While building a successful agency takes dedication and hard work, it may not be as difficult as you think. A wealth of material exists on the tangible factors and steps necessary for building a successful agency, such as product and service offerings, pricing, business planning, etc. But what are the intangible — and often more important — agency success strategies?
Consider what the following, 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 and services, price, quality service and dependability, people are the most critical success strategy. A very frugal colleague of mine recently drove this point home with an experience outside of the insurance field.
My colleague was personally remodeling his home. The bill ran 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 by several weeks.
I was shocked, however, when my friend chose to pay more at the local hardware store. When I asked him why, he said, matter-of-factly, “Because I like them.”
His decision ran deeper than price alone when he revealed that 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 employees couldn’t find a product faster or for less. He said their honesty and integrity had won him over. He felt he had a contract with his conscience that dictated he have the same integrity in deciding where to purchase the needed materials.
That 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 while building the agency, you’ll experience much success.
2. Your customers must always feel right — even when they’re wrong
A Nordstrom story provides an excellent example of this truth. Many years ago, 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, the sales associate nonetheless issued some type of refund or store credit, satisfying the customer.
Granted the example is extreme. However, the underlying principle stands: For long-term prosperity and patron loyalty, a customer must always feel right, even when he or she is wrong. Every customer is important, so ensure that you and your people always make each person feel important.
Follow Nordstrom’s lead when creating a customer service charter. You can’t put the onus on 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. The reality is problems will arise.
The problems aren’t the challenge. The challenge is responding effectively, because the responses help determine an agency’s 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.” However, few agencies validate that assertion with training.
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 is puzzling how many companies invest in their infrastructure but don’t view their personnel similarly. Many insurance agencies invest large sums in the newest customer relationship management software or glossy marketing collateral, but don’t invest in their people. Yet 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. That example clearly supports the value of training. Yet companies continue to claim they can’t afford training in the face of the overwhelming evidence supporting its return on investment.
Rather than asking, “Can we afford to train our people?” I would ask, especially during the current business climate, “Can you afford not to?” The potential benefits far outweigh the dollars required.
Benefits include 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
Selling the agency to customers is critical to long-term success. You must always reinforce in your customers mind why they are choosing your agency, and why your agency is the best choice.
Don’t become complacent just because a customer has been with the 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 agencies do? They employ the find ’em and forget ’em practice. That is, once agencies win a customer, they focus on securing new ones rather than keeping those they already have.
That practice can prove costly — and potentially deadly — to an agency’s long-term viability. Customers chose an agency with good reason … don’t ever let them forget that.
5. Continuous marketing
This tactic is born from selling the agency to its customers. How does your agency reinforce its position in its customers mind? Strategies could include a monthly newsletter, quarterly mailings, customer focus groups, special appreciation events or a monthly phone call.
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 he or she remembers it; 12 to 18 times before digging deeper; and 18 to 24 (or more) times before making an inquiry.
So whether it’s an advertisement in a trade publication, a direct mail piece to a brokered list or simply a letter to prospects within the agency’s own database, frequency and consistency are key to converting potential customers into paying customers. How frequently are your agency’s products and services are “in front” of potential customers?
6. Word of mouth
This is a gold mine for generating new customers. Research shows that customers are often 10 times more likely to share a bad experience, rather than a good one, with friends and associates. That doesn’t mean they won’t rave about an agency’s performance. It means an 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. Once you receive those testimonials, use them liberally.
Do you have a set practice and timeline for revaluating customers’ needs? Simply because a product or service is right today doesn’t mean it will be right next year, or even next month. Ensure that your agency is routinely learning about its customers’ ever changing needs. Doing so demonstrates an agency’s professionalism and reinforces why the customer is doing business with the 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 help and serve customers. If it’s not, it won’t take long for customers to learn they bought a product and service they didn’t need and/or couldn’t afford, which will undermine the goodwill that has been developed.
8. Partnering with other businesses that share common clients
This strategy is obvious, but many businesses don’t employ it. Customers with specific demographics need specific products and services. An agency should find out what products and services those are, and 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.
Roy Chitwood is an author and consultant on sales and customer service. Phone: 800-488-4629. Web site: www.maxsacks.com.
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