Should You Use Internet Sales Leads?

Internet Leads are a valuable tool for Personal Lines Growth, but not for everyone.    Read on and learn why you should consider adding them to your marketing toolkit.

What are Internet Leads?

internet leads

By Internet leads, I mean purchased leads, not leads generated by your online marketing, whether that be through SEO, Email Marketing, Social Media, etc.

There are several companies in the market that sell Internet leads.  NetQuote is the granddaddy of them all, but over time more and more competitors have entered the field of play.

Here’s how they work.  A customer clicks on a link for a quote.  Rarely, are these quoting engines but information gathering tools.  In a sense they are click-bait, gathering data that can be distributed to multiple companies and other lead aggregators.  Those leads are then sold back out to agents and companies.

To get a sense of how they work and what kind of information they collect, you should run an experiment and try it yourself.

I did.

After seeing a ridiculous amount of commercials for the General, Mr. Shaquille Oneal convinced me to go online and get a quote with them.  I was pretty sure the General did not write in my state, so I wanted to see what would happen.

I entered all my information, and was told they couldn’t quote me.  They mentioned they had other companies who could give me a rate.  I accepted, and within minutes, I got an email from an Insurance company providing a quote.  Then within 30 minutes, I received a phone call from an agent trying to sell me a policy.  I was honest with the agent and explained what I was doing.  We talked a couple minutes about his business, and I wished him luck.

Over the next couple months, I received multiple emails and a couple more phone calls from other agents and companies soliciting my business.

Who should use them?

Buying Internet Leads are not for everyone.  However, if you’ve never used them, it might be worth a 30 day experiment.  Make sure you have the capacity to handle the activity they could generate.

If you are a new agency, without good lead flow, they a great tool to add to your marketing.  If you have new producers in your agency, and you are trying to generate activity for them, they work.  My experience with agencies that have been successful with them is that they are temporary.  Some use them to kickstart production and activity, and others use them seasonally.  When other marketing efforts are not bringing opportunities, they can prime the sales pump.  They are also good for sales training.  It’s easy to use them to help a new producer learn to communicate and sell over the phone.  Also it helps them create followup systems for future sales.

8 Tips For Using Internet Leads

1. Don’t be cheap.  Be willing to spend as much money as your budget allows.  Lead quality is in direct proportion to how much you spend.  Cheap leads are usually dead or poor quality customers.  The quickest way to find out how much to spend is to determine how much a customer is worth to you.  This will give you your maximum amount you want to spend on the lead.  For example, let’s say a customer is worth $100 to you.  Assume you will close 10% of the leads coming into the agency.  The max amount you would spend would be $10 per lead.

2. Target Leads.  Choose your demographic as specific as possible.  Most companies allow you multiple options for demographic choice, such as zip, age, income, etc.  It all depends on your market and what you are looking for.  The agent I know that uses them best will only buy home leads.  His theory is that if they have a home they have a car, and he plans on cross-selling.  This way he is paying for one lead but gets two.

3. Make someone responsible.  Someone in the agency needs to own the leads.  If not, they fall through the cracks.  They get ignored, and not pursued with enthusiasm.  Also if you have one person managing and responding to the leads it becomes much easier to track results.

4. Respond Quickly.  If there is a golden rule to internet leads, this is it.  You must respond quickly, instantaneously, lightning fast, no hesitation, drop everything else.  If you can’t do it, don’t buy them.  Remember, you aren’t the only one getting the leads.  Multiple agents and company call centers are getting the leads.  The most responsive wins over the most competitive.  If you get in first you have a huge advantage.  If you wait too long, the customer could have purchased or become disinterested.  These leads could come at anytime including evenings and weekends.  You must respond.

5. Sell It.  When you call you are not just selling your rate, you are selling yourself.  If you are an independent agent, there is a good chance one of your carriers is more competitive than the price the customer has today.  The fact they are shopping is a good indication that something is wrong.  The advantage the captive writer has is the ability quote the person on the phone and give them a rate on the spot.  Only having one company makes this easy.

With comparative raters, an independent can do this as well.  You may not be 100% accurate, but no one is in the beginning.  Don’t worry about it, do your best.  There are reports to be ran and more questions to ask.  The goal here is to sell your agency.

Again you are not the only call they are going to get.  Use this to your advantage, especially if you responded quickly and are the first to quote.

Somewhere in your call with the customer use a script like this:

“When you entered your info online, it got sent to multiple agents that will probably starting calling you, so be prepared.  Here’s what I can do for you.  I will do the shopping for you and quote you through X number of companies.  When they call, let them know you already had someone do the work for you.”

I learned this from an agent friend. This tactic immediately increased his close rate.

6. Create Loyalty.  Congrats!  You converted the lead to a customer.  Warning! Internet customers typically are a greater danger for leaving you at renewal.  You didn’t get them through a relationship.  They may not want one.  You are a just a transaction for them.  You have to change that.  These are customers you need to touch a lot during their first renewal.  Send thank you notes, birthday cards, holiday cards, etc.  Make sure they are getting emails from regularly that first year.  Make them feel a part of your agency family.  No matter how you do it, whether through calls, mail, email, social media, etc; make sure to touch them multiple times that first year.

7. Follow-Up.  You didn’t sell it, but don’t let the lead die.  Two things have probably happened.  You didn’t reach the customer or didn’t sell it.

Call them 7 times before you give up.  Send an email or postcard if you never made contact.  If you have their xdate, put them in your followup system to contact before their next renewal.

