Insurance Agent Web Power

As a follow on to the post on The Future of Independent Insurance Agent in Personal Lines, though this post is applicable to all lines of insurance and insurance agency customers..

I recently was contacted by one of Confluency’s client agencies who was concerned that their satisfaction ratings were lower than average.  A prospect/client survey report card is included as part of our website admin so some data is provided to all agents after a website service or quote request.  In this case, the ratings were low across the board:  timeliness of response, satisfaction with explanations and information, etc.  But the real vote of confidence is in this question:  Would you be comfortable referring a friend or family member to us for their insurance needs?  Clients who provide referrals, as well as those that don’t, are voting with their feet, so to speak.  Most of the rest of the questions have to do with why clients are happy or unhappy  - learning about that gives you an opportunity to influence future survey results (and ultimately, retention, account sales and referrals).

So if you ask your clients if they are satisfied that you have explained insurance coverage and options adequately and a disproportionate number answer ‘no’, then you obviously need to spend a little more time with each client.  Spending time with clients is a real key to happiness.  Let me digress a little and share information from the medical world.  A few years ago, a medical malpractice insurer correlated malpractice lawsuits with the amount of time doctors spent with each patient.  Some doctors that spent, on average, just a couple more minutes with each patient.  And those doctors were sued a lot less often than doctors who hurried on to the next patient.  It’s harder to sue someone you like and you are more prone to ‘like’ a doctor who actually spends a minute or two talking and listening to you.  In the same way, clients who feel ‘loved’ by your insurance agency are far more disposed to ‘like’ you and are less inclined to shop their insurance elsewhere every time they experience a minor bump in the road.

In this context, love is synonymous with communication.  You can’t do a better job explaining insurance coverage and options to clients unless you spend just a little more time with them.  You can do that by being more efficient and taking advantage of every low-cost communication medium you possible can (i.e., your website, email and Facebook).  But even if you do that, insurance agency management will need to spend a little more time by taking a moment or two each month to communicate with all clients (newsletter, social media) and your CSRs and producers are going to have to spend just a bit more time with each client and prospect on the back end of every transaction.  Time is money, so at the end of the day, that means that the pot of gold used to pay salaries and bonuses will be a little smaller, at least at first.

Most insurance agencies are working at capacity – maybe your staff isn’t necessarily spending time as efficiently as you would like or maybe they aren’t choosing the tasks they spend time on wisely – but there is no doubt everyone is busy.  Something has to give.

What Kind of Communication Makes Insurance Consumers Happy?

Writer’s block is the bane of all authors, and that includes insurance agents who want to pen newsletters or post to Facebook or start a blog.  The first hurdle, coming up with a topic to write about, is often insurmountable.  Here’s a clue for insurance agencies, courtesy of a recent survey conducted by Siegle+Gale:  consumers find every single touch point in the insurance relationship to be complex.  And they are willing to pay more if the insurance experience can be simplified – the study suggests 5% – 6.5% more.

Survey Data from Siegle+Gale Global Brand Simplicity Index 2011

So take advantage of all the inexpensive and easy-to-use communication channels that are available to your agency and start to develop strategies to simplify insurance for your customers.  They will love you for it.  Just as important, they will be willing to pay a bit more for their insurance.

Your Agency and the Independent Agency Distribution System

For thirty-years now, pundits have been predicting the demise of the independent agency in personal lines.  It still  hasn’t happened.  Oh sure, there have been losses in market share over the last several decades, mostly to captive agency companies, but also some to the direct marketing companies.   But there are still plenty of insurance agencies making a good living producing personal lines.  Can it last?  I think so, but I’m betting that over the next 10 years there will be a far smaller number of agencies with the majority of their revenue coming from car and home insurance and those agencies that are 60% commercial today will be 75% – 80% commercial.  That means less income stability year-to-year for most agencies; personal lines, while not sexy, does’t exhibit the rate and underwriting capacity volatility that commercial insurance does.

