All customers are not created equal 

Every paying policyholder deserves the best service you can give them. 

But that doesn’t mean that every policyholder deserves to have you as his or her agent. Or that every policyholder is equally beneficial for the agency. 

Every agency has: some customers who are not pleasant to do business with; some who are always on the phone with unwarranted complaints; some who constantly put agency staff members “threw the hoops”, and require an excessive amount of hand-holding time. 

There is a name for those types of policyholders.  They are called Y customers:  “Why are we doing business with them?”  It makes good business sense to develop ways to encourage Y customers to insure with a direct writer!   

This is an important strategy.  It is a matter of fairness.  The Y’s  are unfairly taking up valuable time that your staff can use to care for your best customers, your A and B customers, and for new customers who join the agency. 

There’s another benefit.  I’m betting you will see a spike in office morale, especially among your CSRs.  

Your CSRs are the key 

Many of our clients have identified their policyholders as A, B, C  and Y customers. What are the criteria for each category?  

There is no set of rules. Each agency sets its own criteria for each category. Types of criterion are: full account activity, longevity with the agency, value of the account, potential growth of account income, ease of doing business, referral activity, testimonial givers, payment record…and more. 

Generally speaking, our agency clients view C’s as customers who are price-driven, and likely to have a short retention span. But that’s not the only criterion. 

What about identifying other C's and the Y’s (Why are we doing business with them!)?  Ask your CSRs.  If you ask them to name customers who they have difficulty servicing, they will give you specific names!   

Chances are, your CSRs have identified the least profitable C’s and the unprofitable Y’s---customers you may want to encourage to leave. 

J.C. Penney traffic report 

Independent agents can take a leaf out of J.C. Penney’s “Know Before You Go Program” (as reported on in the Andrea Syverson’s GRAND MATTERS column, Target Marketing). 

She quotes J.C. Penney Direct president John Irvin: “Our shoppers are more frequently using the Internet before ever shopping in a store. We’ve done extensive research that shows that nearly 70 percent of customers are online for a purpose other than shopping, including viewing merchandise, comparing prices, finding sales promotions and exploring fashion and shopping tips.” 

Here’s how the “Know Before You Go” works 

Syverson’s report points out that, J.C. Penney gives customers “detailed and updated information” that they can use BEFORE they get in the car and visit a store.  Go to www.jcpenney.com and shop for a pair of shoes.  You can virtually “try them on” before you decide to actually try them on at your local Penney’s.  You click on the style that appeals to you, and then select the color and size.  Under “check on the availability at stores near you,” plug in your Zip code and up pops a box telling you where you can find the exact item in a store nearest you. 

Sure, insurance is a different from a retail apparel store.  BUT, when you stop to think about it, there are more similarities than differences.  

. You are a local retailer of products.

. You are able to showcase your products (in brochures, online).

. You could publish a catalog (online, in print). 

. Your customers want empathy and service.

. Your customers want time-saving convenience.

. Your customers want helpful information.

. Your customers want your professional advice. 

And, more and more insurance buyers, especially younger buyers, are getting their information from the Internet.  They ARE searching insurance agent sites BEFORE they make a decision to contact you---or a competitor. 

Now, pull up your Web site  

Do you have “detailed and updated information” that customers can use BEFORE they call you or drop by your agency office?  

Can the customer “try on” the product they are interested in?  How might you provide ways for them to do so?  How can you make the experience highly visual and interesting? 

Can the customer find your office location easily with directions to get there? Can the customer virtually “visit” your office and staff members? 

Build it, promote it--more will come! 

The more interactive and visually appealing your online office is, the higher the number of prospects and customers who will come and window-shop  BEFORE they give you a call or come by your land agency.  

Resource:  Andrea Syverson’s column: www.targetmarketingmag.co

How important is your agency brand? 

Very important!  Your brand is your personality.  It is like a reputation for a person. What is your agency’s reputation?  How have you earned it over the years?   

Now conduct some simple tests. Jot down adjectives that you feel describe your agency beliefs and performance.  Ask your employees to do the same thing.  What are the common denominators?  Next, take a look at your sales literature.  Do your brochures, print ads, direct mail letters, television and radio spots reflect these personality traits? 

Most importantly, ask 25-or-so customers why they became your customers and why they stay.  What do they say?  Do their comments match up with what you believe your brand personality is? 

Finally, ask yourself: what unforgettable experience do we create for our customers?  How do we distinguish ourselves from the “thundering herd” of insurance agents out there?  Creating an “unforgettable experience” for your customers is a major key to growth.  It fosters referrals, it promotes positive word of mouth advertising (the best kind), and it becomes a focal point for your sales promotions.  

