It was more than a decade ago when I first began collectinglittle plastic tags for my keychain. It wasn't a conscious decisionon my part; rather, I got swept up in the “warm and fuzzy” feelingI got from becoming a “member” of whatever retail store I wascurrently in.

Read Rick Gilman's previous column, “Tumblr: Theright combination?”

The pitch was mostly the same: “As a member, you'll receivespecial offers and be eligible for discounts that 'regular'customers don't get.” And most of the time, it was free. For some,like the big bookstore in the mall, there was an annual cost, butthe discounts I received on the books I was already buying wouldmore than pay for the nominal fee.

These kinds of membership programs were not that new at thetime, but there began a movement to include barcodes on the creditcard-sized proof of membership, which, in actuality, gave the storemore information about my buying habits than I could imagine,making the whole prospect far more favorable for them than forme.

The keychain tags came into use when stores realized thatcustomers lost or forgot to keep the cards on hand. By having theinformation on a keychain, odds improved that they would have thecards wherever the customers went. My first card was fromWalgreens, then Borders–and I can't remember what else because itexploded with tags from three different pharmacies, two bookstores,two pet food establishments, four grocery stores, and so on. I nowhave 21 keychain tags, which even for me is a bit much. But now,thankfully, I don't even need to carry them anymore. All the storeneeds is my phone number and up comes my information and applicablediscounts.

Commerce by the letters

This is a clear example of taking a pure transactional exchangeand making it something more. All of a sudden, I'm receivingmailings, coupons, informational flyers and a little extra customerservice when at the store. My relationships with these retailersare more than seller and buyer; they moved to inquirer/decisionmaker and resource.

E-commerce came about as a means to an end. It was about theefficiency of the transaction and purchasing what I wantedeasily.

As technology advanced and cell phones and personal digitalassistants (PDA) combined to create the smartphone, commerce tooadvanced–from electronic to mobile commerce (m-commerce), which wasdefined by buyers determining where and when they would want toengage in a financial transaction. And “online shopping”transitioned to “on-the-go shopping.” It started with smartphoneswith browsers, then became better through the development of mobileapps that improved the experience and made the shopping transactioneven easier.

In the last few years, social media began to erupt on the sceneand mobile apps like Foursquare (see my September 2010 column, “Anew game in town”), Yelp, AroundMe and too many others to name.These have come to define the conduits through which socialengagements occurred. Most often they involve restaurants, shoppingmalls, stadiums and other places where commerce happens.

Retail as social commerce

At the same time, some online stores attempted to bring similarexperiences to those shoppers that stayed at their computers. Forexample, Mattel Toys created a “Shop Together” experience wherefriends can browse, shop and share in real time together in asimilar manner that the gaming industry has made multiplayer onlinecompetition possible.

In another example of enriched shopping experiences, inpartnership with Facebook, Amazon.com has taken its famous customerintelligence algorithms whereby it's able to make suggestions ofother books that people have purchased that have similar buyinginterests to you, and made it even more personal. Now it makesrecommendations based on what your Facebook friends have bought.Not only is this a much more intimate experience, but you now havean identified book club of your friends.

You might remember that a few years back, a jeans company cameout with custom-made jeans, individualizing the fit. Now it's notthat unique, perhaps no more so than having custom-made dressshirts or suits. But an online clothing store has taken it one stepfurther. ModCloth has created a “Be the Buyer Program” that engagescustomers to help select the styles that will lead to what dressesare manufactured and available for purchase.

All of these creatively new opportunities are what has come todefine “social commerce” (s-commerce). It's taken that oncemundane, purely transactional event and unshackled it from thestore. It has moved shopping from a linear back-and-forth,buy-and-sell process to a community experience, where much morethan an exchange of goods or services is made.

It's about businesses earning the privilege to offer theconsumer the opportunity to buy. It is no longer enough to justhave what people want; you must have it when, where and in a mannerthrough which they want to engage with you.

Insurance applications

Companies can compete more effectively with s-commerce intoday's environment, especially on products that are consideredcommodities. Independent agents understand this challenge perhapsbetter than most. In the current soft market for commercial lines,personal lines business offers an enticing revenue alternative.When you consider that independent agents are only capturing 34percent of the personal lines premiums, with the remainder going todirect writers and captive agents, you can see the significantpotential.

Of the estimated $460 billion in property-casualty premiumswritten in the U.S., 50 percent is from personal lines and only aone-third market share is coming through independent agents and thecarriers they represent. That leaves approximately $150 billion inpremiums on someone else's table.

Yet when I talk with agents about the potential revenue fromhomeowners, personal auto and umbrella, among the objections I hearis, “It's a commodity business, I can't compete on price.” Whatthat tells me is they are thinking with a '70s and '80smindset.

An April 2010 survey on marketing tools used by agencies showedthat electronic marketing methods are replacing more traditionalones. The survey of American Insurance Marketing & SalesSociety members found that roughly 60 percent of respondents areusing social networking sites for business purposes and reducingtheir dependence on more traditional media, including Yellow Pagesand mailing-list brokers. Three quarters of the 60 percent havestarted using LinkedIn; nearly half are using Facebook.

With the speed of change happening in the realm of social media,it would not surprise me to find these numbers increasing. Socialcommerce is not just for product sales; it's for relationshipsales, and who knows more about building relationships thanindependent agents.

S-commerce for agents

Have you ever thought about creating an iPhone app for youragency? Check out the Toy Lounge for very reasonable custom-madeiPhone apps for insurance agents. A basic app is only $1,250. Thecost of entrance is cheap. You can include RSS feeds from yourblog, information about your agency and services, connection toyour website, Google map for directions, etc.

I'm sure you support local clubs and sports teams; perhaps youdevote staff time to Habitat for Humanity. What about using Twitterand Facebook to talk about the efforts of the group? Run contestsfor staffers who accomplish something for the community andpublicizing the winner. It's socially based activities, discussedover social media and doesn't talk about insurance, but sure doesposition your agency as a champion in your town.

Remember, this isn't your father's insurance agency nor are yougoing to grow your business by going after your father's customers.But you never know; the largest growing segment of Facebook usersare 65 years old and over.

I understand that part of the challenge of going after personallines business is that more often than not, they're single policybusiness; your goal is to get prospects to walk in the door easily.For that, I'll leave you with these two thoughts.

First, if you don't “ask” for the business, you'll never get it.This can be the biggest barrier to building your PL business andone that involves making sure your staff is trained to understandhow to “sell” and not just “serve.” The more comfortable therelationship between your staff and your customers, the easier itwill be to have those conversations. I really believe that thebetter you use social networking, the better your prospects andexisting customers will know you.

Second, by its very nature, social media is about promulgatinggood and bad feelings, no matter what they resulted from. Word ofmouth is the greatest force behind the success or failure of anybusiness. In the world of social media, that word of mouth islouder and faster than it's ever been. Be sure you are part of thatconversation while it's taking place.

For more information on how to build your share of the personallines market, visit www.personallinesgrowth.org.