If you didn’t convert them, do the same.  Put them in your followup, and don’t give up until they buy or tell you to leave them alone.

8. Track Results.  Like your other marketing activities, you must track it.  This is the only way you will know if you are getting your money’s worth.  Are you making more than you are spending?  Are you losing money on them?  Are you breaking even?  Do you have one salesperson doing better with them than another?  Does one vendor have better quality leads than another?  It’s tedious, but you will be much more effective with your marketing time and dollars.

If you’ve used internet leads before, what’s your experience?

Be Productive,

Theron

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8 Ways to Market to Realtors & Lenders

Marketing for personal lines has become increasingly harder over the years.

Customers squashed telemarketing sales.  Fewer people have land lines, so it is harder to find a person’s number.  Many go unlisted, and this makes them hidden.  Many people will just not answer the phone if they don’t recognize the number.

Door to door is really not cost effective because of the return on investment.

Direct-mail still works, but you need to a lot of it, as well as time and money to get your copy just right.

Email marketing is amazing, but for it to work without becoming a spammer, you have to capture emails from current customers, prospects, and potential lead sources.

One method that has a low barrier to entry, but can generate almost instant returns is marketing to lenders and realtors.

When a customer buys a home, he is more likely to allow his insurance to be shopped.  To find and interact with those customers, you have to get to those involved in the transaction.

Realtors and lenders are the perfect people to insert you into that transaction.

This is not a secret anymore.  I would bet these businesses sees more insurance agents today than they did 10 years ago.

It’s not impossible to stand out among this lead-source, but it takes a little more thought and strategy than it used to.

1. Think like a glass rep.  Every week your agency gets 1 or more glass reps soliciting business from you.  I am sure there are a couple of these vendors that you really use, and encourage your customers to use.  But why?  Why are there some vendors that you use and others you don’t?  Think through this question.  It will help you develop a strategy to improve your own marketing with realtors and lenders. The good ones are consistent marketers.  Someone in your office needs to be that person.   Print out a 5 mile radius map of your agency and all the realtor and lending offices within that scope.  List them out, then make a plan to consistently visit these offices.

For example, maybe you can only spare one day a week to this type of marketing.  Grab you list, start from the top, and start visiting.  See as many as possible in the time you allotted yourself.  Check each off, and make notes.  Next week pick up where you left off and do the same.  Eventually you will get to the bottom of your list.  Maybe it will take you a month or two, but once you reach the bottom start over.

Being a consistent face and voice in their business will help you understand them, and allow them to be comfortable with you.  I guarantee that many of your competitors make one or two visits, then quit, when no business starts flowing.

2.  Leave- Behinds.  These don’t have to be complicated, but are markers of visit.  They are footprints and clues you were there.  It can be as simple as a business card.  The only problem with cards is that they are easily thrown away.  Notepads are great because they get used, and if they are sticky get posted around an office.  Pens tend to hang around as well.  Food and candy jars are always appreciated.  If it’s your first visit, take their card and then email them a followup note after you get back in the office.

3.  Ask for business.  Of course you are going to do this.  But most people ask for it in the future: “When you have something you are trying to close, please give us a shot at quoting it.”  Add the present.  “When you have something, we’d be happy to quote it for you.  Are you working on something now I can look at for you?  Is there something I can take back to the office, and get you an answer today?”  I worked at an agency where we did a lot of this type of marketing, and when we started asking for something now and not in the future, we often walked out with quotes in hand.  Sometimes all you need is a chance to generate future streams of business.

4.  Find the right person.  Knowing the decision maker is one of the keys to sales.  It is no different here.  Someone in the office you are visiting has enormous influence, and can usher you into that position of influence as well.  The secret is knowing them.  This can be difficult to discern on a first visit.  Once you figure it out, begin a relationship of trust.  This will allow you to create a mutually beneficial partnership going forward.

5.  Be a sponsor.  Lenders and Realtors are sales organizations.  They do regular sales meetings, sometimes weekly, monthly, quarterly, etc.  Ask to sponsor their meetings with food or giveaways.  Most will let you speak for 5 to 10 minutes if you are bringing something to the meeting.  This is something most insurance companies will comp for you as well.

6.  Find a need and meet it.  This one takes time, and you will rarely discover on the first visit.  You need to build trust and find the right people to talk with.  But every organizations has needs.  These are the gaps and struggles inside their business.  It could be anything from sales training, access to information, marketing relationships, etc.  Over time look for these needs and get creative on how to help them.  One agency I know found a smaller realty office that was trying to grow.  Their marketing wasn’t great, but they were trying hard.  The agent partnered with them for a trade show, splitting time and booth cost.  You can bet the agency got the majority of their leads.

7. Pay for it.  Agents are scared to do this, but every day they pay for radio spots, direct mail, yellow page ads, internet leads, telemarketing leads, xdate sheets, etc.  It’s the same thing.  The only thing you need to worry about is not making the payments contingent upon selling the business.  Most if not all Departments of Insurance outlaw this.

I’ve seen two effective ways agents have done this successfully.  First they pay a dollar amount per lead.  You have to run some ROI calculations to determine your maximum spend; based on close rates, average revenue, average retention, etc.  Also it needs to be attractive enough to make a difference as well.  This works.  The other is to do contests.  Within an office, give a gift card of a substantial amount to the realtor or loan officer that sends the most leads in a month.

Make sure you stress they need to be a qualified lead.  You don’t want to get a name and number, call the customer, and have them act surprised at your attempt to quote their business.  I know some agencies require a list of information to make the quote valid.

