The Insurance Journal posted an article yesterday, summarizing the main reasons why insurance agents aren’t adopting social media as a communication tool. I think it is worth commenting on each….

Some agencies are concerned about the errors and omissions risks that might arise out of the use of social media outlets…

E&O exposures can be managed to zero – if your insurance agency is willing to go out of business. On the other hand, E&O exposures can shoot through the roof if agencies don’t manage their communication policies at all. Somewhere between going out of business by practicing absolute avoidance and going out of business by not controlling E&O is a level of Errors and Omissions exposure that can be acceptably managed. That management should start with a policy, include staff training and monitoring of communications. Social media, including blogs, Facebook, Twitter and the like, are communication tools, just like the telephone, snail mail and email they should be managed the same way.

Many agents are reluctant to blog because they view themselves as insurance people, not writers….

All businesses – insurance agencies included – are in the business of acquiring customers, keeping them, and maximizing customer value by doing as much business as possible with each customer. There are numerous and varied techniques for getting new business and developing customers but one thing all tactics share in common is communication; without communication, no business gets done. Insurance agents need to know about insurance products and coverage if they are to provide professional counsel to customers and prospects (besides, licensing pretty much requires it) but that counsel won’t be received unless agents can communicate effectively. Increasingly, people use social media to communicate all kinds of things. Taking a head-in-the-sand approach to social media will eventually lead to deteriorating business results – even for insurance people.

Some (insurance agents) see social media as just fad…

MySpace used to be the leader in the U.S. in online social networking until it was supervened by Facebook. LinkedIn is the leading business social networking tool among Americans but it is being challenged by the Europe’s leading social network Xing. Twitter is a johnny-come-lately; maybe it will be a force a year from now, maybe not. The point is this: individual social media services may be fads but social media, as a communication trend, is clearly not.

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.

Snowstorms, Social Media, Your Insurance Agency

Snowpocalypse: When weathermen predict large amounts of snowfall in a short period of time – Urban Dictionary

Snowmageddon: President Barack Obama’s term for the February snowstorm that shut down Washington, D.C.; or End of (school) Days due to an excessive snowfall event.*

What does any of this have to do with insurance?  Surely, if your insurance agency is located in an area experiencing a snowpocalypse, you have an insurance story to tell.  Maybe it’s how your staff were able to work from home to help clients with claims issues, or a heroic trip into the office to be there for your agency customers at a time they might be more likely to need your services.  Making the connection between a weather event and what is going on with your agency, your staff, and your customers is an easy blog or Face Book riff.  You don’t need to write a new chapter for War and Peace every time you post to Social Media.  And who knows what kind of interest your short post might engender, particularly if you can add a photo or video?

*Note:  Snowmageddon was the number 1 trend on Twitter at one point during the February, 2010 snowstorm

A new blog can be set up in a snap.  You can add a Facebook page for your insurance agency in just a few minutes.  Your insurance agency can prove it is in the know by setting up a Twitter profile.  Starting a social media account is easy.  Keeping up your shiny new blog or Facebook profile takes time, so much time, that most blogs quickly fall silent; in 2008 Technorati – the blog devoted to blogs – found that of the over 130 million blogs they tracked, only 5% had been updated in the last five months.

Deriving real business benefit from social media takes even more effort, and likely some cost, despite all the pundits who extol the virtues of this fee medium.  There is no doubt that blogging and Tweeting can add first stage SEO benefits for your insurance agency if you put the time and effort into these communication tools.  But what about the benefit of attracting a legion of loyal friends and fans to your social media space?  This may be most difficult of all for an insurance agency.

This week, Marketing Sherpa published a chart showing why consumers become fans of businesses.  While all of the reasons people friend businesses can be leveraged by insurance agencies, the top two, “Learn about new products and features” and “Learn about specials and sales” can probably be ruled out.

Why Consumers Become Fans of Businesses

( Note:  Max Connectors are defined as people with over 500 ‘connections’)

Insurance regulation prohibits discounts and sales, so unless you can be really creative, you are going to be hard pressed to post any content in this category that will attract a consumer following.  There is plenty of product innovation taking place in the insurance industry, as those of us working in the business know, but new product features and services tend to hold interest only to industry insiders.  That new coverage provision just can’t mesmerize the populace the way the newest iPhone, Windows operating system, or hybrid sports car can.

The remaining two content categories – “Company Culture” and “Entertainment” are probably rich enough to provide a thematic basis for your insurance agency social media content, but regularly posting this type of compelling content isn’t something most of us have been prepared to do.

I’m not suggesting that leveraging social media for the business benefit of your agency isn’t a strategy you should consider.  But I am saying that Facebook and blogging are not money-for-nothing, get-rich-quick schemes.  Social media takes as much time, effort, and expense as other business development options, so weigh your expectations and commitment accordingly.

