By Jack Burke, president, SoundMarketing

During my years in the automotive industry, I was constantlydismayed by the short-term, 30-day mentality of the business.Manufacturers and dealers lived or died by their monthly results.No wonder the Japanese auto manufacturers made such dramaticheadway into the American market; they were looking not at 30-daywindows, but 20-year plans. 

Independent agents can learn from that historical lesson. Mostagencies still live in a 1-year renewal window.We feel successful when a client renews, yet we seldom look beyondthat renewal for the larger, long-term picture. Many agencies stillhave difficulty putting together a 1-year marketing plan andstrategy, let alone 5, 10, or 20 years. 

High-performing agencies engage in long-term strategic planning,while acknowledging that 3- to 6-month reviews and updates arecritical to their plan. They focus on strategies to attract newclients while never forgetting to take care of their existingclients. The days of approaching prospects 30 days before renewaland expecting to gain their business are gone, as is sending anautomatic premium renewal and anticipating a high retentionrate. 

Here are a few initial areas where we might beginlooking on a long-term strategic basis:

Related: Read “6Agency Structure Survival Tips“

 1.    Communication 

The Internet continues to change the way we do business, yetmost agencies spend $10,000 every 4 or 5 years to “update”their web presence and don't think about it in between. If theInternet had existed in the 1960s, do you think Toyota managementwould have taken such a cavalier approach to it—or would they havebegun brainstorming and strategizing how it could benefit them inthe years to come?

Some agenciesare still questioning whether socialmedia has any benefit for them. Maybe you are alreadytesting the waters with one or two of the more popular sites likeFacebook or LinkedIn, but we need to explore beyond today's socialmedia to get a feel for what may be trending into the future.

2.    Client Nurturing 

It's all about what you're doing for your clients today andplanning to do for them tomorrow. An occasional newsletter won'tcut it anymore. For instance, many in our industry breathed a sighof relief when the Affordable Care Act deadline was moved forward ayear to 2015. Ironically, before that change, few agents werereally working with their clients to help them prepare for the 2014mandates and penalties. Unfortunately, many of those same agentsand agencies will now wait to third- or fourth-quarter 2014 beforeworking with their clients on the changes. 

A recent Thomson Reuters article found that “a40% non-deductible excise tax will be levied on insurance companiesand plan administrators for employer-sponsored health coverage tothe extent that annual premiums exceed $10,200 for single coverageand $27,500 for family coverage.” This so-called “Cadillac tax”doesn't become effective until Jan. 1, 2018. That distant date andthe high premium levels means most agents will ignore it for now.Yet because the average family plan today is about$20,000, it is highly likely that it could easily surpass the$27,500 level in 5 years, and a 40 percent non-deductible tax is ahuge burden. Best practices agencies and agents are alreadybeginning to work with their clients to devise strategies to avoidsuch penalties, while keeping decent coverage for their employees.Are you doing anything with this, or is it too far into the futureto worry about it?

Related: Read “5Steps to Engage With Social Media“

 3.    Client Involvement

This is  the most critical factor in strategicplanning. There is a lot of brainpower contained within themanagement teams of your best clients. Many of them have been doingstrategic long-term planning for a long time and they've seen thebenefits. Have you thought of engaging them as partners in yourstrategizing for the future? Have you considered the benefits ofasking them where they're going and what you can do to help them ontheir journey? Have you invited key clients to join in yourplanning meetings?

Or, like so many agencies, do you all sit around the conferencetable and determine what you think your clients want you to bedoing? If that's the case, you're betting your future onself-serving assumptions—and we all know how the root word “assume”breaks down.

4.    Recommendations 

I am not naïve enough to think that our industry is ready for20-year projections, but agencies can start with 5-year planning.As we work through the last quarter of the year, this is an idealtime to set aside a few days for strategic planning—preferably awayfrom the office and perhaps utilizing an outside facilitator. Ifyou agree, look at spending time on both your 1-year plan and5-year plan. You might not be able to project sales on a 5-yearbasis, but you can definitely begin looking at communication andInternet issues and begin budgeting for ongoing research anddevelopment in that area, as opposed to 4-year updates.

I also strongly urge you to engage at least three good clientsfrom different industries to assist you in the process. Not onlywill it help you, but they will benefit as well. Everyone likes tohelp someone—it makes them feel valued. That's not a bad feeling toengender when it comes to their renewals. Finally, don't rest onthe laurels of your current “value resources.” Project where youmight need to expand those resources into the future.

Strategic planning might not guarantee survival and success, butas Dwight D. Eisenhower once said, “In preparing for battle, I havealways found that plans are useless, but planning isindispensable.”

Related: Read “SuccessWith Support“