8.  Lunch & Learns.  This strategy is highly effective at getting you in front of groups.  Realtors and Lenders give misinformation about insurance to consumers all the time.  Be an expert and give them information they can use with their customers regarding insurance for their property.  You are not trying to make them an expert, but it empower them with a couple accurate talking points.   Plus if you are providing lunch, most people will give you the courtesy to listen for a while.

Before you reinvent the wheel, grab a company person’s wallet and their powerpoint library. This is an easy spend for most company folks.  They may even throw in gift cards for a drawing.  Also, they might have presentation already created about property insurance.  This saves you some time.  Gather the business cards of everyone there, and send them a followup note, if you really want to impress.

If you networked with other agents for any length of time, this strategy is one frequently mentioned as a personal lines growth driver.  It may feel like everyone is doing it, but I promise few are doing it well.  Schedule your marketing, be consistent, ask for opportunities, and repeat.

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Customers You Don’t Want

One of the hallmarks of marketing is developing a profile of an ideal customer.

You pick the customer or niche that fits your business model, and then you keep that niche in mind when you craft any marketing strategy or customer facing material.  This helps immensely when brainstorming new lead sources or marketing ideas.  An image of the ideal customer informs how you design your website, business cards, trade-shows, brochures, etc.  When you understand this person fully, and take action on that information, you become a better marketer than your competitors.

This became clear on school field trip.  I chaperoned a trip to a radio station.  This was a radio conglomerate with multiple brands and channels stuffed inside their building.  Each channel had their own booth and office.  One was talk radio, another country, today’s hits, classic rock, etc.  In each booth, printed in large letters on the wall was a list of characteristics of their target demographic.

DJ’s, salespeople, and decision makers could not avoid this sheet when performing their daily actions.

Agencies have this list as well.  Most don’t have it posted, but the owner knows it, and sometimes the staff.  It’s a great idea to get this out of your head and distribute it throughout your organization.

While knowing your ideal customer is critical, what might be equally important is understanding the “Customer You Don’t Want”.

bad customers
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What does that person look like, and what do you do to avoid them?

Here some identifiers to help brainstorm this person:

  • Time-wasters. Write down the qualities of a customer that is a time waster. He never offers any opportunity for revenue activity, but demands attention more than normal.
  • Late-payer.  You chase him each month to give you money to keep their policy in force.
  • Frequent claimant.  They call in a claim too regularly, or are always asking “what-if” claims questions.  Alarm bells ring in your head, suspicious of their potential next move.
  • Billing questioner.  They pay their bills on time, but have questions every month related to the accounting breakdown of their bill.
  • Endorsement happy.  Every month they are doing something different to their policy; new cars, new drivers, change in coverage, etc.
  • Grumpy & Angry.  This one ruins the mood of every person in your office.  Every interaction is negative, and you can’t believe they stick around.
  • Bad Demographics.  Not red-lining, but identifying areas outside your scope of business.  if someone contacts you about their homeowners and they live in another hundreds of miles away they might not be the best customers.  Million dollar homes are attractive to write, but you might not have the markets for this and trying to fit a square peg in a round hole could generate more work than it’s worth.

There is no doubt that a few of these customers are part of being an insurance agent.   Some even have very good reasons to retain as clients.

By identifying them, they give you an opportunity to minimize their influence inside the agency.

If you are an owner, I bet you have a blacklist.  Does your staff know it?  What do you do in your agency to minimize the bad customer?

How A Local Business Taught Me How To Engage Customers Online

Local businesses have groaned for years under the weight of national giants.  Small retailers curse the big box store when it moves down the street.  Bookstores rail against the online stores.  Insurance agents complain about the budgets of the direct companies with lizard mascots and mega marketing.

How can we compete?  Social media, content marketing, and email strategies equalize the playing field, and even give us little guys an advantage.

Local businesses don’t need national attention.  They only need the obsessive attention of their local market, and these new tools allow such attention because it can magnify the engagement a local business already garners from their small base of customers.

Don’t believe me?

Here’s a story of a local business that is dying and being swamped by national corporations.  Yet, one employee, Adam, decided to quit complaining about the big boys and get creative.  He used these new tools to create demand for his product making it unique and specific to his audience.

Adam is was local sportscaster, and he chronicled his experiment on his own blog including a video of the broadcast which evolved from creative engagement with his customers.

Listen to his insights.

First, he recognizes the realities of his business:  “The local sportscast is dying. The emergence of all-sports channels and catered fan websites has rendered this medium mundane. No opinions, not enough time to delve into details and a complete lack of resources.”

Second, he finds a solution: “So, other than expecting people to turn on their TV at a designated time because they always have…how does the local sportscast attract an audience? Engage them.”

Third, he applies it to his problem: “Last night I tweeted out that I’m starting something called #Sportscast. This week’s theme: Old School Wrestlers. I simply asked for people to tweet me the names of former wrestlers and I’d try to fit them into my sportscast.  Nearly 50 responses later, I had a pool of possibilities. The result is the video…”

Ok, I know we are not in a business as exciting as sportscasting, so you are probably thinking, “Great idea, but how does this apply to me.”

Ask yourself questions?

Who is my audience (or customers)?

What can I do for them that big boys can’t?

What do I uniquely know about them?

Brainstorm with me.

I live in Louisville, KY, and every year we have a big event that you may have heard of—the Kentucky Derby.

Think through questions that people might have about Insurance related to this specific local event that the big boys won’t answer.

