Prototype Marketing Helps to Assure Your Agency’s Future

It always seems like the other guys are growing quickly. How about you? As each day passes, agency consolidators add new offices, banks gain experience in selling and prospecting, and a new generation of propeller-heads are figuring out how to use the Internet for insurance. Meanwhile, there’s your more traditional competition: increasingly sophisticated independents, captives and direct marketers. The bottom line is each one of these rivals is costing you business, both new and renewal.

To replace what you’ll ultimately lose to your fellow sellers, and to add new accounts, you must experiment now, while there is still time to learn from any marketing mistakes. It’s not too late to amend or add to the ways that you attract business.

Yet, unfortunately, many agency principals are averse to changing their ways. The main reason is “if it ain’t broke, why fix it?” The answer is because insurance marketing isn’t like a piece of machinery. For it to continuously generate demand for your agency’s services, it has to be endlessly tested and tweaked. At times it even has to be radically altered.

An effective way to accomplish this is by forming one or more “Experimental Marketing Units” (EMU). An EMU is an agency team that invests just a few hours a week testing the potential of various insurance promotions. This unit can help you to learn which new programs and marketing methods are worth your while to pursue, and which are not. The results of their studies can send your organization into new and exciting future directions.

Start by putting together two EMUs consisting of select CSRs and producers. One crew is made up of personal lines pros (PL); the other consists of commercial liners (CL). Then, to assure the open exchange of ideas, exclude any agency managers from these teams, if at all possible. Be sure to allow both groups the freedom to meet away from the office (and separately from one another) for an extended lunch hour, once a week. At the early meetings, the units can build lists of marketing ideas. They may brainstorm for new concepts, reconsider past programs that weren’t well implemented, ask company reps for input, and freely borrow from their larger, better financed competition. Or, they might use my sample tips [see page N12] to get started.

Now is the time to press your advantage. Many major insurance marketers are top heavy with managers and overhead and lack the flexibility to analyze a continuous stream of fresh ideas. With an EMU, you can literally beat them to the market. Unlike the major marketers, you can’t afford to heavily invest in a promotional campaign only to have it bring in less than desirable results. Your pockets aren’t nearly as deep. This is why you should always build a scale model of a potential promotion, a prototype, before jumping in head first. Here’s how to proceed.

Once your EMUs have identified what their initial marketing programs will be, they’ll need to be tested for effectiveness. Provide each unit with a bit of time and a petty cash budget to build and carry out a mini-version of each experimental promotion. This abbreviated campaign will tell you much of what you need to know.

Since your prototype budget will be low, here are a few money-saving tips. Don’t spend a ton on printing costly marketing brochures. Instead, create your own starter sets using quality desktop publishing software like Microsoft Publisher 2003 or Adobe InDesign CS. Also, contact only a few hundred sales leads in the beginning, rather than accumulating and going after every known prospect within your target audience. And in lieu of hiring telemarketers, make all of your initial calls in-house, subject to all applicable Do Not Call regulations. Then, after 13 weeks (a calendar quarter), and allowing for some last-minute tweaking, each prototype under consideration should either be expanded or dropped.

You as the manager, not the EMU, should decide its fate, as the team will be too close to be objective. When an idea doesn’t show promise, move onto another, bringing over the lessons you’ve learned. Then once a winner is found, the unit can disclose its magic formula to those charged with continuing their success, freeing the EMU to resume its explorations.

Prototype marketing, as practiced by experimental agency units, helps you to learn which adventures will unlock tomorrow’s sales success, and which will only use up scarce resources. These units aren’t intended to be your final production teams. The EMU’s job is to gain hands-on experience, to revel in the excitement of experimentation through test marketing, and finally to teach others what they’ve learned. These “others” are the CSRs, producers and managers who will carry on and expand the winning prototypes. Each mini-success can be quickly built upon, while any failures should be noted and dropped.

As your expanding list of rivals grows ever larger and more aggressive, EMUs can enhance your future survival. After all, as long as your agency is still in business, you have a fighting chance to stay that way.

10 Sample Ideas for “Experimental Marketing Units”
1. Quotes at odd-hours. Offer evening and weekend “second opinions” to people, over-the-phone, on auto and home insurance. This old school alternative to Internet quotes has real appeal to individuals who are hesitant to reveal vital personal data online.

To accomplish this, you can hire an answering service to collect rating information, then follow-up with a quote from a licensed pro. Or, you can set up a cash-shy agent or licensed CSR to deliver complete quotes from home. There you’ll install a rating PC, printer, and a special local or toll-free number with a distinctive ring. This usually can be done without physically adding an extra phone line. Direct marketing giant GEICO advertises 15-minute auto quotes at all hours. So if you want to get aggressive in personal lines, this experiment is a good place to start.

2. Umbrella hit-teams. Most umbrella and excess liability policies are relatively simple to underwrite, price, sell and retain. Use EMUs to set up the procedures that will identify your agency’s most likely PL and CL umbrella candidates, and then solicit them with individualized, computer-generated direct mailing pieces, postcards, etc. “Hit teams,” made up of sales-oriented CSRs, can carry out a large scale program once the preliminary efforts prove successful.

3. Endorsements by mail. Certain additional premium endorsements can be sold entirely by mail. An EMU can make this happen by designing a direct mailer that describes a recommended upgrade, broadly estimates its extra annual premium, and incorporates a return order form, complete with room for an insured’s approving signature. The EMU will fine-tune the point-of-purchase mailer and then turn the successful program over to CSRs to continue.

Potential endorsement candidates include increased coverages for condo-units, replacement cost on contents, HO coverage form upgrades, increased employee dishonesty coverage, etc.

4. Personal insurance shoppers. Start a shopping service to help busy executives and others to obtain high-value insurance protection for their homes, cars, life and income. These buying services already exist in the retail world for gifts, groceries, wardrobes and more. Their top selling point is attentive personal service. EMUs can adapt this proven concept to bring in major commission sales and executive referrals.

5. Catalog of insurance services. Use EMUs to test the waters for selling routine PL or CL agency services for a fee. Replacement cost surveys, video inventories, driver safety courses, fire rate and business income reviews, and software training can all be sold as stand-alone services, where you, not an insurance company, set the price.

6. Resurrecting the dead. If your office is like most, you have file drawers packed with cancelled policies. EMUs can use varying approaches to resolicit your agency’s lost PL and CL accounts.

7. Workers’ compensation audits. Your commercial lines EMU can generate fee income or compete for new or lost business by conducting detailed experience modification reviews, classification and payroll analyses, and more.

8. Private-label programs. Invent your own competitive advantage. Let an EMU bundle target-specific agency services with standard insurance contracts to create and test market unique agency “package policies.” [See this column in the May 3, 2004 edition of Insurance Journal for how-to details.]

9. Premium financing. An EMU can set up an agency-owned premium financing operation using a commercially available turnkey software system.

10. Payroll-deduction. EMUs are the perfect teams to test the waters for employer, association and other personal lines programs.

Alan Shulman is publisher of Agency Ideas (www.agencyideas.com), a subscription-only sales and marketing newsletter. He is also the author of the 1001 Agency Ideas book series and other P/C sales resources. He may be reached at (800) 724-1435 or by e-mail: shulman@agencyideas.com.

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