But some agencies will continue to thrive in personal lines and I have a good idea which ones.  Here’s how to tell if your insurance agency is likely to be one of the personal lines survivors – just answer this question:  How many policies does your agency have per personal lines account?  Here are your possible answers:

1. I have no idea
2. about 1.5 policies
3. 3 or more policies

If you chose answer 1 or 2, and you don’t make some changes to your customer development programs (i.e., actually implement some customer development programs) then your agency has no future in personal lines.  If you chose answer 3 then you probably will continue to produce personal insurance business profitably.

What has really changed in 20 years?  A lot, yet in some respects, nothing.

I was at an industry conference in the fall of 2011, the keynote speaker was Risk Information’s Brian Sullivan.  As always, he delivered some thought provoking information in an engaging way.  During the Q and A, someone asked him what he thought about the future of personal lines for independent agents.  His answer, more-or-less, went like this:  Independent agents can continue to grow in personal lines but they have to do something to justify the extra cost of doing business (within the independent agency system).  The only way to do that profitably is to do more business with fewer clients.  Today, most agents don’t do anything extra and the average number of policies per personal lines account is 1.4.

Over 20 years ago, I spent time in a lot of insurance agencies, helping them analyze their marketing opportunities and one of the things I measured was the number of policies per personal lines account.  Guess what that number was.  If you guessed 1.4, you would be absolutely right.  The number hasn’t changed in over 20 years; the conclusion I would have to draw is that most agents, despite all the rich and inexpensive communication mediums available today, still don’t communicate regularly with their customers.  That is, there is no systematic communication process to capture more account sales, improve retention, and earn more referrals.  However, the agencies that have 3 or more policies per account are on their way, and for the most part, these agencies are using their website blog, Facebook, and email newsletters to build relationships with customers and reinforce their value proposition.

I have seen estimates of seven as the average number of ‘personal’ insurance polices held by the average person.  I can’t cite the source however, so instead, let’s think about policies a person should have in three groups:  Must Have, Should Have, Might Need…

Must Have (Bought Products)

• Car Insurance
• Home, Condo or Renters Insurance

So there’s two.  They are in the Must Have group because (with the exception of renters insurance) the state or the bank require most of us to have this kind of insurance.  These insurance policies are what I call ‘bought’ products, meaning you don’t have to create demand for them – people will shop for them and buy them because they have to.  Because of that, most insurance agents start their personal insurance relationships with one of these products.  Unfortunately, most agents also end their customer relationships with these products as well.

Should Have (Sold Products)

• Life Insurance
• Health Insurance
• Disability or Accident Insurance
• Critical Care Insurance
• Inland Marine (Valuable Articles)

I’m counting Inland Marine as a separate policy because it is often written on as a separate line from homeowner insurance.  Most people, even renters, have some personal property that is not adequately covered by unendorsed home, condo or renters insurance.  Yet how many property policies in your book-of -business include some inland marine policies?  Individuals may get basic life insurance through their employer as well as health and disability, but we all know that employee benefits have been slashed over the last several years and far fewer people have employer-provided coverage today.  Maybe your agency doesn’t write life, health or disability.  That’s a business decision and is certainly your call – but if that’s the case, instead of 5 more potential product relationships you are limited to one.  These policies are different than the Must Haves in that there is generally no government agency or financial institution telling people they have to buy one of these policies.  For that reason, I call these products ‘sold’ products; you have to create a demand through education and that requires customer communications.

Might Need (could be Must Have or Should Have)

• Boat Insurance
• Home Business
• ATV, RV
• Motorcycle
• Pet Insurance

There are more of these, of course, but these insurance policies are the most commonly needed.  Sometimes, as in the case of motorcycle insurance, the products are actually ‘bought’ products courtesy of the DMV licensing process; other times, individuals will finance a boat or RV and the bank will create demand for you.  Home business insurance and pet insurance are most always ‘sold’ products – you’ll have to do a little work.