  • Do I have coverage to rent my house for Derby week?  (this happens a lot)
  • What if I have a Derby party with lots of mint juleps, should I worry about liability coverage
  • If I am at the track, and someone steals my winning ticket, am I covered?
  • What if someone breaks a car window at the track or steals my ipod out of the car?  Should I pay out of pocket or turn in a claim?
  • What if my business sponsors an event at the track and someone gets hurt, who is liable?

These questions could easily turn into newsletter content, blog posts, tweets, etc., and they are uniquely you.

Or you could get plain silly with social media, and post pictures of agency owners in crazy Derby hats.

At your next agency meeting, think through who your customer is and what are their likes and dislikes.  Find ways to ask and engage them, and create content that demands their attention because it answers their questions and fills a need in their world

(this post originally appeared on the Grow website)

7 Tricks to Create Unlimited Content

Agent Jack has been looking for ways to increase market share and reach people beyond his traditional advertising and networking. Recently he stumbled onto the concept of Content Marketing.

He got it!

photo credit: Clayton Cottingham | Photography 28/366 via photopin (license)

Last week he needed help with a plumbing task and googled “how do I stop my toilet from running”.  Google sent him to a Youtube video where a local plumber was walking him through the process of fixing his toilet.  A week later an outside spigot froze up and he knew it was beyond his abilities, but remembered the guy on the video that had helped him.  He picked up the phone and called Mr Youtube Plumber.  By the next day all was working again, and Agent Jack had a plumber for life.

He has seen content marketing at work, and wants to use in his agency.

He contacts his tech guy and makes sure that he is able to generate “blog” content through his current website.  Within days everything is setup and Jack is ready to start writing.  He blocks off time in his schedule, closes the door, and puts his phone on “do not disturb”.  His wordprocessor launches and suddenly a blank screen begins mocking him.  His mind full of ideas begins to mirror the screen in front of him, and everything disappears.

An hour later, he manages to type a paragraph or two, but nothing that will satisfy this content machine he is trying to launch.

How will he ever feed this content monster that he just created?

Brainstorming–but not how you think.

Here are 7 ways to use brainstorming to create unlimited content:

1.  Do It Alone.  When you hear brainstorming, you probably imagine yourself trapped in a room with friends or worse–strangers.  A white board is staring at your face.  A grumpy facilitor with a red marker in hand is waiting for brilliant ideas to jump out at him so he can paint the board with ideas.  Nothing happens.  Crickets are chirpiring.  Finally one brave soul chimes in and the crowd groans.  Eventually momentum builds, but at the end of the session you wonder if anything creative really happened.

Guess what, science has proved your intuition correct.

Keith Sawyer, a psychologist at Washington University, summarizes the science: “Decades of research have consistently shown that brainstorming groups think of far fewer ideas than the same number of people who work alone.”  

Brainstorming works, but not like conventional wisdom has schooled us.  Do it alone.

2.  Use Your People.  This sounds like I am totally backtracking on what I just said.  I didn’t say brainstorm with people.  I said use your people.  Make them do it alone as well.  Give them cues and questions to help spur thought, and ask them to spend twenty minutes one morning cranking out as many ideas as possible for potential posts.

The quote above from our eminent scientist had a portion deleted from the end of the sentence.  Here it is:

“brainstorming groups think of far fewer ideas than the same number of people who work alone and later pool their ideas.”

Here’s the key.  Let everyone brainstorm alone, but then bring your talent together to share their ideas.  This will create robust lists of content and spur more thinking and further ideas.  The reason this works is that the shy ones in the group are not bullied into silence by the more aggressive personality.  All people generate ideas, and come to the table on some equal footing.

3.  Give Rules.  I have hinted at this, but here are the rules that I am suggesting.  Ask yourself questions, but whatever you do don’t censor yourself.  Write or type as fast as you can so your internal editor can’t grab your hand and stop you.  Don’t worry if stupid or silly ideas start flowing from your pen.  Don’t stop from chasing those rabbits and any weird thought that might come out of your head.  You never know that it might spark something equally creative down the trail.

If you stop coming up with ideas, just keep writing.  Start writing “I can’t think of anymore ideas, help, help, help.”  Start repeating what you previously wrote but do it fast.  I promise ideas will come.  Give yourself a timer and one that ticks and the pressure will make things happen.  This forces you to make things happen.  Also have a list of topics or questions to help spur activity.  The best rule is to do it fast, avoid censoring yourself, and editing what you say.

4.  Use Your Customers.  Questions are a way to use your customers.  Have everyone think through the most recent and most common questions they get from customers and friends about insurance.

Think by product & niches: auto, home, umbrella, bops, etc.  This is how you search in Google.  You type in a questions you want solved.

This method won’t just give you great content ideas, but will provide you with the title for your posts.  For example:  “Should I get the insurance waiver from my rental car company?”  “Why do I need flood if I don’t live near water?”  “Why does credit affect my insurance price?”  “Why is my neighbor’s insurance cheaper than mine when we have similar cars?”

This is almost limitless.  Have staff begin recording all the questions, so you can begin answering in posts.

5.  Solve Misunderstanding.  Misunderstanding are really a subset of questions, but phrased slightly different. This difference can be incredibly effective.  It allows you to pick up a topic, spin it, and come at a different angle.

What are the most common misunderstandings about insurance?  Think claim time.  This is where what someone thought might happen begins to differ from reality.  You can really shine here, because some of their misunderstanding may have come from your competitor.  This sets you as an expert in your field, and you can address not only customers, but your referral sources such as realtors and lenders.

