Benefits trump price 

People buy solutions, not products.  The old straw used as an example involves the store that sells drills.  People don’t really buy drills.  They buy holes.  They want a hole in a particular place and of a particular size. 

What about home and auto and business insurance; what are people buying?  They are buying a consulting service (you) and a promise (the contract).  Both are intangibles that need to be tangibilized in order for a customer to make a decision on which agent to do business with. 

If customers cannot see your expertise, cannot touch your knowledge, cannot hear your experience, it may be difficult for them to make a decision in your favor. How can they know the value of your service? 

The value of your service lies within you and your people.  You need to market “what customers get for what they pay” in every deed and every promotion that takes place in your agency. 

Performance builds value 

From prompt and friendly answering of the phone and e-mails to concise explanations of coverage features and benefits to annual reviews to excellent claims handling…performance is key. 

But you also need to keep reminding prospects and customers about how good you are.  Do it through newsletters; testimonials in your brochures and at your Web site; reminders that a high percentage of your new customers come from referrals. 

Let customers know how much you care 

Our view is: customers don’t care how much you know until they know how much you care. 

Make sure you offer annual reviews with an eye toward making sure that your customers are properly insured.  Send birthday and congratulatory notes. Make Howdy Calls---simply stated, “how are you doing, how are we doing, anything we can do to help.”  

Participate in the community, actively and with sponsorships of worthy programs.  Pay special attention to young people---sons and daughters of your customers, and kids who are doing positive things in town. 

Marketing takes place in every corner of your agency 

From your receptionist to CSRs to your most successful producer, marketing things are taking place every day, every minute in your agency.  Customer contacts are being made. 

Let everyone know how much you value quality and how you define quality performance in the agency.   

Let everyone know that they are empowered to “go outside the lines” to satisfy good customers and that their decisions will be supported.   

Constantly practice catching people doing something right and recognize the deeds specifically.

Discover your uniqueness 

Why should homeowners, drivers and businesses choose your agency over your competitors?  What makes your agency stand out?  How do you communicate your uniqueness? Here are some ways to find out what your distinctive position in your marketplace is. 

. Positioning questions to ask yourself 

If a prospect could only remember ONE thing about your agency, what would you like that one thing to be? 

What specific UBPs (Unique Buying Propositions) distinguish you from your competitors?  Customer service?  Special product benefits? Trusted Choice agency? History? Continuity of service to generations of customers?  Or??? 

. List FIVE ADJECTIVES which best describe your agency.   

Now, write down the significance of each.  Give an example of how this significance affects customers. 

. Involve your employees 

Ask them the same Positioning questions you asked yourself.  Match them with your answers.  What are the common denominators? 

. Involve you customers 

Interview 25 customers. Ask them to list FIVE ADJECTIVES that they think best describe your agency and your services. Match them with your adjectives and your employees’ adjectives.  What do you discover? Ask the interviewees why they came to your agency in the beginning and why they stay.  Carefully record their verbatims.  Analyze them.  Are there common denominators? 

. Check out your competitors 

Carefully study and analyze what other local agents are saying in their sales literature, advertising, and direct mailings.  How are they positioning themselves?  How can you out-position them?

. Putting it all together and using it 

Will it take some thought and time to accomplish the objectives we listed?  Sure.  Will it be worth it.  Our experience with our independent agent clients indicates it will.   

You will discover some surprises.  What you feel is an important difference may not jive up with what your employees and customers see. 

When you melt it all down, you will come out with specific differentiations that you can use in your sales literature, in sales presentations, in direct mailings, and in your local ads. 

And you will be able to develop a Positioning Line that conveys your advantage in six or less words! 

One voice benefit 

In the long run, one of the most valuable benefits that will come out of this introspective look at your agency differentiation is: everyone in the agency will be firmly aboard. 

Every one will know what specials benefits lead to sales and service success.  

COMMENT:  Most independent agents have never gone through this exercise.  They tend to use glittering generalities and insurance clichés in their marketing communications programs.  You’ll gain a distinct competitive advantage.    

Appeal to customer emotions in your advertising 

One of the axioms I learned early in the marcom game was that people buy emotionally and describe their buys rationally!   In 1956, direct marketing guru Victor Schwab (as far as I know, he is no relation to Charles) developed a comprehensive list of what consumers want.   He organized the list in these categories:  

. People want to gain:

. They want to save:

. They want to be:

. They want to do: 

Here are a few “emotional drivers”, as Schwab called them, in two of the categories that insurance agents should definitely consider when putting together direct mail, ads, sales presentations and handling customer service inquiries. And, when developing their agency staffs. (To view the entire list, visit http://tinyurl.com/yq8m3q.)

Maybe you need a stay in touch program

 The October 2007 issue of Target Market magazine (www.targetmarketing.com) has an article “Why Customers Leave…And five ideas for turning them back” by Arthur Middleton Hughes.  It is worth checking out.  Here are some excerpts and thoughts about how they apply to insurance marketing. 

Hughes cites Paul Wang, associate professor of integrated marketing communications at Northwestern University.  Wang points out there are, in general, two types of customers: transaction buyers and relationship buyers. 

A transaction buyer is someone who is interested only in price.  These buyers have no loyalty. They will spend hours comparing products before they buy. They will leave you for a tiny difference in price no matter what kind of special services you offer them. 

A relationship buyer looks for a supplier they can trust.  They are seeking friendly companies with reliable products---people who recognize them, remember them, do favors for them, who build a relationship with them. 

The article cites four reasons why relationship customers may leave a company.  The most common reason is: They are unhappy with the way they are treated. Yet most organzations focus on another reason (They are unhappy with the price), and try to retain relationship customers with discount offers and other price-directed incentives. What should they concentrate instead? Read on. 

Memorize AIDA acronym 

Denny Hatch’s online newsletter (www.businesscommonsense.com) and column in TARGET magazine always contain direct marketing gems.  I just visited and was reminded of AIDA.  As Denny puts it: “In Direct Marketing 101, beginning students learn the basic steps needed to persuade a prospect to become a customer.  This inviolable rule applies to direct mail, off-the-page-advertising, DRTV and radio, and the Internet.  It all comes down to the acronym, AIDA.”

Attention

Interest

Decision

Action 

Hatch goes on to say that general advertising fails and direct response and mail and Web pages succeed involves the ACTION phase.  What are some of the ACTION devices you can use?

Means to an end 

I was going my regular morning routine of trying to solve the Boston Globe crossword puzzle today.  4-Down asked for a six-letter word for “means to an end.” Take a stab.  Got it?  No?  Clue:  word begins with T and ends with C. 

Yes, T-A-C-T-I-C.  

When we partner with independent agents on marketing communications and MAP (Marketing Action Plan) programs, Tactics are a critical element, of course.  Here are all the elements in order of their position in the planning process. 

. Objective

. Strategy

. Tactics

.  Budget

.  Measurement 

Tactics are specific activities that the agency will use to achieve an end result (Objective).  Here’s a simple model for how each step is stated in a plan. 

Objective: To obtain minimum 100 referrals during the month of April. 

Strategy: Encourage our A customers to submit referrals. 

Tactics:  

.  Direct mail 500 A-type customers on March 1; package to include: a personal letter, our new agency brochure, business card, and postage-paid business reply card with fold-over so that submitted names are not revealed. 

. Do follow up telephone calls on selected basis to non-repliers the last week of March. 

Budget:  Allocate $1.50 per mailing ($750.00);  cost-per-referral (based on 100 minimum goal: $7.50. 

Measurement:   

.  Number of referrals

.  Cost per referral 

NEXT STEP:  Referral Contact Program for X-Dates, Quotes, Sales