Enjoy the Freedom of Marketing Experimentation
Property/casualty agencies can learn something valuable from successful car dealers. And no, it has nothing to do with waxing and buffing. It’s something even shinier, the wisdom to experiment. Dominant dealers are renown for owning multiple dealerships that sell competing brands of vehicles. They do it because they don’t know for certain which car lines will be popular in the future, so they hedge their bets to ensure their survival. Agencies can do something similar.
In today’s down economy, more people than ever are shopping their insurance. Some consumers bypass Main Street agencies in their search for fresh policies because they believe that these contracts are too high-priced. Instead, they seek out the highly promoted national marketers, without giving the traditional local agency a chance. These behemoths base their direct appeal on perceived discounts and routinely tout “typical” dollar savings. Full-service agencies can do something similar with discount checklists under their current agency name. [See “Don’t Emulate How the Big Auto Insurers Sell,” in Insurance Journal‘s March 9, 2009, for details.] Another way to compete with these giants, and to benefit in other ways, is to follow the lead of the dealerships and initiate a second branded operation.
Start a Second Brand
Doing business under a second name gives you the freedom to go after specialty commercial lines, the low-end of the auto market, and anything in between. Check with your legal advisors and carriers for the best way to set up the brand.
As for marketing it, here’s one way to go. If you elect to compete with the direct marketers in personal lines, offer quotes by phone, e-mail and online only. This way, you can avoid the in-person traffic that’s associated with insurance shopping while using your present staff and office space. Your necessities include a P.O. box, a dedicated toll-free number, a quote-generating Web site, and some attractive stationery with a cool logo. Such actions, among others, help to wall off the nascent brand from your existing agency. Rent space and hire additional personnel only as needed. Plus, take full advantage of any service centers offered by your carriers. This way, the new enterprise concentrates on sales, leaving the day-to-day service to others.
With the second operation in place, you are able to test the effectiveness of virtually any sales or marketing action. For instance, because you don’t need prospects to physically stop by your office, you can stretch your reach beyond regional driving distances to the far borders of your licensing territory. If you are situated in a small town, you might solicit high premium personal lines contracts in the largest cities in your state (if your carriers cooperate). Essentially, you can solicit whatever policies you feel comfortable selling as long as they don’t generate excessive service and collection demands.
Another benefit is that you are free to experiment with new managing general agencies and carriers, new software tools, direct mailings and ads, plus trendy marketing tools like blogs, online videos, and more, without unduly risking your core reputation. And whenever you encounter an insured or prospect that is better served by your main operation, you can seamlessly shift them over when it’s to their advantage. You can also adopt any marketing and operational positives that you’ve learned from your explorations.
If the future of insurance commerce is online as some say, it means that agency offices don’t have to be open to the public. They just have to have an ever-contemporary Web site with the latest quoting and communication tools in place. Establishing a second brand allows you to develop this outlook without having to worry about the impact on your current client base. You can have the best of both worlds, online and off. This benefit alone makes it worth the effort.
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