There is a lot of conversation today about the changes in themarketplace when it comes to insurance distribution. We seeenormous advertising budgets, overwhelming messaging to theaudience, a focus totally on price and saving money, and conductingbusiness in what is soon to be a nanosecond. The question for usindependent agents is, “How in the world are we to compete in thisever-changing and increasingly ‘noisy’ space?” The shortanswer may very well be, “We shouldn’t!”

It’s amazing how many agencies we observe are prospecting andapproaching sales today the same as in the pre-Internet era. We arecommitting some cardinal sins in the way we go about the day-to-dayoperations that are making success so much harder, while at thesame time practicing for a game no longer being playedeffectively.

If you’re a traditional agency and trying to compete in thatspace along with the other “fray,” rather than being a trustedadviser managing insurance programs (not selling policies) andproviding valued advice to your clients, then there are somedefinite obstacles before you.

Consider this:

1. We try to get noticed in an environment where our competitorsare spending north of $6 billion in advertising!
2. We try to appeal to a buyer that sees little or no value inwhat we are offering.
3. We allow our competitor to set the rules of engagement withlittle dialogue, a focus on savings, and a free “no obligationsquote” in seven minutes or less.
4. We become part of the “commoditized” insurance game we cannotafford to play.
5. We accept an order for the desired request from the buyer,rather than truly selling the products we have available to us.

Let’s explore these observations in detail below.

1. The spending: The spending in marketing is incredible.Watching the industry go after what many agencies view as theirleast attractive customer leaves incredible room for thosediscriminating clients and prospects. The discriminating prospectsvalue advice, have assets and equity and therefore something tolose, and have a high regard for the professionals in their lifethat provide direction. These types of prospects have actuallygotten easier to access; there are fewer companies pursuingthem.
2. The value: It’s time we look for clients that valuewhat the independent agent is all about -- relationships! They’llspend more for the advice and counsel, they have more lines ofbusiness to insure, they spend more hard earned cash protectingwhat they have accumulated and they tend to be more loyal and lessprice sensitive.
3. Free quotes! Really? The average agency spends from$100 to $300 on a small account in acquisition costs. Just how manyfree quotes can we afford? If you want to be viewed as the leastvaluable and lowest common denominator in the consumer sales chain,just keep that up! Of course, there is an obligation and anexpectation of doing business together when you evolve intocustomized insurance solutions for specific client problems andconcerns. Set a new rule of engagement that includes providingsolutions and added value to those you serve.
4. Commoditization: When the focus is on speed and price,there is little value provided by the agency. Another problem isthat many go about this effort at the worst possible level ofinefficiencies. If you have a call center and can process hundredsof calls an hour, maybe you can do it efficiently. Most agenciesspend time in dialogue learning about the prospect, their needs,their problems, and what a better relationship would look like,helping qualify and build relationships. Then they fall flat by“taking” the lines or coverage given to them, rather than having aholistic approach to insurance solutions. We cannot afford toinvest this time unless we’re selling every possible line orbusiness. Focus on being “less inefficient.”
5. Order up! The old days of a counter with the “gals”sitting there to take the orders of those who fell through theirfront door are long gone. Today’s successful agency sells multiplelines of coverage to all members of the family. It’s aboutunderstating that we must generate every possible dollar of incomefrom every account. You’ve heard me say it before: “Deeper withfewer,” which equates to maximizing the revenues from eachrelationship.

In a world that sees increased competition, over $6 billionspent in marketing to the audience has automated the buying processand made the product available when the buyer wants to accessit 24/7/365. The traditional agency with a five-day,eight-hour working culture has to find another way to succeed.Having those discriminating buyers concerned about managing risk isour future.

Sit down today and make a list of the value added offerings youhave available to your current and future clients that justify whyyou’re in the middle and worth every cent.