6.  Things You Wish Customers Knew.  Here is another category that is full of possibilities.

What do you wish your customers knew about insurance before they bought?  What do you wish they knew before they turned in a claim?  What do you wish they knew that affect their insurance rate?

The other avenue to think of here is not merely your business of insurance, but you can talk about agency history, the unique background of employees and owners.

You can talk about what you wish people knew about their community.  These kinds of posts bring personality and a level of humanity to your business so you don’t always look like you are pushing insurance down everyone’s throats.

7.  Best Ofs.  I stole this one directly from the mind of Marcus Sheridan.  If you don’t follow his Sales Lion blog, you need to.

“Best ofs” are not necessarily insurance specific.  Think about the things you and the people in your agency like about your city.  What are the best restaurants in town?  How about the best body shops, or electricians, or plumbers?  This could be a time you pump up the businesses of your customers.  You could write about the best vehicles for safety.  Write on the best pieces of equipment to stop leaks in your pipes.

Once you start on the “best ofs” you will find tons of content.

8.  Use The Calendar.  Grab a calendar and begin thinking about what happens in January in our country, state or city then I write about it.  How about driving in ice or snow?  How to winterize?

What happens in February?  A lot of jewelry is purchased.  Write about how to cover expensive or non-expensive jewelry.

March?  Talk about March Madness basketball.  Go through every month, and I bet you can come up with calendar content with very little prompting.

Agent Jack finished this list of 7 and feels relief.  The monster of content creation has been tamed, now that he has lists of potential posts to write.  It may be years before the monster raises his ugly head looking to be fed.

The task of content creation can be overwhelming, but don’t let blank screens and whiteboards overwhelm you.  Begin with a couple ideas and start creating topics and titles.  You will be surprised how fast and easy the ideas come.

Lack of content will never be your excuse in your marketing journey.

If you create content today, what do you do to keep the pump primed and the ideas flowing?

(this originally appeared on the Grow website)

Why Insurance Agents Should Embrace Social Media and 5 Quick Steps to Start

Ok, you are scared, and not sure of this digital unknown. You don’t know what to do. You think it’s over your head. You are afraid it will waste your time.

 

Photo credit: ~Aphrodite via Foter.com / CC BY-NC-NDBut, your leads are slowing down, your customer base is getting older, and you are tired of fighting the marketing budgets of the Insurance giants.

Enter Social Media.

Taking your business online may feel like walking into some unknown mystical cyber-world where sales and marketing magically happen, if you know how to push the right buttons.

Taking your business online may feel like walking into some unknown mystical cyber-world where sales and marketing magically happen, if you know how to push the right buttons.

Let me de-mystify the process for you.

Today, you tell me your business comes from referrals. I believe you. You’ve spent your career networking.

You joined the Chamber of Commerce, Rotary, Jaycees. You coached baseball, basketball, soccer. You developed relationships with home-builders, mortgage brokers, realtors.

People know you and love you. That’s why you are in sales.

You gave of yourself. You created value for people. You engaged with them. They learned to trust you.

Think about this question.

How many people could you connect with at a Rotary meeting? The baseball diamond? The Chamber? The soccer field? 10, 20, maybe 30. How much time did that take? One hour. Maybe two.

Get mathematical and put this into a formula.

Networking Connections = 20 people x 1 Hour

So if do one event every work day, you would have:

20 people x 5 hours = 100 Networking Connections

Digital Marketing is nothing more than Networking online, and you already have the skill-set. People like you and trust you, because you know how to engage with people.

The digital space just magnifies it.

Rather than being able to network with 20 per hour. You can potentially engage with hundreds and maybe even thousands per hour.

Plug in the numbers with the same networking time commitment as before.

500 contacts x 5 hours = 2500 Networking Connections

How do you start?

Find a committed person in your agency (this could be you). Age doesn’t matter here. Commitment and willingness is the key. If they are already connected online, they make a great candidate. Look around and see who has a smart phone. Find someone who knows how to network physically; it is the same skill-set.

Pick a Social Network. It doesn’t really matter which one: Facebook, Twitter, Pinterest, LinkedIn are all great choices.

Find models. You are not alone. There are already agents, agencies, and other small businesses networking successful online. Find them. Connect with them. Model what they do. This will give you a giant leap forward because you will learn from their successes and failures.

Find your customers, niches, and potential niches. Once who are online with a Network, begin building your connections by finding your current customers. Each network provides tools to do this. Then look for niches. If you already do a lot of construction business. Look for associations and prospects in those niches and reach out to them. Look for lead sources, for example in Personal Lines, you currently get a lot of leads for realtors and mortgage people. Find them and connect.

Engage & Be Useful. Once who find your people begin engaging with them. Notice what they are talking about and join the conversation. Share content that useful to your customers. Be a resource.

There are tools that can you automate and become more effective with the five steps above, but when first jumping into the social media pool don’t overcomplicate it with shiny gear, just learn to swim.

You can do this, and it will help you dominate your own local market even in the face of marketing giants.

Be Productive,

Theron

this was originally posted on the Grow Program site

 

Tales of An Insurance Startup

Have you ever thought of starting a scratch insurance agency? Maybe you are on the edge of doing something, but fearful of taking the leap. Maybe you are an established agency, but could be invigorated by new ideas.

Here’s the story of someone who did it.

Matthew Carroll, began working in the insurance industry 6 years ago as a producer inside an Independent Agency. During that time, he learned a lot about lead generation and structuring follow ups for sales success. After a couple years, a State Farm agency reached out to him to become a producer inside an agency. He jumped at the chance, because it came with the hope of actually owning his own agency one day.