How do you know your ads are working?  

We get this question frequently.  The old straw among corporate advertisers used to be: “I know 50% of my advertising dollars are wasted, but I don’t which 50%!” 

The new straw involves some sophisticated (read “expensive”) print, TV and Web measurement tactics used by major advertisers.  But what about the little guy?  What about your agency? 

The Number One objective of advertising 

Insurance agency advertising has one job that it can do---build favorable awareness of your name and services. Period.   

Any direct leads your advertising generates should be viewed as bonuses.  And too often, these bonus leads represent “adverse selection”.  That is to say, customers who are “C” and “Y” (“Why are we doing business with these people?”) customers. 

So, how do you measure “awareness” gains? 

The formal way is to establish a BENCHMARK before you start your next advertising campaign.  Conduct a simple mail survey.  The goal?  To find out what percentage of respondents can identify your name and to compare that figure with what percentage can identify the names of your local competitors.   

At the close of your advertising campaign, repeat the BENCHMARK SURVEY.Has your campaign increased your name recognition?  How much? 

We recommend a formal measurement system. And we recommend that it be combined with an informal measurement system:  How often do people mention your campaign? When you ask new customers how they heard about you, what do they say?  When you ask clients if they have seen your ads, what do they say?   

There are 5 key elements to a sound marcom plan 

(1) Communication Objectives 

(2) Message and Positioning Strategies

 (3) Specific Actions (Tactics) 

(4) Measurement Procedures 

(5) Budget 

NOTE: Marketing communications plans are restricted to the things that communication can accomplish for your agency.  Like: increase favorable awareness of your agency name or produce direct responses for sales follow up. Never confuse communications objectives, strategies and tactics with sales objectives, strategies and tactics. 

About each element 

Communication Objectives: State the WHAT you want to accomplish in a quantitative, measurable way: “Obtain 100 qualified new customer leads for BOPs from June to November 1.” 

Communication Strategies:  State HOW you plan to attain the objectives: “Promote ABC Agency as the leader in Main Street BOP services offering a valuable Your Business Analysis that helps match needs with the right coverages.” 

Communication Tactics: State the SPECIFIC ACTIONS required.   

(1) ”Direct mail prospect list of 500 local businesses every month from June to October 31 with Jumbo Postcards that deliver basic message “it pays to call ABC Agency for a Second Opinion before you renew…you could cut your insurance costs dramatically. Include 800-telephone number and e-mail address calls to action asking prospects to give us their X-Dates.”  

(2) Make minimum 20 producer X-Dating calls a week to non-repliers. 

(3) Send quarterly agency business newsletter to entire prospect list starting with February issue. 

(4) Producer calls on current agency BOP customers for referrals;  minimum of 10 calls per producer each week from March 1 to June 30. 

Communications Measurement:  Explains how the program will be evaluated against directly against its objectives: “How many BOP X-Dates did we get for sales follow up by our producers?”  “How many came from our direct mail campaign?”  “How many from newsletter mailings?”  “How many from referral calls on current BOP customers?” 

NOTE: While it won’t be perfect, you should have a “lead capture” business process in your agency.  When a suspect or prospect contact is made at the agency (by mail, telephone, walk-in, e-mail) ALWAYS make sure the agency associate asks, “How did you hear about our agency?” 

 Communications Budgeting:  Simply explains COST OF EACH TACTIC.  Budget figures are the costs of achieving pre-determined communications goals. 

Only two basic objectives for your marcom plan 

In nearly all insurance marketing communications, programs can achieve only two basic objectives:  (1) those that change a target market awareness of your agency from one SPECIFIC LEVEL to another in a SPECIFIC TIME PERIOD; (2) those that produce a SET NUMBER of qualified sales leads in a SPECIFIC TIME PERIOD. 

Make sure your objectives are stated in measurable terms.  For example, an awareness objective should read like this:  “To increase awareness of ABC Agency as a full service insurance agency from X% to Y% in Z months.” An inquiry objective should read: “Obtain X inquiries from target market prospects from June 1 to October 31.”  

Professional, business-like approach 

A well-developed, well-written marketing communications plan is an integral part of your annual business plan.  It supports your sales goals and sales producers. It introduces accountability to advertising, sales promotion, direct mail, Web and other communication vehicles. Adopt the approach we are suggesting and you will be able to sit down at the end of the year knowing, with remarkable precision, what results your marcom investment produced!