So in short order we have a list of 12 fairly common personal insurance policies.  The average of 7 per person is starting to look very plausible.

Developing deep customer relationships in personal lines requires systematic communication.  That communication can be scheduled in advance – a newsletter, for instance.  That communication can be planned in advanced but developed ad hoc, as information becomes available – Facebook or blog posts, e.g.  But systematic communications should also be situational.  For instance, I recently filed two auto insurance claims.  In both cases, I contacted the insurance company claims department directly, because that’s what I was instructed to do.  The insurance company did a good job for me in both cases (of course, I haven’t seen my renewal premium yet).  I knew what to expect, was kept apprised of the process and settlement was speedy.  And the number of times my insurance agent checked in with me during either claim?  Zero.  If I were a cynical person, I might start to ask myself why I have an agent at all.  And when my renewal does come, and most likely with a premium increase, do you think I will hear from my insurance agent then?  Probably not.  It’s scenarios like this that predispose consumers to shop their insurance – and never tell their agent.  If I were to move my car insurance I would become a one policy account instead of two…and I’ll bet my agent’s policy per account ratio is 1.4.  Does he have a future in personal lines?  I’m dealing with anecdotal evidence here, but it doesn’t look like to me.

How about your insurance agency – do you have a future in personal lines?

Here’s what Wikipedia has to say about ecommerce, ‘… (it) consists of the buying and selling of products or services over electronic systems such as the Internet and other computer networks’.  They say a little more of course, and concede there is often a physical deliver component, but for the most part, the classic definition of ecommerce involves little more than circuits and networks.

The Seduction of Insurance Ecommerce

And the idea of ecom is alluring, how can it not be?  You set up a website, humans find it and enter information, get coverage and pricing information, and then enter payment information.  On the other end,  money comes out, straight into the pocket of the insurance provider.  And there’s flaw number one with insurance as ecommerce from an insurance agent’s perspective:  There is no role for the insurance agent in the foregoing scenario.  If insurance consultation and purchase could be conducted this way, why would anyone need an agent.  This view of insurance and ecommerce was pretty much the thinking in 1995 and it hasn’t come to pass yet.

Life Insurance and Auto Insurance for Basic Needs Consumers

That isn’t to say that some insurance sales have gone mostly online, term life and personal auto are two examples.  But even there, many consumers would be better served by involving a trusted adviser.  I sometimes ask agents how often coverage options on an original car insurance quote submission end up the issued policy limits.  The answer is almost never.  That’s because, even for basic auto insurance, consumers don’t understand how to determine coverage needs or the interplay between deductibles and other credits.  And while term life quote requests are easy to complete, not every company offers advantageous rates to consumers with health concerns or  a little long in the tooth.  A little experienced guidance would come in handy for many term life prospects.

A Shot in the Foot?

Advertising by term life insurance companies, and particularly advertising by the likes of direct marketing giant GEICO, lead people to believe they don’t need an agent.  And that mentality extends beyond just those two products.  Insurance agents have lots of opportunities now to participate in ecommerce through auto and home rating portals for comparative rateers, like EZLynx and Silver Plume, and company provided website widgets that allow website visitors to quote and buy online.  But if we just throw these on our websites indiscriminately aren’t we just reinforcing the message being pounded out by GEICO?  Are we shooting ourselves in the foot?

Internet Communication with a Sprinkle of Ecommerce

Most agents are local businesses and are no where close to fitting a traditional ecommerce model.  Most insurance agents can deliver benefits that can’t be matched by ecommerce alternatives but they need to make the case for agency value proposition and that’s where internet communication comes in.  Using email, the agency website, and social media agents have multiple low cost channels through which they can reach out to customers and prospects and communicate differentiate value propositions; but we need to actively communicate and those communications need to include a clear and advantageous alternative to quoting and buying online.

There is evidence that consumers want, and maybe even expect, to be able to get comparison pricing online.  So let them do it, but also let them know that going lone wolf may not yield the best combination of price, protection, claim paying ability and service, and convenience.  And let them know you have a good alternative – your insurance agency.