His tenure there was successful, but did not lead him to ownership as quickly as he imagined. So after 3 years of grinding away at production, Matthew took the leap and opened his own shop.

Granted this was no overnight leap in the dark. In fact, we spoke at least 6months before he pulled the trigger. He gathered all the necessary information he needed to make good decisions. He put together one of the best business plans that I had ever seen. Production targets were in place, as well as the marketing activities needed to get there. Then in Jan of 2017, he launched Kentucky Bred Insurance.

www.kybredinsurance.com

Matt came storming out of the gate, and was writing business and following his marketing plan from day one.

After 9 months, his growth has been steady and impressive. However, like any venture it has not been perfect and there have been a couple bumps along the way.

Recently, I sat down with him, and asked him about his first 9 months. Here’s what Matt has learned.

What things about starting and running the agency have been harder than you expected?

MC: The tension between looking at my goals to stay motivated, and remembering to do the day to day activities that will hit the goal. As things get hard, I have to look at the end goal to keep going, but it is really easy for me to fall into daydreaming about success, and forgetting to make my sales calls and marketing contacts. Yet, if I didn’t have those dreams the daily activities would grind on me.

Related to this is sticking to the activities I had set up in my business plan. There are times when the busy working of the agency takes over, and I don’t make time for the activities that will keep my pipeline full of leads.

Also, riding the wave of work/life balance. I’ve gone overboard in both directions.

Knowing where to spend marketing dollars had been really hard. Running quick calculations for return on investment isn’t difficult, but many of the activities I might do won’t have immediate returns. So how do I calculate for that? For example, say I run multiple Facebook ads, and I drives leads to me. That’s easy to calculate, but then 3-6 months later, a couple more leads trickle in from the campaign. I don’t mind spending money on activities that generate business, but because of the slow-acting nature of some marketing, it is really hard to make those decisions.

As I think about the future, and I realize that I need to start making hires. Planning for this has been harder than expected. Knowing which activities, I need someone to do, plus find them is becoming a challenge as I start looking.

What was much easier than you expected?

MC: Generating referrals has been much easier. In my other jobs as a producer, I would talk with family and friends and some would give me a shot at their business, but most wouldn’t. I don’t know what flipped when I started my own business, but I am getting more “yes’s” when I ask. Also I have had more people I know reach out to me to help them. I am not sure if it because they know I am the owner, and this isn’t some short-term job. Maybe my approach has changed because I have more confidence and urgency to sell as an owner.

A big surprise has been the amount of support I have gotten from other independent agents. There are several across the country that I talk with regularly, and they have been incredibly encouraging as well as very open about strategies and tactics inside the agency. My previous experience as a producer inside an agency was that everyone kept things close to the vest, and afraid of giving away their trade secrets.

What would you have done different?

MC: I would have been more aggressive at developing more and deeper relationships with influencers that are sources of business. At this point, I am doing more of that, but I relied so much on the low-hanging fruit of friends and family in the beginning, I didn’t work as hard on getting those lead sources in place.

What didn’t you know that you wish you had?

MC: I had no idea about the power of social media, especially Facebook, and its ability to generate business. Also how important content creation to drive business has surprised me. I am working on changing that and looking to outsource some of those activities.

Last question, what do you wish your companies would have done for you early on?

MC: In the captive world, companies do a much better job launching an agency. In my State Farm experience, there is a lot of marketing money given up front. Sometimes up to 50k, with other dollars trickling in to do marketing. Anything from a marketing side would have been nice. It could have been tents or banners for networking events, or even small amounts to help with lead generation.

Overall, I am happy about my decision, but not there is still a lot to do because I start realizing those daydreams.

Thanks, Matt!  To contact Matt go to his agency site, FB page, or LinkedIn account.

If you’ve done an insurance startup, do you have any advice for Matt? Leave your comments below:

Don’t Trust the Black Box

Don’t Trust the Black box!

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You know what I mean.  The secret sauce insurance companies cook up to rate and price their products.  The secret tiers, the magic variables, the rating alchemy.  No one but the initiated traveling the path of Ivy League MBAs and Actuarial Secret Societies have gazed upon these models.
In the early 2000s, these pricing models, especially in auto, came into vogue.  No one was more successful at developing these sophisticated systems than Progressive.  And they worked.  Profits rolled in, and the rest of the industry was quick to follow.
Multivariate pricing was the name of the game.  Identify as many variables that could reliably be used to identify a customer, and price on each of these factors.  None of these would have been possible before the advent of sophisticated desktop computer power.  It could never have happened in the days of manual rating.  I remember back in my Progressive days when these models were first being launched, one particular DOI (I think VA) questioned the accuracy of the rating.  They actually asked someone from the company to come to the DOI and demonstrate the ability to manually rate several policies.  Because the rating was done through computer algorithms, and not real people, the company had to find someone with a math degree to demonstrate the problem to the DOI.  In my mind’s eye, I imagine a disheveled college professor spending hours calculating on a giant blackboard, filling it with numbers, square roots, squiggles, and Greek letters.
photo credit: nhighberg via photopin (license)
Credit was the backbone of this type of rating.  This upset and confused many agents and regulators.  Customers were mystified.  But as time went on, it proved itself a predictor of loss and behavior.
 It’s probably been 15+ years since the industry has been unprofitable in auto. Several years ago, I caught myself saying, “Auto profitability is reliable.  The only thing we really have to worry about anymore is property, and that is only because of weather.”  Then 2016 hit.  No one made money.  The big dog of insurance, State Farm, lost $30 Million in auto.
What happened?
Industry experts tell us it is multiple things: cost of repair, increased cars on the roads, distracted driving.
I’d put my money on distracted driving. Credit underwriting and multivariate pricing models struggle to identify this risk.
Unfortunately, this is not only impacting company profitable and increasing pricing for your customers, it is impacting your ability to generate profit-sharing and contingency dollars.  If it continues, it could even jeopardize contracts inside your agency.
What to do?
1.  Trust but Verify.  You remember Ronald Reagan, and his relationship with the Soviets.  In his negotations, he often said he trusted them, but verified their statements on the back end, just to be sure.  This has to be an agent’s attitude toward the pricing black box.  Trust it but verify it.  Carriers claim they can price for everything and have a price for every risk. Use it but don’t rely on it.  Don’t rely on them to DNR customers that become serial claimants.  You need to step in and ask for that non-renewal.  Resources are thinner at companies than they used to be, and humans aren’t monitoring individual accounts.  I’ve done this exercise with agents and have found examples of a customer with multiple claims (11) continuing to renew year after year, and continuing to cost everyone money.  Review your books of business with your carriers and take action.

