriage, although their respective husbands had been married before. This “commonality” turned toward telling stories about dealing with their husbands' ex-spouses. By the end of the day, they both decided that their husbands had shown remarkably bad judgment in their first marriages, but were extremely lucky in their second marriages. There's no fairy-tale ending here. Neither of these women really likes the other. However, after sharing some confidences and realizing some common aspects to their lives, they're able to get along and work well together. This story illustrates a basic fact: The more we get to know each other, the easier it is to maintain a relationship. Notice that I said “we” and “each other.” It's a two way street. Many businesses concentrate on gathering information about their customers — believing that the more they know about them, the better they'll do. That's only half-true. The other side of the equation is the need to let your customers get to know you — which, in turn, means that you need to get to know your employees. The more opportunities to discern commonality, the greater the potential bond. This isn't as easy as it might appear. We tend, through public relations, advertising, etc., to portray our businesses as perfect. If that's the only image our client receives, we might be in trouble on a couple of fronts. First, how many of us really enjoy spending time with a “perfect” friend? Second, perfection can raise unbelievably high levels of expectation. About 20 years ago, at a time when I believed that image was everything, my friend Doug and I were returning from dinner when he said, “Jack, I can't hang around with you anymore. Your life is perfect and that makes me feel inferior.” I was stunned. Yet, in hindsight, I now understand what he was saying. I never shared any of my difficulties or problems — just the good news. I was a bit of a braggart and I always made sure the outside looked good. Most of us don't bond from our successes; we bond from our human frailties. When you bond with your customers, they're aware and accepting of your shortcomings as they arise. Their expectations are more reasonable because they know that you aren't perfect. You can make mistakes — just like they do. In summary, every business should consider these three nuggets of wisdom: Let your customers get to know you, as you get to know them. Be honest and forthright in communications; acknowledge your shortcomings. Remember that customers bond with people, not companies.

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Marketing: The Art Of Different
Creativity in marketing has become mundane. Today's marketing creativity seems to have devolved into new twists on old techniques. The creative brains toil at better ways to restate old messages. A catchier print ad, a better letter, a more memorable commercial-the script may change, but it's the same scenario. Even with the new electronic ad media, such as computer networks and CD-ROM, originality and imagination seem to be sequestered in a closet. But every so often comes a breath of fresh air. Someone somewhere does something unique, which provides them with a marketing edge in their community. 'Every so often' became a reality in Clarksville, TN during the winter of '93. Enhancing the holiday spirit was the goal of the Clarksville area Chamber of Commerce's Christmas Decoration Contest, which had commercial as well as residential participants. James Dunn of Clarksville's Dunn Insurance, Inc. decided against entering a float in the Christmas Parade because of the immensity of the task-but he agreed to enter the less demanding commercial category of the decoration contest. Little did he realize he'd soon be getting Dunn Insurance's name on the front page of the local paper twice, plus a full front-page write-up-not to mention extra publicity from a contest within the contest and a new concept for the agency's Christmas card. In fact, from the grocery store to private parties, Dunn couldn't go anywhere without people talking about his agency's entry. Dunn gives most of the credit to his son, Jimmy Jr., who suggested a giant snowman in lieu of a more traditional outdoor Christmas tree. Based on Jimmy's styrofoam model, construction began the day after Thanksgiving and took a week to complete. Chicken wire, poly insulation, and other odd materials were bonded with glue onto the agency's front signpost. Soon the arms of a giant 15-foot-tall snowman reached up to hold both sides of the agency sign-seeming to wave to passers-by. To add a dramatic touch, more than 2,000 white Christmas lights were attached to the interior chicken wire, providing a warm, glowing effect. And, of course, 'Seasons Greetings' was added to the sign below the Dunn Insurance Agency name. Jimmy's design also featured a two-faced Santa, so each direction of traffic could have its own view. Dunn chuckles as talks about the calls he received even during the construction phase. They ran short of the poly insulation covering the chicken wire, leaving the lower section of the snowman exposed until more insulation could be collected. The phones soon began to ring about the Clarksville 'flasher.' The agency won first place in the commercial category, and Dunn Insurance won a publicity bonanza. That's not the end of the story, however. Rather than stopping at first place, Dunn built on the publicity with his own 'Name the Snowman' contest. With a $50 savings bond as the lure, the contest