Businesses that have products or services to which consumers have a strong emotional attachment.  For instance, a friend of mine runs a business that markets reggae and Rastafarian themed clothing, posters, and other products.  All they have to do is post a song lyric or two to their Facebook page each day and poof! – over 1,000 ‘fans’ and multiple comments each day for each post.

Insurance is harder.  There are two times when the emotional attachment to insurance is strong: 1)  When someone’s premium increases or coverage gets canceled, or: 2) After receiving fast and complete indemnification after a claim*.  Those attachments are at opposite ends of the spectrum – so what’s in the middle?  What is the fodder for those daily Facebook posts  – the song lyrics of insurance, if you like?

I was going to use this blog post to offer up some suggestions, but PC World beat me to it.  Here’s an excerpt from their July article, Secrets to Using Facebook to Market Your Business:

Customers want to be informed and engaged, not pitched and harassed. It’s OK to tie in your products and services where they’re relevant, but don’t simply use the Facebook page as a platform for marketing soundbites.

You can post news or stories related to your business and provide unique commentary or insight. You can also use the Facebook page to provide tips, tricks, or information content. Rather than just talking at the audience, though, try to incite comments and feedback from the members to foster a sense of community with the customers.

*OK, so there are lots of other negative emotional attachments to insurance:  I don’t understand my policy paperwork, or bill; I can’t get anyone to respond to my questions, etc.  In the Yin-Yang philosophy of life and business, each of the negative emotional attachments can also be turned to positive experiences.

Something Old, Something New

I talk to a lot of insurance agents.  Some are happy with their sales and profit growth, most aren’t.  That’s one thing most agencies have in common.  Some have little free cash to invest in marketing programs, some have literally invested over $100,000 in what they believe to be state-of-the-art marketing systems.  Even these agencies have something in common.  Almost none of them are engaging in the four basic tactics that cost almost nothing and deliver demonstrable sales results.  Two of the tactics are as old as dirt and two of them wouldn’t exist without the internet.  As much as anything, I think that shows that the insurance agent who achieves top quartile growth combines a little of the old with the new.

The New

Local Search

Almost all insurance shoppers turn to the internet at some point during their research and purchase process.  And increasingly they are presented with a short list of local businesses next to a map.  Informal research conducted by Confluency Solutions indicates that 80% of all insurance agents have not claimed their local listing with Google Places, Bing Local, or Yahoo Local.  Claiming and enhancing your agency’s business listing is free and takes little time.  That’s why every agent who cares about sales growth needs to manage their visibility in local search.

Email Marketing

Email marketing has been with us for so long that it hardly seems new but it was not possible without the internet.  Spam abuse has brought us tightened regulations (CAN-SPAM) and tightened email filters to keep out unwanted email.  Many agencies use email abuses as a rationale for not collecting and using email addresses.  But, as the Marketing Sherpa chart below shows, those businesses that use email marketing, have *not* seen diminishing returns over the last three years.

There are lots of techniques for gathering email addresses and obtaining permission to send out emails but the best place to start is with your customers and current prospects.  Intelligent email communications to the first group improves retention, account sales, and referrals.  Emails to the second group can introduce additional product (sales), expand your insurance agency value proposition, and maximize sales conversions.  And emailing to either group will have almost no impact on your marketing budget.  You can get money for nothing.

The Old

Lost Business Reclamation

Customers leave for a variety of reasons but always a variation on the ‘grass is greener on the other side’.  Often it isn’t.  Customers are frequently gone before you know you’ve lost them.  In those cases where an agency can learn about a potential customer defection before it happens, the customer is retained 86% of the time.  They just want to know you care.  And if you show them that you care, even after customers have left your insurance agency, you can win back that lost business.  You can pick and choose who you want back, and a process employing a few well placed phone calls, surveys, and emails can bring ex-customers back into the fold once you’ve helped them realize the grass really isn’t greener on the other side.