2.  Oldschool Underwrite.  You know how to do this, but if you have staff that has come into your agency since 2005, they may not.  Even if a company advertises, “Price for every risk” or “Let the system do the underwriting”, don’t!  Have everyone ask 2 questions for every new customer:

“Will this customer make our agency and companies money long-term?” and “Will this customer attract good or bad business?”  

You might have to sit down and actually explain what good business looks like to some staff.  We’ve all become so reliant on the rating system to determine profitable customers. The mantra has become “If it takes it, we write it.”

Unprofitable books don’t help anyone, and the industry loses in the process.
It’s time to go back to basics.  Trust the tools, but don’t rely on the black box to make you money.

Why You Don’t Want Treat All Customers Equally

After weeks of studying customer service studies and talking with agents about their best practices, I stumbled upon an article in Sales & Marketing Management titled “Delighting Customers Doesn’t Pay”.  The basic premise is that customer satisfaction doesn’t always correlate with customer loyalty, and as business people we can give the concept of delighting customer an inordinate amount of energy.  

This seems to be slightly disturbing.bad customer service

Anyone who has spent time in the sales and service business often live by the phrase the customer is always right, but is he?  Is there a time you want to nix customer service? Is something else more important that trying to delight every person that comes in contact with your business.

It pays to know your customer and know yourself.

Think about Wal-Mart vs. Nordstrom.  Stories abound about Nordstrom going above and beyond in the pursuit of delighting their customers.  On the other hand, you have Wal-Mart, and rarely do you feel delight when leaving their stores.  Yet both are extremely successful around what they do.

The difference is that they know their customer and know themselves.  Wal-Mart’s goal is to bring products to consumers at the cheapest possible prices or in their words: “Saving people money so they can live better”.  Having a good experience in their stores is defined by paying less than you would at other businesses.

Nordstorm’s goal is to bring high quality products to customers creating an experience of luxury and excellence.

The key to both these businesses is knowing who they are, and part of the way you know that is by defining your target market.  We have discussed this before.  This can be difficult to determine but it becomes part of what defines you as a business and a brand in your community.

Have you done this?  Do you know what your ideal customer looks like?

If you are having trouble defining who that customer is, go negative.

Make a list of people you don’t like doing business with or who you don’t want to do business with.  You will soon find that you are narrowing the scope of your customer really quickly, but will often find that there are people in that list that are making it into your business and frustrating you and your staff.  It is time to put some stop signs in place against those you define as customer vampires draining the life from your agency.

Here’s a tool that I picked up from Michael Hyatt’s site:

customer service

This chart will begin to help you refine who your ideal customers are, allowing you to create action steps around each type, so that you can provide appropriate levels of delight and service.

Let’s take each one from the lowest priority to the highest.

Priority 4:  Low Profit/High Maintenance.  These are your dogs.  In our world of insurance, these are the people who generate the least amount of revenue for you, but create an awful lot of work.  They are never happy.  They call with billing questions constantly.  They are forever making changes to their policies, and in return offer very little back.  In the trade for value, you give way more value than they do.

Priority 3:   High Profit/High Maintenance.  These may really be the vampires inside your business.  They generate a higher amount of revenue for you, but they are hard to deal with, and drive your staff crazy. You secretly think about dumping them as a client, but the benefits they bring keep you holding on, suffering whatever abuse they continue to inflict upon you.  You remember the friend with the bad girlfriend (or boyfriend) they kept around for the status and benefits, but everyone was screaming: “Dump them!”

This one is very hard, but it is worth making a list of these folks and the value they bring to your business.  You may not let them all go, but force yourself to determine whether the abuse they offer is really worth the value you receive from them.

Priority 2:  Low Profit/Low Maintenance.  This customer doesn’t generate a lot of value for the agency, but they are so easy to work with and create very little friction in the office that you are willing to write this type of customer all day long.  Even though they don’t pay much, a lot of them become valuable because they create so little work for you.

Priority 1:  High Profit/Low Maintenance.  This customer has a high return on investment.  They generate a greater than average revenue per customer, are happy, pleasant, and create very little work with your staff.  They send referrals and never get petty or bog the office down with weird policy or billing questions.

How Do Implement This in Your Business?