generated more than 400 entries. The winning name, 'Bondable Snowman,' was suggested by a 12-year-old girl who lived over 40 miles away. Of course, both the contest and the winner generated additional publicity for the agency. But the story's still not over. Dunn gathered his entire staff around the snowman for a group photo and turned that photo into the agency's Christmas card. Now that's what I call full-circle creativity in marketing. The Dunn Agency came up with an original idea and continued to build on it. The question most of us should ask is, 'Would we have stopped at winning the contest?' Unfortunately, I think all too many of us would have. The Art Of Creativity Marketing is designed to gain favorable attention for your company or product. Yet how often do we: brainstorm for new ideas, take advantage of creative opportunities, or maximize the opportunities when they exist? Here are a few examples of what I consider creative marketing: A retail chain in New Jersey builds its image around selected community charities. It started with an annual reverse raffle co-produced with five local charities, involving community youth, shelters for abused women, and the local hospital. Although the raffle continues, the chain has gone on to produce two major concerts each year to generate additional revenue for charity. Co-sponsors include a local bank and a supermarket chain. During the promotion and ticket sale phase, every bank customer sees signs with the retailer's name, and every grocery shopper has a bag imprinted with the retailer's name, too! When running the car sales division of Hertz Corporation, I developed a program for leasing used rentals to augment sales efforts. Not only was this long before leasing became a popular alternative to purchase, but it involved used, not new, cars. Traditional newspaper and radio advertising was not acceptable-there was just too much to explain. It needed a one-to-one approach. Rather than resigning ourselves to just talking about this leasing to customers at our sales locations, we developed a quick training program on leasing for every Hertz rental agent. Realizing the trick would be to create an opening for the agents to discuss the leasing with rental customers and prospective purchasers, we ordered thousands of bright yellow buttons that said simply, ' Ask Me. ' We gave the buttons to all employees, the customers and prospects did indeed ask, and the total cost was less than a typical weekend's advertising in a major market. Business cards and agency brochures provide other examples of 'nice but mundane.' A few agencies around North America have gotten creative by producing short audio or video programs that tell their story. These marketing productions get the prospect's attention and allow an agency to really introduce itself and its lines. Granted, video can get expensive, but audio tapes are fairly reasonable and can be packaged in any number of ways -- depending on your budget and image. There's also an additional benefit to this type of creativity. Too many business cards, brochures, and letters end up in the prospect's wastebasket. Audio and video cassettes are valuable to the holder and are seldom tossed. I've received calls as long as a year after an audio mailing. The caller generally says, 'It's been sitting on my desk for a year, and I just got around to listening to it.' Sponsoring a local golf tournament is another great way to market your agency or brokerage. It's done wonders for Nissan and many other national corporations, so why not duplicate their efforts on a local level? Bring in an antique dealer as a co-sponsor, and buy some hole-in-one insurance to cover an antique giveaway. Local realtors and banks are also excellent co-sponsors who can help with the prizes. Not only is the publicity great, but the tournament affords you the chance to network with clients and prospects. Closer to the office, think about your telephone system. Does a client on hold hear silence or a radio station? If you answered 'radio station,' beware of a couple of facts: (1) that your clients and prospects may be listening to a competitor's commercial; and (2) that ASCAP and BMI can levy stiff fines if you haven't purchased a licensing agreement to rebroadcast the music over your phone system. Don't laugh! Some agencies have been caught and fined. This dilemma's creative answer is a message-on-hold service. For relatively little expense, you can have a message tape professionally produced that talks to your clients about your services while they're on hold. Do you fax information to clients and prospects? Do you use a cover page? You've probably answered 'yes' to both questions. Now comes the big one: 'Does your cover page list all the services and products you provide?' If not, you're missing a creative opportunity to market your message. There are hundreds of ways to market your agency or brokerage creatively, and most of them are far less expensive than traditional advertising. Develop an opportunistic eye in your community. Brainstorm with staff members a couple of times per year. Maintain strong relations with the local chamber of commerce and other groups that cater to your particular market, whether commercial, personal, or both. Above all, get everybody involved. Many of the opportunities you encounter will come from unlikely sources, so it pays to have everyone keeping a watchful eye. Finally, like James Dunn, when you do have an opportunity, maximize it.