Poor old email.  Celebrities don’t use it to communicate their fans, and infotainment talking heads encourage viewers to check their Twitter tweets. So is email dead?  Should we send out the funeral service notices?  The chart below tells the tale.

Poll:  How do you share information you receive in email?

Despite the hype surrounding blogging, Facebook, Twitter, and social networking in general, email is still the way most people share information with friends, family, and associates.  Social media is a very, very distant second.  That doesn’t mean that your insurance agency shouldn’t be developing a social media strategy, but the chart should give you a visual clue as to the amount of time you should be spending on that social media vs. gathering, managing and using email addresses.

Marketing Sherpa posted survey results about how businesses in general think social media (SM) fits into the marketing tool box.  Basically, most businesses see SM as a complementary, but not a replacement tactic.  However, most businesses view SM as important enough to warrant its own budget line item and staff.  What does your insurance agency think about social media like Facebook?  Take a poll and me know.

I can’t quite leave the theme raised in the last post:  is it technology or is it communication?  I also can’t quite move on from using the lazy approach to posting:  video.  Watch as I opine:  I don’t see the reticence many insurance agents have toward using email as being a new phenomenon; and watch as I wax nostalgic on managers from my distant past not setting a good example using tools they encourage others to use.  Insurance agents are under utilizing email, a tool that is certainly in decline as social networking gets bigger.  It’s time to maximize email benefits before it’s too late.

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:

Social media marketing is work; it takes time, it is a game played by different rules than most agents are used to.  Results will probably come slowly, and be difficult to measure.  With all my skepticism, I still believe that insurance agents should be taking measured, disciplined forays into blogging, Facebook, YouTube…and yes, I suppose even Twitter.  The Ten Commandents of Social Media, posted by Lon Safko on the Fast Company blog, is a great place for most insurance agents to start, although I wouldn’t recommend following every commandment (I like to think of them as suggestions anyway).  Below are the commandments reproduced, along with my opinions of whether they are elective or mandatory.

Commandments 1. Thou Shalt Blog (like crazy)

Elective. Blogging takes time.  Having said that, it wouldn’t hurt to start a blog, even a personal one that you share with only a few people.  At least you will become familiar with the medium.

Commandments 2. Thou Shalt Create Profiles (everywhere)

Mandatory. This isn’t hard or time consuming and has the defensive benefit of securing your business user name on the different social networks (this is different than claiming your insurance agency domain name).

Commandments 3. Thou Shalt Upload Photos (lots of them)

Mandatory. There are lots of places where you can do this:  Facebook comes to mind immediately, and don’t overlook photo sharing services like Picasa and Flickr.

Commandments 4. Thou Shalt Upload Videos (all you can find)

Mandatory. And leave the commercials out (remember those things you FF past using TIVO).  Nobody wants to see them.  Be educational, tell a story, feature your staff in the community.  There is no excuse for not taking advantage, this is maybe the lowest hanging fruit in social media because video upload is free (see YouTube, Viddler, and a bunch of others), and the video can be embeded all over the place once it has been created and uploaded.

Commandments 5. Thou Shalt Podcast (often)

Elective. You should really be doing video anyway.

Commandments 6. Thou Shalt Set Alerts (immediately)

Mandatory. Facebook and other social network services will send text messages to you, and other services provide similar options.  You should be using Google Alerts, or another service to keep tabs on where your business name pops up.  You need to monitor what people are saying about you for obvious reasons.

Commandments 7. Thou Shalt Comment (on a multitude of blogs)

Elective.  Or Mandatory. I can’t decide.  Monitoring blogs can take up more time than you might be willing to commit, but commenting on the right blogs and social media can raise you profile and establish you and your insurance agency as an expert – there can be real brand value in this, and your time expenditure can be managed.

Commandments 8. Thou Shalt Get Connected (with everyone)

Mandatory. If you want to build a social network, this is how you get started.  That is, once you have established your profile.

Commandments 9. Thou Shalt Explore Social Media (30 minutes per week)

The most Mandatory of all. At least that’s what I think.  Thirty minutes a week isn’t too onerous a time commitment to explore and become familiar with a phenomena that has the potential to shape how business is done.

Commandments 10. Thou Shalt Be Creative (go forth and create creatively)

Mandatory. I’m going to cheat on this one by including the rest of the Fast Company blog post on this commandment.  I’m reading between the lines:  don’t do product commercials.

And the most important commandment is creativity. That’s all. It’s just creativity and having fun. But you know what, that’s what your customers want. They want to see transparency. They want to see authenticity. They want to see you having fun. They want to be able to relate and communicate.

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.