Act cFluent Newsletter, October, 2005 -
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1) Web solutions aren't 'one size
fits all agencies'.
By now most of us have heard that our agency needs to be on
the web. That’s a little bit like saying everyone needs
a pair of shoes. What style? What color? What size? What material?
Those questions need a context: there is no one right answer.
Where will the shoes be worn and with what, who will wear
the shoes and for how long are all relevant considerations.
In much the same way, your unique agency, your vision, budget,
staff and target market are all contexts that need to inform
what to do with the internet. It is true that nearly any agency
can benefit by using the web but how to use it depends on
your agency context.
Management follows a certain hierarchy from general to specific.
For instance, a Mission
Statement is necessarily general, allowing for a business
to adopt different objectives and strategies in different
time frames as conditions change. As Jim Collins pointed out
in his book Good
to Great, Mission Statements should change very infrequently.
At the other end of the scale are tactical elements like
Procedures. These can change quite often as business conditions
require. Guiding changes to procedures are higher level management
directives like Mission and Strategy.
Internet tactics and agency web sites are no different. There
is no right answer to what kind of web site you should have
and how you should use your web site except in the context
of your individual agency. Consider the two following agencies.
Agency A is a
large, well established agency which has chosen to concentrate
on risk management solutions. As a follow on to that strategic
choice, the agency has also elected to target medium to
large, complex commercial accounts. This allows them to
have relatively few accounts that are produced and managed
by highly compensated employees. Agency A has not been blind
to the fact that every single one of their commercial account
contacts is also a personal lines prospect. That has been
a source of concern because there is commission revenue
on the table and more important, some other agent is writing
the personal accounts creating a retention vulnerability.
Agency A, to be consistent with their mission, would need
to provide highly interactive, high quality risk management
tools via a web site before going after the missing personal
accounts. They would then need to develop a communication
and promotion program to tie those tools to other agency
practices and begin the growth cycle.
Agency B is a
small agency that specializes in hard to place personal
property and auto risks. Their mission is to quickly provide
insurance coverage for consumers who have an immediate need
and limited options. They have a number of relationships
that they rely on for referral business and also do some
broadcast advertising. Agency B is at a crossroads and needs
to decide whether to develop business with those clients
who have now ‘graduated’ from the immediate
need group or whether to expand their promotion programs
to get more of the same kind of business.
Both agencies can benefit from the internet but need very
different solutions to line up with their unique situations
and strategic decisions. Web decisions need to align, from
the top down, with Mission,
Management Philosophy and Operational Style (PDF).
2) Budgeting for the Internet
There are really two ways to think about the internet as
a business expense. Your approach to the internet may be to
generate leads and write business and in that case you would
think of the internet as a business development expense. Alternatively,
you may want your web site to provide service to current customers.
These could be new or existing services you are migrating
to the web. In either event you would think of the cost as
an operations expenditure.
More specifically, you could think of the web as advertising
and promotion expense or an information technology expense.
The truth is most of the time costs are actually a blend between
the two. According to IIABA’s
2005 Best Practices survey, agencies spend between 2.0%
and 5.6% of revenue for these two expense areas combined.
Money you devote to a web site, tools and content, internet
promotion really come from this pool.
There are some additional expenses that you should expect
to incur when doing business on the web and those are in the
area of promoting what you have to offer. The costs should
be small and web site promotion can often be incorporated
into other campaigns and activities. But, unless you have
a plan to promote what you are doing on the internet you are
not really using the internet. There is a difference between
using the internet and having a web site and that difference
is the difference between business results and lack thereof.
Done right, a web site and internet activities should not
include hidden technology costs. Outsourcing hosting can shift
the burden of support to professionals who are dedicated to
internet technology and can be advantageous since a good hosting
company will have added security and redundancy for disaster
situations.
Web marketing investments can deliver very high returns;
internet marketing campaigns also can be tracked far better
and more easily than most traditional programs. Just the same,
your agency may not be in a position to shift budget money
from lower pay-off initiatives at the present time. In that
case you might want to start small and scale up. Different
stages of web use have different characteristics, costs and
paybacks (PDF). Three things should be kept in mind if you take
this building block approach. The first was covered in the
first part of this newsletter: make sure what you want to
do with the web is consistent with the kind of agency you
have. The second is to make sure that each step moves you
closer to achieving whatever strategic objective you set for
your self. The third is to be sure that early solutions can
be built upon, that you do not have to start over and incur
expenses anew.
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About This Newsletter - Newsletter Archive
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Act cFluent
Information for independent agents about issues at the confluence
of technology, consumerism, marketing and agency practices.
Tell us what you like, dislike, agree or disagree with.
>> tstrong@cfluent.com
About Confluency Solutions
-----------------------------------------------
Confluency Solutions specializes in solutions that generate
growth through high customer satisfaction. Easy to implement
technology combined with traditional independent agency strengths
vault your agency into the ranks of the top performers. Confluency
Solutions provides complete business solutions, not just technology.
We free you up to compete at an advantage, with any size competitor,
in a way that just isn't possible without the right tools
and without knowing how best to use them. Confluency Solutions
makes the web work.
>> Learn more about us: http://ConfluencySolutions.com
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