Csr Compensation: Ways That Work
'Nothing happens until somebody sells something.' Traditionally, in the independent insurance agency that 'somebody' has been the producer. But these days, more and more agents are using their Customer Service Representatives (CSRs) as a valuable resource to generate new and renewal business. Your CSRs can, and should, deal with every aspect of the selling process: Prospecting and X-dating; upgrading coverages (by increasing limits or adding endorsements); and account rounding (using the 'by the way' approach)— not to mention writing walk-in or call-in business. It's the CSRs who handle the 'demand contacts' (customers' questions about billings, endorsement, claims, and so forth that arise after the sale) whenever your producers are out selling-which should be at least 80% of their working day. In other words, your CSRs form the backbone of the customer relations program which you need to survive-and thrive-in today's consumerist society. CSRs who are producing sales and earnings for your agency deserve a compensation system that is: a) based on financial and extra-financial incentives; b) consistent or equitable (applies equally to every CSR); c) results-oriented; and d) comprehensive (i.e., provides incentives for every aspect of the sales process). To develop an effective compensation plan, you'll need to set-and stick to-specific standards, then review your CSRs' performance at regular intervals and make 'mid-course corrections' if needed. You can choose from a variety of incentives: CSRs may earn financial rewards either on an individual bases (such as cash payments for prospects or X-dates, or sales commissions-if the employee is licensed) or as members of the agency (through a profit-sharing plan, bonuses, or a share of contingency commissions). Non-financial rewards might include anything from free trips, home appliances, or even a car to such 'warm fuzzies' as a 'CSR of the month' award. To give you some idea of how creative agents can combine these incentives to develop effective CSR compensation plans, here are several examples chosen from interviews with hundreds of agencies, large and small, throughout the nation over the last five years: Afton Insurance Agency, Houston, Texas. CSRs receive a fixed commission for each sale they make, with the money deposited each month into savings accounts the agency has opened for them. The CSRs love the program: one has earned a piano, another has a new VCR, and all of them have hefty balances in their accounts. Anderson Insurance, Valdosta, Georgia, Principal Bob Anderson has novelty coins stamped with the agency's name. Whenever a CSR sends a policy or corresponds with a customer, she puts a coin in the envelope, with a card asking the insured to return the coin to the agency if they believe their CSR has been giving them good service. Most clients return the coins, which are worth $2.50 apiece. CSRs also earn coins for such in-house functions such as X-dating, prospecting, or writing an account. They can exchange coins for everything from an umbrella to a gift certificate, savings bond, or half a day off. Hawkins Group, Edina, Missouri. The agency sets annual and monthly production goals for each CSR based on average production over the current and previous year. At month's end, each person gets a spreadsheet comparing results with the monthly projection and with the same period in the previous year. The CSR with the highest percentage of increase in her book of business gets a $50 savings bond. The CSRs who hold P/C and Life insurance licenses receive 50% of first-year commissions (no renewals), plus $1 for every X-date they generate. Elliott Insurance Service, Inc. Yakima, Washington. Says principal Dick Elliott, 'Our CSRs want to make this thing fly because they know doggone well that we're going to share with them.' The agency has a profit-sharing plan-and each CSR receives 10% of the agency's contingency commissions, plus a pro-rata share of interest or dividends on investment funds. In one year, each CSR took home an extra $8,000 in incentives. Ted Marty and Associates, Cincinnati, Ohio. Principal Ted Marty sees the agency's CSRs as a valuable source of business. So he pays them 100% of first-year commission for every new client they bring in, plus 50% of commissions for every account upgrade-such as adding an Umbrella or increasing limits. Roybal Insurance Agency, Billings, Montana. 'We have a lot of incentives because we enjoy them,' says principal Jess Roybal. Once a month, Roybal fills a cookie jar with $500 (one $100 bill, two $50s, five $20s, twenty $5s, and one hundred $1 bills). For every account she upgrades, a CSR gets one chance to draw form the jar. The agency also pays the CSRs a $200 bonus for passing their licensing exam, offers a profit-sharing check every three months, and buys a new car (plus gas, insurance, and upkeep) every year for each CSR's personal use. Remember that 'cookie cutter compensation' won't work. You'll need to base your CSR compensation plan on the structure and needs of your agency. So give it your best shot-and bear in mind that a CSR is a terrible selling asset to waste.