Insurance Agency Sales Growth, Cloud Computing Security, and a Google Places Update' vs. 'Email, Social Media.
Act cFluent Newsletter, May, 2010 - Subscribe today Subscriber benefits include early evaluation of new products and discounts.
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The Insurance Agency Growth Process and One of Kind, Handmade Works of Art
Someone I know and respect just retired from a long insurance career. I'll spare him any embarrassment by mentioning his name here, let's just call him Ray. I had the privilege of working with Ray in a variety of capacities over the years. When I first met him, I was an agent attending an insurance company workshop as an agent representing Ray's company. Later, I left the agency world and went back to work for an insurance company. Within a year Ray had jumped ship from the insurance company where I met him and landed, as my boss, at my insurance company. I have no choice but to subscribe to the small world theory.
Ray had a knack for noodling through almost any business issue, dissecting a complex problem, and then reassembling the analysis and solution in a simple and comprehensible format. One of those formats was the catchy one-line aphorism - Ray-isms, if you like. I'm reminded of one over and again - 'One of a kind, hand-made, work-of-art.' What is summed up in that phrase is the kind of heroic effort that agents often have to undertake to achieve sales growth and profit. The problem with Herculean endeavors is sustainability. 'One of a kind, hand-made, works of art' are dependent on one person, operating at 120% capacity, with all the stars aligned around them. Fortuitous dependencies don't last forever: employees, including supporting employees, leave; markets turn and dry up; weather events cause a deluge of claims that take up sales time. And so on. The first thing to give way are those one of a kind hand made works of art - the key to sales and profit growth for too many of us.
Sustained profit growth, on the other hand, requires a systematic process, not excessive dependency on key people and fortuitous circumstances. 'System' is not synonymous with technology although a system can be automated (unlike the work of art). Insurance agency sales and profit systems essentially are collections of communications, delivery intervals and tracking mechanisms. Once these communication pieces and timings have been created you can use various levels of automation, from manually launching emails to using automated email follow ups for the delivery. Tracking mechanisms can be low tech check sheets to high tech CRM systems.
I'm going to suggest every agency interested in sustained growth needs sales management processes in three key areas: new business conversion, customer development, and managed referrals. Systematic processes, once you have them in place, include lots of side benefits.
New Business
A new business conversion process, and improved conversion rates, mean that your insurance agency can successfully participate in more expensive and expansive new business programs. For instance, if average policy commission is $200 and your sales conversion rate is 15%, the most you might be willing to pay for a new business lead might be $30 (15% of $200 = $30). But, if you could improve your conversion to 30% through a systematic process, you might happily pay $60 for a lead (30% of $200 = $60). Higher conversion rates allow your insurance agency to play in more new business games - it's easy to play if you know your odds of winning are high.
As the old axiom has it, 80% of all sales take place after the fifth touch. What we all learn, by attempting sales and sales management, is that some 'touches' - particularly the phone kind - require multiple attempts. So an average insurance sale oftenrequires ten or more contact attempts before close. A motivated, managed, and focused producer can pursue those contacts and get good closing rates. But a good, systematic process insures that that sales conversions take place by identifying the right emails, phone calls and other contacts, and supplying the templates and instructions for those contacts and touches and - even if your heroic producer becomes distracted or leaves your agency.
Customer Development
Renewal commission is the blessing and curse of the property casualty business. The service burden that comes with renewals can get in the way of new sales activities but improvement in renewal income can also fund new business programs. Monthly email marketing to customers has proven, over and over again, to improve retention, increase account sales and accelerate referrals. Email marketing may not be as fashionable as it once was but it is still every bit as effective. Every agency should be in the business of gathering, updating and using customer email addresses to send out safety and educational information. The expense of doing this is small, especially as compared to the income benefits; and a systematic process for gathering, maintaining and using emails means that little time will need to be spent executing these communications.
Managed Referrals
For most agencies, up to 70% of all new business comes via referrals. Referrals are great - they come with high conversions and generally contribute to good loss ratios. But, all to often, the reason for the high proportion of referral new business is because of the low new business production for other sources and tactics, not because of a systematic referral program.