Managed Referrals

Most agencies get nearly 70% of their new business from referrals.  Nothing wrong with that, except that in most cases those referrals happen fortuitously.  A simple program, wherein you reward customers for referrals with small gifts and constantly promote – with your email, website, on-hold message, and conversation – the existence of your referral program, you can increase the number of referrals your insurance agency receives dramatically.  Of course, if you are employing the first three tactics discussed in this post, your percentage of new business from referrals will decline.  But there is nothing wrong with that – it’s all low acquisition cost.

A recent survey from Forrester Research suggests independent insurance agents need to have a little more fun.  Consider:  ‘When it comes to “enjoyable,” consumers rated independent agents “poor,” but gave them “good” ratings for “meets needs” and “easy to work with.”’  Well, two out of three ain’t bad, but what if your agency could cancel out that insurance dread and score 3 out of 3?  This low ‘fun’ score is precisely why insurance agents find it so challenging to come up with social media content – social media is all about fun, and…well, socializing.

Who was #1 on the enjoyable list?  USAA.  USAA is a unique animal, to be sure, but there is something to be learned from their Facebook page.  I just scanned their currently displayed wall, top to bottom.  Nowhere did I see a we-can-save-you-money sales pitch or read a dreadful claims scenario wherein someone found out they didn’t have the right insurance.  USAA understands that Facebook isn’t a medium for the hard sell…it’s for fun.

You could say ‘insurance’ is the answer, and at some level, it is.  But that glib answer makes many of us miss several of  the imperatives of any business:  getting customers, keeping customers, and making sure our customer relationships are profitable (so we can stay in business).  I attended a recent agency association convention where I heard two comments repeated that I have heard for years:

1.  Oh, you guys do web stuff?  I’ll give your information to my technology guy to review.

2.  I’m in the insurance business, not the technology business.

I felt the need to post my take on those comments, but I didn’t feel like typing.  So here’s what you get:

I visited a new insurance agency customer of ours a week or so ago, and was happy to find him in his office putting together a bunch of quotes.  All that activity reminded me of something an insurance agent said to me almost two decades ago:  “You catch a lot more fish when the seas are roiling than when the waters are calm.”  But that begs the question, whose fish are you catching?  I spent a few minutes on the phone yesterday with an insurance company executive friend of mine who confirmed her company is concerned about flagging retention.

You catch more fish when the seas are roiling...

And that brings me back around to our new agency customer.  I worry about new agencies, it’s always tough starting a new business.  But over the last few weeks I’ve decided that this may be a better time than most to start a new agency.  New insurance agencies have a distinct advantage over established agencies in this economy – they don’t have to defend against defection of current customers.  The fish caught by new agents were dislocated from their former habitat by by the turbulent waves of this economy.

So good for new agents.  The moral of this story for established insurance agents is, that now more than ever, you need to be in contact with your customers.  That’s the only way to know if you are at risk of losing an account.  If you have been putting off sending e-newsletters, or implementing a legitimate annual review program, now is the time to end your procrastination.  And, if your customer development has applicability for developing prospects, then use it for that dual purpose.  After all, there are plenty of fish swimming outside your agency that belong to somebody else today and could be your customers tomorrow.

I read an enewsletter this morning, and the article started a chain of events that lead me to post here. The chain of events goes like this: I click on a link in the newsletter that leads me to an excellent blog post about the evolution of businesses using social media for marketing. That blog post compels me to look at a funny YouTube Video and check out Xerox’s corporate website. Finally, here I’ve come full circle, doing exactly the same thing the enewsletter did: summarizing and commenting on the blog post and Xerox’s social media campaign.

The blog post I read was from Jason Falls’ Social Media Explorer blog and it is worth reading in its entirety. Here is the readers digest version of the post, points that should be considered by any insurance agent on the precipice of jumping into Facebook or some other social media venture.

