Independent agencies boast a long history and culture of being highly effective at sales. However, that competency isn't always matched in their marketing efforts or the agency-technology decisions that are made.

To remain competitive, agencies must now do two things. One, they need to leverage the data they are already collecting via their agency management systems and turn them into new opportunities by using the right marketing software; and two, they need to take a hard look at the technology they're using—including their agency portal, the hardware (and software) producers use, and the tools that streamline the agency's processes.

Is your agency website a few years old? If so, it's probably time for an upgrade. Do you have a mobile app? If so, what does it offer? And are you using e-signatures? What is your marketing strategy? These often-uncomfortable questions are among those that must be asked by agencies of varying size. The marketing-strategy question, in particular, is one that can no longer be ignored.

"For decades, we've relied on the inherent characteristics of the independent channel to add value to the customer experience. Customers are less convinced," says Michael Jans, CEO of Agency Revolution, a Bend, Ore.-based firm that specializes in marketing platforms for insurance agencies. "Agents can't simply rely on the carrier segment to create value. They have to vigorously find ways to add value at the agency level."

With the independent agent channel's struggles with market share and rivals entering the marketplace, a written marketing plan is vital, adds Jans: "This is urgent. There are serious competitors gunning for business. The complacency that the independent-agent channel enjoyed in the past is dangerous in this environment."

In most agencies, he explains, marketing is haphazard and chaotic. In order for marketing to be effective, it must be systematic, "and the only way you can systematize communications that deliver the right message to the right people—thousands of customers and prospects—at the right time is through technology."

"What I hear from our customers is that they like to be with an agent and an agency that is spending the money to be relevant to them," says Stanley G. Logan Jr., an agency principal at Logan Lavelle Hunt Insurance Agency LLC in Louisville, Ky., and a member of the PIA National board of directors, representing PIA of Kentucky. Logan's firm is in an ongoing "aggressive growth phase"; he'll tell you he doesn't know any other way to characterize his business. But he echoes a sentiment familiar to many an agent.

"When I talk to my insurance company partners, they are interested in sales. That's still the No. 1 game in town, and they want more and more from us," he says. Having the right tools to do that job is the edge that forward-looking agencies can enjoy, if they're willing to do the homework.

Keith Savino, a principal with the insurance agency Warwick Resource Group LLC in Warwick, N.Y., is another big believer in putting the right solutions in agency hands. "Our industry needs to embrace these tools to buoy itself in a changing market," he says.

Savino's agency received the 2014 Excellence in Social Media Award from the National Association of Professional Insurance Agents. He sits on numerous industry boards engaged in technology, such as ACORD and NetVU, and has long been ahead of the curve when it comes to experimenting with new solutions. Warwick is on its third customer portal in the last 13 years, with a new one slated to roll out in a few months.

"I have to provide for someone the experience they're used to in retail or professional services," says Savino. "I want to make sure that what we can do in a brick-and-mortar world we can extend to other forms of media." That includes providing e-signature capability on all documents (a huge time saver, he notes); an agency portal through which customers can, among other things, sign in and view all of their policies across multiple carriers; a mobile-enabled site and/or app for smartphone and tablet users; advanced CRM systems for client nurturing; and videophone VoIP technology for use by its staffers at locations in New York, New Jersey, Connecticut and its West Coast offices.

Yet, for Savino, the word "tech" is almost anathema. He draws parallels to the "ice box generation" of his grandparents, who once saw the refrigerator as a technological advancement; today, it's an appliance to which no one gives any thought. "These are just communications tools. I don't see them as 'technology,'" he explains. "Some people don't even view smartphones as 'tech' anymore. I see it as a required part of business; I don't think of it as an advantage as much as a requirement. I challenge people to think differently about that." Think it's too late to change? Think again. This philosophy is from a firm celebrating 150 years.

"The big challenge is communicating your value to your clients," he continues. "The minute you stop offering a service because you will not implement new business tools, you're intentionally putting up a roadblock to a good customer experience."