Every customer contact is an opportunity to remind about your referral program, if not to outright ask for the referral. Email signature lines, website messaging, and on-hold recordings should all encourage customers to inquire about your referral program. In some forums, like your website, you can explain the details of your insurance agency referral program. And, of course, before you start promoting the program, you need to have a program. Simple gift cards, monthly eligibility for more significant prizes are a good start; in many instances, readying yourself with a reward for referrals and doing some passive promotion of your program is all you need to achieve a significant boost in referral activity.
Bonus: Companion article on Insurance Agent Web Power: The Foundation for Growth: Four Things Every Insurance Agency Should be Doing.
Google Places - A Recent Twist on Google Local Search
On April 20, just two days before Confluency's webinar on local search, Google announced several new tools for local search engine marketing and a few changes in their service. We didn't have time before the webinar to review these changes in depth but now we have (thanks for the last minute homework, Google). In Google's continued quest to provide the most comprehensive local search service on the planet, they have promised even more enhancements in the near future. So fasten your seat belt for even more future changes.
Google's Local Business Center Now is Google Places
When you log into Google's Business Solutions to add or edit your business listing, you will see that the link to the Local Business Center has been replaced with a link to Google Places. That's pretty straightforward.
Place Pages is Your Local Business Listing on Steroids
The 'more info' link that accompanies businesses displayed in a local search return (next to Google's Map) will take you to what Google is now calling a Place Page (your local listing). In Google's own words, 'A Place Page is a webpage for every place in the world, organizing all the relevant information about it. By every place, we really mean *every* place - there are Place Pages for businesses, points of interest, transit stations, neighborhoods, landmarks and cities all over the world.' Google has long allowed for business owners to add a lot of rich content to their business listing...er, I mean Place Page, but now they have expanded the content they include - both contributed by business owners and gleaned from third party sources. To get a feel for the new, improved Place Page, take a look at the one provided for Seattle's Space Needle
Service Area
The ability to show your service area, beyond your office location, was limited in the old Local Business Center. Google Places now allows you to set a radius, with your office location(s) as the center; there is also a place to list the place names in your defined market area. 'Virtual' or home based agencies, without a business address can use this feature and now be displayed in local search results without divulging residence addresses.
QR Codes
It's hard to know if this feature will amount to anything. Google is so pervasive in search, and in other areas like video through YouTube, that we sometimes forget about all the failed services it has launched over the years. Businesses can now print a poster for their business with a QR code - a kind of bar code. This QR code can also be imprinted on business cards and other print collateral. Many smart phones can read QR codes, and by scanning a business QR code, a browser session will automatically be launched linking to the business' Google Places listing.
Advertising with Tags
Google will 'tag' your business with additional information about features and services for a flat fee of $25 a month. These tags won't improve your search rank but it may make your listing stand out among others when it is found. This feature is currently available only in limited geographic areas
Business Photos
Agencies have long been able to upload multiple photos of their office - inside and out - to their local listing. With this announcement Google now offers a free photo shoot to take care of this for you. The service is limited to a select number of cities but Google promises to expand the availability
Cloud Computing Security Begins with Your Password
Cloud computing is a hot topic right now, even though it has been with us for quite some time. Many of us have been using agency management or CRM systems where all data and functionality is hosted on another server (or servers). But now that the term 'cloud computing' has achieved fashionable status, all kinds of pundits are raising issues that have also been with us for years. And chief among those concerns is data security. The fact is, that most cloud computing services are far better equipped to provide data security than most agencies and other businesses, and the number one vulnerability to that data security is in-office practices starting with user password selection.
All this reminds me of an article I read back in the day, when I did some bicycle road racing (OK, way back in the day). Then, as now, bike frame and component weight was a big deal and even casual racers would spend thousands to shave a pound or two off bicycle weight. One astute observer noted that a few pounds could be shaved off the casual bicyclist a lot more economically. None-the-less, enthusiasts would spend the money on their rides rather than engaging in a little diet management.
Choosing a secure password is a vital first step toward cloud computing security and one of the most simple things you can do is just select a longer password. One approach hackers use to crack passwords is to use what are called brute force attacks, that is, having a computer, or group of computers, run through a series of password possibilities until the code is cracked. You might think that increasing the length of your password will improve its security, and you would be right, but most people underestimate just how much more secure longer passwords are than shorter passwords. Consider: a brute force attack can crack a four-character password in about a minute, whereas a brute force hack would take about 17 years - almost the time it takes to raise a child and graduate her from high school - to crack an eight-character password. Moral of the story: if you care about cloud computing security, use longer passwords.
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