By Insurance Journal
While building a successful agency takes much dedication and hard work, it may not be as difficult as you think provided that you implement several key strategies.
A wealth of material exists on the tangible factors and steps necessary for building a successful agency like product/service offerings, pricing, business planning, etc. Therefore, the focus of this article is on the more intangible?but often more important?agency success strategies. While reading about these strategies, I suggest that you spend a few minutes considering each one and visualize what effect the particular strategy, if executed well, could have on your agency’s success.
1. People do business with people they like. With no disrespect to an agency’s products/services, price, quality service, dependability, etc., this is absolutely the most important critical success strategy. In fact, a very frugal colleague of mine recently drove this point home, to my amazement, with a personal experience he shared outside of the insurance field.
My colleague was personally remodeling his home last summer and paying cash for the materials. The bill ran well into the tens of thousands of dollars and the national home warehouse chain had all of the materials in stock for 20 percent less than the local hardware store. What’s more, the hardware store would have to special order many of the materials, which would delay the project several weeks.
I was shocked, however, when my friend told me that he chose to pay more at the local hardware store. I asked him why, and he said, matter-of-factly, “Because I like them.”
His decision ran much deeper than price alone when he revealed that the owner and the employees at the hardware store had given him hours of free advice over the years, and on occasion, had even sent him to the warehouse chain when they couldn’t find a product faster or for less. He said their complete honesty and integrity had won him over, and he felt he had a contract with his conscious that dictated he have the same integrity in deciding where to purchase the needed materials.
My friend’s experience made clear one of the primary truths of selling: people do business with people they like. Regardless of whether it’s a one-person agency or a large organization with dozens of agents, if your people individually focus on just this one constant while building the agency, you’ll experience much success.
2. Your customers must always feel right, even when they’re wrong. A Nordstrom customer’s experience provides an excellent example of this truth. Many years back, a man unknowingly returned a set of defective tires to a Nordstrom’s location where a tire store had once been located. Despite the company’s position as a clothier (seemingly everyone knows the only rubber Nordstrom’s sells is on the bottom of sneakers), the sales associate nonetheless issued some type of refund or store credit, thus satisfying the customer.
Granted, this example is extreme. However, the underlying principle stands: for long-term prosperity and patron loyalty, a customer must always feel right, even when she’s wrong. Every customer is important so ensure that you and your people always make each one feel important.
I suggest your agency follow Nordstrom’s lead when creating a customer service charter. You can’t put the onus on your customers to get ‘it’ right every time. Too many agencies and large insurance companies focus on the reasons and technicalities as to why they can’t help a customer, rather than offering solutions to help fix his problem. The reality is, problems will arise. The problems aren’t the challenge. The challenge is responding to these problems effectively for these responses help determine an agency’s ultimate success or failure.
3. Investing in your agency’s greatest asset. One of the most common assertions agency management makes is, “Our people are our most valuable asset,” yet few validate this assertion with professional training.
I’ve been in the professional sales training business for more than two decades, and without question the most commonly overlooked avenue to increased sales?but commonly the most effective?is a company’s decision to invest in the professional training of its greatest asset: its people.
It’s puzzling how many companies are willing to invest in their infrastructure but don’t view their personnel similarly. Many insurance agencies will invest large sums in the newest customer relationship management software or glossy marketing collateral, but not invest in their people. However, cultivating and training a company’s people can yield outstanding results.
Evidence, such as Motorola’s estimate that the company receives a 30 to 1 return for every dollar invested in employee training, affirms that a company’s surest way to profits and productivity is to treat employees as assets to be developed support the value of training. Yet company after company continues to claim they can’t afford training in the face of the overwhelming evidence supporting its’ ROI.
Rather than management asking, “Can we afford to train our people?” I would ask them, especially during the current business climate, “Can you afford not to?” For the potential benefits far outweigh the dollars required. Benefits like improved morale, greater satisfaction, increased loyalty, reduced turnover, more effective teamwork, increased sales, and increased profits. More than anything, an agency’s employees are its greatest assets?assets worthy of being invested in.
4. Always sell your agency to your customers. This strategy is absolutely critical to the long-term success of your agency. You must always be reinforcing in your customers mind why they’re choosing your agency, and why your agency is the best choice.
Don’t become complacent just because a customer has been with your agency for several years. Remember that it costs five to six times more to win a new customer than to keep an existing one. But what do many agency’s do? They employ the find ’em and forget ’em practice. That is, once they win a customer, they continue focusing on securing new ones rather than keeping those they have. This practice can prove costly?and potentially deadly?to your agency’s long-term viability. Your customers chose your agency with good reason ? don’t ever let them forget that. Remind them constantly.
5. Continuous marketing. This tactic is born from selling your agency to your customers. How is your agency reinforcing its position in its customers mind? Possible strategies could include a monthly newsletter, quarterly mailings, customer focus groups, special customer appreciation events, or just a phone call every few months.
And how is your agency marketing to potential customers? The two most critical factors to marketing success are repetition and frequency. Studies show that a prospect must see a company’s name six to nine times before they remember it, 12-18 before they dig deeper, and 18 to 24 (or more) times before they make an inquiry.
So whether it’s an ad in a trade publication, a direct mail piece to a brokered list, or simply a letter to prospects within your agency’s own database, frequency and consistency are the key to converting potential customers into paying customers. How frequently are your agency’s products/services ‘in front’ of potential customers?
6. Word of mouth. Without question, this will be your agency’s gold mine for generating new customers. Research shows, however, that customers are often 10 times more likely to share a bad experience with friends and associates than a good experience. But this doesn’t mean, however, that your customers won’t rave about your agency’s performance. It’s just that your agency must encourage them to do so.
What mechanisms does your agency have in place for regularly receiving feedback from its customers?satisfied and dissatisfied alike? If nothing else, ensure that an effective testimonial solicitation program for satisfied customers is in place. And once you receive these testimonials, use them liberally.
7. Up-selling. Do you have a set practice and timeline in place for revaluating your customers needs? Simply because a product/service is right today doesn’t mean it will be right next year, or even next month. Ensure that your agency is routinely learning of its customers ever changing needs. Doing so demonstrates your agency’s professionalism and reinforces in its customers minds why they’re doing business with your agency.
A word of caution: while up-selling will tap into a new, and potentially very profitable, revenue stream, be certain the driving force is to better help and serve your customers. If it’s not, it won’t take long for customers to learn they bought a product/service they didn’t need and/or couldn’t afford which will undermine the goodwill you’ve developed.
8. Partnering with other businesses that share common clients. Although this strategy is obvious, many businesses don’t employ it. In short, this strategy says that customers with specific demographics need specific products/services. Your agency’s job is to simply find out what products/services these are and to partner with companies that provide them to better serve both customer sets. Again, ensure that your agency’s true motivation is to better serve existing customers and potential customers.
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