Social media is about relationships and social media works for businesses when people have something they can be passionate about.  In the case at hand, passion takes the form of amusement over a video (more on that in a minute).  It’s hard to get anyone to be passionate about insurance as a product, but let me reproduce a quote from Jason’s blog post here that is instructive:

I polled folks on Twitter Saturday, asking what compels them to talk about brands. Almost to a person, the answer was something along the lines of, “When I have an exceptionally good or exceptionally bad experience.”

So customer experiences, as well as humor are candidates for Facebook content.  But for heaven’s sake, leave the insurance products out.

Social media campaigns are generally about branding, and the bottom line results are going to be hard to measure, just as with any other brand building initiative.  What that means is that you better have some patience with your campaign, and you will need to find some other way to measure success besides new insurance policies written.

Everyone has jumped on the social media bandwagon by now, so standing out is going to take more time and effort than the early days when only a few businesses were using YouTube or keeping a Facebook group or page.  Success, however you measure it, might require more of your money or time.  To get a feel for the level of competition, take a look at the craft that went into Xerox’s Information Overload Syndrom video.

I’m not suggesting you throw in the towel, just that as a a small local insurance agency, you have to be realistic about social media competition , how you need to use social media, and the kind of results you can expect.

As a final note, let me point out that social media campaigns do work.  If that weren’t the case, you wouldn’t be reading this post.  Because you have, the brand awareness meter for Xerox, and for that matter Jason Falls, have been nudged a couple of notches.

Please take the time to read to the end and answer our poll question.  I’ll share the results in this blog.  If you would like to know when they are available, you can follow me on Twitter – @cfluent; or you can subscribe to the RSS feed to this blog.  Or just check back here.

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I picked up a new guide to writing web page sales copy about a month ago, and finally, due to a power outage the other day*, I had time to really think about it.  One common ‘hook’ in sales copy – the thing that grabs your attention sufficiently that you scan a little further – is the problem-solution formula.    That’s the most pervasive one, both on and off the web, in insurance sales copy:  ‘Your insurance costs too much and we can save you money.”  It is a hook that works, of course, or else GEICO wouldn’t continue to beat it to death.  I think that is also the easiest one for an insurance agent to latch on to, even though it leaves some of us with the queasy feeling that we are demagoging and commoditizing a service that shouldn’t be a commodity at all.

There is another variation on the problem-solutions recipe that shows up in insurance sales messages.  I’m going to call that the Allstate angle after their recent TV advertising campaign:  “If you don’t have the right insurance, you could find yourself leaving a courtroom bare-chested, the shirt having just been sued off your back.  We won’t let that happen.”  That’s a message that seems to work for Allstate, and many independent agents have adopted that same sales hook.

But as I read the copywriting guide, I was struck  by the effectiveness of using scarcity as the sales hook – you know, “this offer expires at midnight tonight”, or “we only have five widgets left” (a la QVC).  The scarcity message is problematic on a web page – “Look! I just refreshed the page after 2 hours, and there are still ‘only 5 widgets left!”  It also requires a little more thought in an insurance context; I mean, is there a limit to the number of insurance policies that can be printed?

But scarcity does fortuitously present itself from time-to-time.  A recent example here in Florida followed in the wake of State Farm’s announcement to pull out of the homeowner market.  A few of Confluency’s insurance agency customers seized that occasion to let customers and prospects know that their agencies had a number of financially solid markets that could accept State Farm homeowner customers at competitive rates.  They also warned (accurately and honestly), that due to market volatility, they might not have the capacity to place homeowner policies indefinitely.  The message:  procrastinate and increase your risk of not finding quality coverage at competitive rates.  And it worked.  All three agencies that I know of that used this approach more than doubled their new customers over about a two month period.  And then the tumult sibsided, scarcity moved off stage, and new business reverted to normal levels.  But what if your agency could manufacture scarcity and make a compelling case to a prospect for why they should act now?  I think it can be done, and I think it will improve agency bottom line results.  But first, some more background.

Doctors and dentists use a scarcity sales hook when they say they are not taking new patients or they are accepting only referrals (and some agencies work on a referral only basis).  These health care providers may not think about positioning their exclusivity as a sales hook.  A doctor may have a patient maximum imposed by their malpractice insurer.  Or a dentist may simply want to preserve free time and quality of life instead of piling in even more income.  But most always, professional service providers recognize the reality imposed  by time constraints and the necessary trade off:  if I take new patients, I’ll have less time to spend with my existing patients.  Insurance agents face the same trade off.

Suppose your agency were to set a monthly new business quota and then let potential customers know that if they wait too long into the month, they may not be able to become a customer.  OK, I get it.  Who among us is going to say no to a new customer.  But hear me out.  And by the way, this is something we wrestle with at Confluency Solutions; I firmly believe that within the next 6 – 12 months we will limit the number of new customers we take on for the very reasons I am about to explain.

The fact is, new customers cost money; we all know that.  For every quote that converts, somebody had to produce quotes for 3, 4, or 5 prospects that didn’t convert.  And  every quote opportunity was earned through multiple phone calls, emails, and other lead nurturing activities.  All that takes time.  How much?  Four hours per each new customer?  Five?  I don’t know, and it will vary from agency to agency.  The point is, every minute spent acquiring new customers could be spent nurturing incumbent clients.  There are things you do for your customers (or would like to do, if you had the time):  personal annual reviews, claims monitoring, educational safety or risk management seminars, etc.  And we all know that multiple, high-touch, value-added customer contacts result in better retention, more policies per account, and more referrals.**  In short, spending more time with your customers means more income.

All agencies need new customer growth and I’m not arguing against that.  But every agency eventually bumps up against a dilemma, wittingly or otherwise.  That dilemma is encapsulated in this question:  Is my insurance agency producing income from new customers at the expense of income (and better profit) we could produce by developing current customers?  To answer that question, you need to have specific customer development activities and results you can measure.  Maybe your agency does, maybe not.  But for the sake of illustration,  and my only hope of wrapping up this post, I’m going to assume a hypothetical agency does have a customer development program in place and can measure the results.

This hypothetical agency has determined the optimal number of new customers is 20 a month.  Further, the agency recognizes that half those new customers come from referrals.  So the agency decides to set a quota of 10 new customers a month, aside from referrals.  Then they craft a sales hook for their website sales pages and other sales collateral that goes like this:

We want to make sure you are never on your own when you have an insurance claim; our agency wants to be available to answer every question you have, in as much depth as you want; we want to recognize when a change in your lifestyle or business situation requires different insurance.  Because of that, we may not be able to accept you as a customer.  We have to protect the time we need to provide for all our customers’ needs, so we can only accept 10 new customers a month, exclusive of customer referrals.  We hope you understand.  And we hope you contact us as soon as possible, because we really would like to have you as a customer.

Think about the implications of a sales hook like that.  It creates a sense of urgency.  It articulates a value (actually value-added) proposition instead of just doling out the usual ‘we’re all about service’ platitudes.  It communicates to agency staff the commitment behind the kind of service you expect them to provide customers.  It also probably boosts office morale because the sales hook implies that you care about stress and overtime – you want to manage and protect staff time and sanity.

So there it is, scarcity vs. ‘you could save 15% or more’.  The anti-GEICO.  The question is, would you ever seriously consider implementing an approach like this in your agency.  I’d love to know.

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*In his book, The Age of Unreason, Charles Handy wrote about the benefits of unstructured time – protecting time for creative development and ideas; in particular he made not of several top performing companies that allow employees 15% of paid time for tinkering on their own projects.  I must confess, that except for sitting around in the dark without electricity for several hours, I can’t remember the last time I enjoyed any unstructured time.

**Of course, not all customer contacts need to consume a lot of time or cost money.  For a short video discussion about how to use a gift card program to improve agency results, check out Agency Resources website.