However, no agency can simply build a new system and then assume the game is won. "If you don't continue to invest money on your infrastructure every day, it's going to get outdated really quickly," Savino adds. "If you never did any maintenance on your house for 30 years, never reset the pavers, never cleaned out the gutters, what do you think is going to happen? Technology wears out much faster than your roof."

Those using old agency management systems definitely need to upgrade, says Brian S. Cohen, an operating partner with Altamont Capital Partners in Palo Alto, Calif., and the former head of sales and distribution and chief marketing officer at Farmers Insurance Group. The "if it works don't fix it" strategy, he says, fails in today's insurance-distribution market.

"There are many cloud-based systems that allow agencies to do more with less—and most importantly, serve their customers the way they expect to be served in the digital age," says Cohen. "Agencies that have made the transition need to start aligning with insurance carriers that will fully support a modern agency-management system." If a carrier still requires faxes or other paper-based processing, he adds, agents should demand they upgrade—or look for other markets.

PORTAL POTENTIAL

The one essential conversation that needs to be had at an agency is the status of its web portal. How effective is it in serving customers, and how can it be used to reduce the number of hours spent on serving client requests that, if empowered by the site, they can easily handle themselves?

"Almost all agency web portals today are predominantly marketing sites that don't allow people to interact with the agency. They are one-dimensional," says Cohen. "They don't give an existing client or a potential customer a reason to stay on or navigate through the site."

The most important elements of functionality, he says, must be tools that provide value to visitors. For existing clients, Cohen explains, functionality should exist to enable self-service such as policy changes, claims assistance, or obtaining certificates of insurance. "Done right, the web portal acts as the 24/7 agency CSR and today people want to be able to interact with a business whenever and wherever."

For potential customers, the web portal must provide resources that will enable people to discover the agency when they are faced with an insurance issue. These include things like weather alerts and a checklist of "what to do" to protect your property before a storm. "In other words, agencies need to adopt a strategy that attracts or 'pulls' people to their website," says Cohen.

Jans notes that a constant stream of fresh and relevant content is critical for search engine optimization—the process by which the owner of a website improves its ranking on search sites like Google. Ideally, an agency should add new content weekly: "That means that the power to upload new content must be under the control of the agency," he adds. "You can't afford to put 'change requests' into a webmaster's queue and wait weeks for those changes to happen. You should be able to click in, make changes, and click out and have them saved.

"If you have multiple niches, you must have pages that speak directly to each niche," says Jans. "That way, prospects are more likely to find you on Google. Then, when they discover you, they'll trust you."

For any audience, the key element for a web portal today is mobile capability. Today, it's all about the smartphone, and every site needs to be able to provide a mobile experience.

"More and more people are using smartphones than computers or even tablets" in their interactions with insurers, says Logan. "They're so used to people going to their phones for the answers."

Logan Lavelle Hunt started using its own branded smartphone app, designed by goinsuranceagent.com, six months ago. A customer can log in through the app and, in the event of an accident, for example, pull up his or her carrier's claims department and upload claims information and even photos. Through the app a customer also can access links to their carriers, make billing inquiries and even access adjustors.

Jans agrees that the number of mobile visitors goes up every month. It's no longer a question of whether your site should be optimized for mobile, but rather, when this can be achieved.

"Almost everyone knows how frustrating it is to view a traditional desktop site on their smartphone," he says. "If that's what your customers see, you're delivering a negative experience. If that's what your prospects see, they'll delete it and find someone else."

An effective portal also cuts down on the amount of hours your customer-service reps spend servicing clients. Every agency knows that the many hours spent servicing clients is time that would be much better spent selling.

Logan's agency breakdown is 25% personal lines, 50% commercial P&C, and 25% benefits, handled by 60 employees in all: 15 are in sales (other than the five principals), and 45 are service reps. On a daily basis, half of the CSR's day is spent solving billing inquiries.

"It's astronomical how much we spend on billing issues," says Logan. Trying to connect them right to the carrier, and not be the go-between, is his continued goal. "We're doing a multitude of things [in order] to spend more time on account rounding and review. Right now, 70% of my revenue goes to service, 30% to sales. I'd like to reverse that in the next five to 10 years."

MARKETING-AUTOMATION SOFTWARE 101

Marketing-automation software provides the "human touch" for an entire agency's book of in-force business and its prospects.

"Every mature agency has a sophisticated system that manages its customer data: its agency management system," says Jans. Serious marketers will use marketing automation technologies to unlock the information that's in that system and turn it into thousands of marketing opportunities. "That's the shortest path to money," he notes. "Marketing automation is the fastest-growing category of business software in the world. The agent who integrates it with his management system will have an advantage."

Marketing automation software helps an independent agency attract new clients; convert prospects into customers; cross sell; and boost retention. Those results, he says, are why this new type of software is the fastest-growing category of software in the business world.

It works this way: Marketing automation software "reads" the mass of data that's locked inside an agency management system and turns that information into marketing communications. It helps agencies communicate with prospects and customers in ways that matter to the customer, not just to the agency (see sidebar, above).

The "human touch" is that communications are set up by the agency decision-makers, and are automatically delivered based on certain criteria. For example, an agency can set up communications to people who request quotes; customers whose policies are expiring in 90 days; customers who have a birthday or policy anniversary; and/or policyholders who have Auto but not Homeowners coverage, and so on.

Marketing automation can integrate with an agency management system, so data can flow back and forth from the system to the marketing automation portal (for example, an interface on the desktop).

Constant outreach that doesn't have to be completely initiated by agency employees is critical, says Logan. The customer has to know the agency remembers who they are.

"They appreciate being asked, even if a sale doesn't happen," he adds. "You often hear agents who say, 'The best customer is the one I don't hear from.' And then they wonder why they lose that person."

WANTED: A NEW MINDSET

The greatest enemy of technological advancement in agencies is the one thing agents don't have enough of: time. The agency principal has long been the salesperson, and then became the benefits guy, and now they're the tech guy, says Logan: "They don't have time to do the research, and implement it. It takes a lot of thought and time and planning to do it." His suggestion: Consider hiring an office manager who can take responsibility for many of these kinds of tasks.

"So many times, we take the top salesman and now we're making him manage as well," adds Logan. "It's no wonder you see so many agencies hit the wall. There are only so many hours in the day."

Savino says that agencies would do well to look at technology investments as a sales expense, and budget it that way— requiring a shift in mindset from the traditional model. "The right tech helps you acquire a client. If you're not apportioning any of these expenses to sales, you have to rethink that [equation]."

It's important, however, for agency owners to know why they're investing in new systems and tools, because what looks good to the principal might not be so appealing to the troops. Staffs can push back on new implementations. Know why you're doing it, and communicate that clearly.

Growing agencies have many moving parts; some are strategic, and some are tactical and task-oriented. All of those moving parts need to be synchronized. "It's one thing to be disconnected from the tasks," he says, "but don't be disconnected from the strategy."

One helpful tip Savino offers: Negotiate ongoing training for your staff, as part of the deal with the vendor, and take advantage of your user group. Then reward the team for attending them.

"What works for me, might not work for you," he stresses. Spend the time to decide which is the right vendor for you, don't just buy what someone else has. "Think about what you need, and you'll find the right vendor. There are a lot of creative people in this space, and the landscape is constantly changing.

"Foresight is very important in the insurance industry right now around operations," adds Savino. "If you keep your eye on the future, it lends some clarity on what you need to do today."

The Digital 'John Hancock'

The future of document delivery is going to be through customer portals and e-doc delivery, says Keith Savino, a principal with Warwick Resource Group LLC in Warwick N.Y., and a huge proponent of e-sign. The solutions he is implementing are for both internal and external business needs, and not always for insurance documentation.

Savino says most agencies hesitate to implement electronic signatures into their agency workflows because they either don't understand what an e-signature is or because certain carriers have pushed back or are bullish with the ones that they do use, and push them on agencies.

Using this mechanism has several practical advantages, however. It provides quick turnaround and digital confirmation that the customer really did receive a document, and that the client signed off on it.

As his agency has done for years, Warwick shares its experience with other agencies looking to try new tools. "Folks that told me two years ago that they would never use e-sign, now they're asking about it."

The value, Savino explains, is in the productive hours that are saved: "When someone spends 20 minutes on completing documentation or chasing a client, that's not productive time. Productive time is time spent interacting with the client. The more we get rid of the minutiae administrative tasks, the more time agency professionals can spend with clients. That's our goal: To increase the percentage of purely productive time."

Digital Marketing: A New Twist on a Proven Method

"Insurance was the fastest-growing industry after World War II. This was a sweet place to be, and if you could reasonably run a business, your agency would grow," says Michael Jans, CEO of Agency Revolution. "But those days are over. Competition is more fierce, and rivals are well-funded. You have to be a dedicated entrepreneur."

One such way to grow an agency is through marketing automation—a technology that is not new, but has been largely unavailable or useless to the insurance industry because data has been siloed in agency management systems.

But more recently, software is available to read the information in an AMS and automatically trigger marketing campaigns to individuals at the right point in time.

For an agency that has 10,000 clients, Agency Revolution identified 141 scenarios that can take place on any given day. And each of these scenarios requires specific marketing materials, with detailed language tailored just to the client's event.

Through data collection, the Agency Revolution platform triggers its marketing campaign. It's a pretty simple process, says Jans: Install the software, continue using your AMS through normal business operations, data is collected, the platform detects life-cycle changes and then automatically launches a campaign. Users are able to opt out or change any campaigns.

In this way, agencies can use technology to multiply value and meaning to clients, Jans advises. "Good marketing automation makes people feel that you care about them and represent the values of your agency," he stresses.

He recommends marketing automation for agencies that have $1 million in revenue and 10 or more employees. Such operations have the time and capital to invest in and adopt new technologies, he says.

Chris Dik, vice president at Knight-Dik Insurance Agency in Worcester, Mass., understands the value of digital marketing. This strategy has helped the agency grow its Workers' Compensation line from practically nothing and triple his WC commission in just the first year.

The Workers' Compensation market is unique in Massachusetts—it's the 44th cheapest in the country and there aren't a lot of players due to its high effort and low returns. But Dik viewed this as an opportunity.

About five years ago, the agency, which writes about $2.5 million in commission each year, decided to jump into the Workers' Compensation market with both feet. It branded a program called Workers' Comp Results, which has its own dedicated website and offers third-party services with the biggest impact on reducing premiums, such as reserve reductions, audits and HR support.

With help from agency interns, Dik builds data profiles—including experience mods, rating systems and current premiums—on these potential insureds from free and publication information from the state, and puts all of that information into an Excel spreadsheet. "We are taking the old way of marketing—of getting the data first—and then letting the system work," he says.

From there, Infusionsoft—a platform offering contact management, CRM, marketing automation and e-commerce—takes over. The software identifies certain niches that Dik wants to target for specific campaigns: Contractors or landscapers, for example, who are paying at least 10% more than their competitors.

The software pulls these names and their data, and sends out a letter that includes actual premium numbers and comparisons.

This language grabs the potential insured's eye, and from there it's inbound marketing, Dik says: "Ninety to 95% of my business is from inbound calls after a client receives those letters."

Infusionsoft automates the onboarding of new clients—across all lines, not just Workers' Comp. The software continues to send e-mails quarterly to potential clients, a programmed process so successful that Knight-Dik closes about three policies a month based off of marketing campaigns that ended four or five years ago.

Jan agrees with this strategy, and applauds the payoff: "How many times are you contacting your customers?" he asks. "Only at renewal? If the nature of your message is a Halloween cartoon with a picture of pumpkins—that doesn't add value to your relationship."

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