  • Evaluate Current Book:  You have already been doing this.  As you have been reading through the list of priority customers, I guarantee that certain people have been coming to mind, and several you may have thought about dumping.  I bet your staff could do the same thing very quickly.

Determine what your average revenue per customer is.  Don’t get to complicated here.  Your management system can tell you average premium per customer, just use that rather than trying to parse out the individual commission rates per client.  If you can do that great, but it won’t dramatically impact your end list.

Who is below average and who is above it?  Who is in the top quarter?  Who is in the bottom?

Now you know the high and low profit customers.  Go through each one and determine who are the high and low maintenance customers.  This may be a job for your staff.  They interact with them the most, and if there is abuse, they probably take it.  

  • Create a Customer profile:  You will soon notice patterns and qualities.  Start listing out the characteristics that fits those buckets in your agency.  What does a Priority 1, 2, 3, & 4 look like in your agency.
  • Create Pre-Qualifying Strategies:  Now that you know what to look for, craft a list of pre-qualifying markers and questions to help you determine what bucket a customer fits into.  If during your initial interview with the customer, you see they are 3’s or 4’s, you begin to pass and send them down the road.
  • Align Your Sales & Marketing:  Ultimately, this will help with sales and marketing.  You have become really clear on the customers you want.  Now you can target your marketing to them.  You can learn what they like and don’t and where they are then intentionally begin building your agency with customers that fit you and your goals.

Songwriter Ed Sheeran said, “I can’t tell you the key to success, but the key to failure is trying to please everyone.”

Or simply, like your mama said, “You can’t please everybody all the time.”, BUT you can choose who you want to please and build your agency around that.

Be Productive,

Theron Mathis

photo credit: libraryman via photopin cc

Can You Measure Customer Service?

measure customer serviceYou have defined what good service is for your agency. You spent the time cranking out a service statement that all your people understand. The owners know it, the sales people know it, the service staff knows it, even the bookkeeper knows it. You plastered it on everyone’s desk, the break room, and the bathroom stalls. It is your mantra.

Weeks go by and you are beginning to wonder if anyone remembers your service pep rally. Are the slogans and statements shadows in people’s memory? Everyone signed onto your ideas, the staff helped you craft the philosophy, but how do you keep everyone on track with it?

You don’t want your service philosophy to become background static in everyone’s work lives.

Is there anything you can do to track your service activity and whether it is effective and reaching the goals you have set for your agency?

I think you can. In fact, I have seen it done.  Here’s three simple ways to measure customer service.

1. Metrics.   Are there numbers you can look at to see what is happening in the service department? Yes. There are two specific metrics your management systems should be able to tell you.

Retention. If retention is dropping, something is happening from the service side of the house. Yes, there could be other reasons such as company pricing or new stringent underwriting guidelines, but if you see this drop then it should be an indicator that something is going and customers are not happy.

Make sure you track this on a rolling twelve month basis, and track policies not written premium. Written premium can be deceptive because of rate activity, but you can not hide behind lost policies. If grabbing retention data is hard, the next best thing is to track cancelled policies. This one is simple and can be done monthly.

Referrals. If people are sending you customers, then something in your office is working. Now granted you may have great pricing, but I bet your people skills have more to do with it. You have a created a great experience for someone and they want to share it with a friend. Finding someway to begin tracking customer referrals. Most management systems have a “source” field that you can track where business is coming from.

[warning: for numbers geeks] Here’s a metric, I learned years ago that really helps with trend. Line graphing helps, but this one is tricky and can be revealing. It’s called the 3 vs. 12. Take the last rolling 3 months and compare to the last rolling 12 months. The percentage of change will eliminate anomaly months, and levels things out so you don’t start panicking if you have a bad month. [Analytic talk complete]

2. Mystery Shopping. You may bristle a little when you hear this. You may even worry that this will turn you into some crazed micro-manager with an office full of people whispering “service nazi” behind your back. Don’t worry. This doesn’t have to be crazy, but I promise it works.

Contact friends or customers and ask them to call in requesting a potential change to their policy. School them on questions and what to look for. For example, mystery customer #1 calls because they are looking at a new Honda Odyssey and wants to know what it will do to rate, and do they really need rental and what is that loan/lease gap coverage the car dealer mentioned. Mystery Customer #2 calls because they are considering an umbrella, but doesn’t really know what it is and how it works. These are simple things to do. Let your people know that you are doing them.

3. Surveys. Over the years, how many surveys have you mailed out to customers? How many did you get back? Probably not many, and if you got anything back it was only from the angry customers. This makes it look like you have big problems, because you don’t hear from the good ones.

Put yourself in their shoes. Do you like surveys? Be honest, don’t you just look at the 1-10 scale and check 8’s or 9’s on everything, if you do it all.

Use email surveys. You can create free surveys online at surveymonkey.com. If you search in Google you can find other options as well. Limit the survey to 3 questions. Make sure at least one question is open-ended and doesn’t generate a one word answer. Try to make them creative and occasionally ask about other places they get good service, so you get a sense of what they expect and what they like. This will let you tweak your own processes to exceed customer expectations.

Here are some sample questions: Would you refer your friends to us? Are answers to your questions clear and helpful? What drives you crazy about dealing with service people?

So what do you think? If you are serious about taking your service to the next level, measuring it is really the only way you can enforce and improve your standards.

Measuring service activity will keep your service standards from becoming a nice platitude. It will make it real and tangible in your office.

Are there other ways, you have measured your service performance?

Be Productive,

Theron Mathis

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