Back in the 80′s, I blossomed into a full fledged beverage snob:  coffee, scotch, but especially, beer.  In the part of the country I lived in at the time, craft beer was hard to come by and brew pubs were a bit of novelty.  Fortunately, I traveled quite a bit, and was able to sample some excellent micro-brews from a then burgeoning micro-brew movement.  I even got into home brewing, just to prove my street cred.

When I visited a brew pub, I was most keen on sampling interesting beers and ales.  Don’t get me wrong, I like my food and ambiance as much as the next guy, but I figured there were lots of places to get those things.  When I walked into a brew pub, I was there for the beer.  Some brew pubs were small and obviously bootstrapped by the owner/brewer.  The large brew pubs had nice graphics for all their beverages, fancy menus, and fresh decors.  Who almost always had the better line up of beer?  The small breweries.

The large brew pubs, I’m sure, we’re capable of brewing whatever beer they wanted, but they had to cover their overhead.  Read that as, they had to sell as much beer to as many people as possible. Because of that, they tended to keep their range of beers pretty tame, and used their trappings to lure you into the establishment. They weren’t for me.  Which brings me back to insurance agency service providers.  Those that invest a lot of money in advertising and keep a healthy staff of well paid people around may well be in a position to provide expertise and assistance to your agency.  But they also have overhead to cover so they are more likely to need to convince you, with a really hard sell, that you need their service, when in fact you really don’t.

So now the principles from the blog post…When confronted with a decision about whether or not to make a really big business investment in an insurance agency marketing service:

1. Make sure you understand all the costs, not just what service provider is going to charge you, but other expenses you may incur as you implement their system.
2. Run some rough calculations about how much new commission you would have to generate to make the investment pay off.
3. Take your time, never make a decision on the spot, and check with a number of the service provider’s client agencies to get an accurate picture of whether you are likely to generate the level of new commission you need to make the investment make sense.

Common  sense, really.  And it sort of applies to beer.

Do it yourself, or get someone to do it for you, but get listed with the local search engines and directories.  Agencies that take advantage write more new business every month courtesy of an essentially free tactic.

Dominate Local Search a local search service from Confluency Solutions

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.

The answer is because no local agencies have optimized their local listing in the Google Local Business Center.  Most haven’t even claimed their free listing.  I have seen local SERPs with attorneys, body shops and even Wal-Mart’s Vision Center better positioned than local insurance agents.  An individual searching on the word insurance is far more likely to be seeking an insurance provider than eye or medical care – and Google would like to provide options that fit a searcher’s objectives.  But even Google needs a little help from time-to-time.  This oversight committed by most insurance agents provides a golden opportunity for others.  Confluency Solutions is conducting a free webinar for insurance agents on April 22.  If you want to boost your agency’s search visibility, and write more new business,  you might want to think about signing up and sitting in.

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.

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.

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.

Other ‘good enough to get on with it’ products and services cited in the article include gmail and Zoho Writer, a Microsoft Word substitute with fewer bells and whistles (but most of the features you are actually likely to use). Oh yeah, and what about the advantages of a (relatively) unsophisticated, unmanned Predator aircraft vs. a $45 million F-16 (options, including pilot, may cost extra)?

Wired isn’t alone in noticing that cheap and simple solutions are often the best ones. In the upcoming sequel to Freakonomics – called Super Freakonomics – Steven Leavitt and Stephen Dubner have included a chapter chapter entitled The Fix Is In – And It’s Cheap and Simple.

I think this movement toward ‘good enough is more than effective’ is good news for agency manager perfectionists. Instead of wrestling with decisions about which expensive and complex software or web service to work with, just go with what works, and can be had for little or no money. Here’s a few favorites that insurance agency managers should be thinking about:

For video calls, and free long distance, try Skype. Depending on features you may wish to add (a traditional phone number, the ability to call out to land line or cell phones, e.g.), you may pay a few dollars a month.

And speaking of YouTube, there is no simpler way to get your video converted for streaming and to add it to your website.  We have been using YouTube for a variety of purposes at Confluency Solutions, and set up our own channel a little over a year ago.  Use YouTube videos to explain insurance coverage, the claim process, or to highlight safety issues.  Oh, and the cost – free.

Video email can be free, or you could pay as much as (gasp!) $99 a year.  Eyejot is our service of choice.  At Confluency, we use it for proposal deliveries, conference/trade show follow ups, and to set up renewal reviews.

Email management, CAN SPAM compliance, and newsletter sign ups can be facilitated by several services.  MailChimp is free, as long as your ‘subscription’ list is $500 or less.  After 500, the monthly fees are low.  (Your insurance agency might have 2,000 customers, but how many email addresses do you have?)

For web conferencing, including document and screen sharing, try DimDim.  The service is reliable, easy to use, and free for up to 20 attendees in a session.

The list could go on and on, but in my experience, these are good places for most insurance agencies to start.

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: