3 Common Strategies Found in the Fastest-Growing Independent Agencies

By Chuck Blondino | December 19, 2016

Over the past several years, despite some dire predictions, the independent agency channel overall has held its own against other distribution channels. In a recent internal research study, for example, Safeco Insurance found that the distribution of auto insurance by channel was virtually unchanged from 2010 to 2015.

But that’s only the headline. While most agencies aren’t growing at all, some are growing like gangbusters. Safeco recently completed a study of the 2,000 largest agencies in our nationwide channel, and one of the findings was stunning: policies in force for the 240 fastest-growing agencies increased by a whopping 26.7 percent in 2015, growing nearly twice as fast as they did in 2013.

How is this possible? What is their secret? We decided to find out, so we surveyed the 240 and received 193 responses. It turns out there’s no hidden formula, nothing they’re doing that other agencies can’t adopt in some way.

There are three things that came up repeatedly among these fast-growing agencies — things every independent agent can do to drive growth in the coming years.

Remember: your most salable product is you.

Every single one of the 193 has done at least one of the following:

They hired part-time marketers. Fifty-two percent of the respondents to our survey hired a marketer, most starting at only four-to-eight hours per week. These marketers organize community activities, manage referral program details, and write content for blogs, social media, and newsletters (print and email). They also track the effectiveness of these varied tactics, ensuring maximum return on your marketing investment.

They added new producers. Thirty-eight percent brought on extra people to go out and find the new business. This strategy maximizes producers getting out of the office, making connections, and driving repeatable referral resources.

Agency principals became the marketers. Some 10 percent of agency principals decided to do the marketing themselves. The decision to work less in your business and work more on your business is first and foremost a culture shift. It may require you to give up being the number one sales person in the office, so you can focus your attention on overall growth instead of individual sales. But doing so will enable the agency to grow faster.

While our findings indicate that any one of these three strategies will drive growth for your agency, hiring a marketer takes the least amount of change and has the greatest chance for success because you’re paying someone to do the tasks you don’t have time for today. On the flipside, becoming your own chief marketing officer is a great way to start easing out of the day-to-day and looking at the bigger picture.

Of course, marketing is a profession and ramping up can be daunting. In Safeco’s Customers for Life program — which helps independent agents build stronger client relationships, raise retention, and generate more referrals — we have found that it’s much more effective to invest in relationship marketing rather than brand marketing.

The ROI on brand marketing is difficult to track, while referral programs, newsletters, e-newsletters, and testimonial requests are proven to drive an average of three-to-five times more referrals and increase retention by an average of 1.5 points.

The agencies who are flourishing in this climate are combining the above tactics with digital or online marketing. The path that leads to your doorstep is increasingly made of bits and bytes — search engines, review sites like Yelp, and social networks like Facebook and Instagram.

The key to success in digital marketing — as in all marketing — is to be as human and authentic as possible in your storytelling. Remember: your most salable product is you.

About Chuck Blondino

Blondino is the director of Agency Capabilities and Programs at Safeco Insurance.

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Insurance Journal West December 19, 2016
December 19, 2016
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