VOLUME 31
July 2016
ISSUE 7
As a benefit for the members of the Independent Insurance Agents of Iowa
Sponsored by Independent Agents Service Corporation
Your Trusted Source for Insurance Agents E & O
THE CONCIERGE INSURANCE AGENCY
Recently I got a call from my family doctor asking if I would take a brief personal survey regarding her services to me. Of course I
agreed, and a nice lady asked several questions about the type of service, timeliness and value I receive from my doctor. One of the
questions was, “Would you be willing to pay a little more for your doctor’s services if it included guaranteed time service and 24/7
service?”
Continued on page 2
CLAIMS HANDLING: SHOULD AGENTS BE INVOLVED? – LISTEN TO
THE CUSTOMERS!!
For many years insurance carriers have been asking, suggesting, and demanding that agents pass insureds directly to the carrier for
effective and efficient claims handling. From a logical standpoint, agents are representatives of the carriers through which they are
appointed. Eliminating a step in the process should speed the claims efforts; and allow the carriers to respond more quickly to the
needs of their clients.
Continued on page 3
FREEING PRODUCER TIME FOR CLIENT AND PROSPECT SALES CALLS
One of the greatest problems experienced by most traditional producers who become involved in the servicing and retention of clients as well as the adoption of new clients is that they work themselves out of the sales role due to their sales success. These producers are paid in the form of New and Renewal Commission or as Base and Growth Commission since they spend their time
with both prospects and existing clients.
Continued on page 4
HOW TO BUILD YOUR BUSINESS BY MARKETING THE SPECIALTIES IN
MONDAY MORNING MARKETS
Every agent bemoans the fact that they don’t have new and different products and services available to create a “stir” and bring new
customers to their door.
Monday Morning Markets is a new service available through George Nordhaus with the cooperation of Rough Notes (see
www.MondayMorningMarkets.com). To make new services and products available to any agency – at no cost – that will bring the
agency new customers – if they actually market the products instead of having them on their websites!
Continued on page 6
MONDAY MORNING “I” OPENER
Monday Morning Markets – Grab your Free 200,000 Population Territory Now
Announcing: The creation of the Monday Morning Markets 1600 agency territories. At long last the first national independent agent's organization to market insurance specialty converges and programs is available AT NO COST to 'first-in' agencies.
Link is on page 9
Continued on page 9
1
THE CONCIERGE INSURANCE AGENCY
-By Al Diamond, President, Agency Consulting Group, Inc.
Continued from page 1
The following week I had an appointment scheduled with my doctor and she told me she was considering becoming a
Concierge Doctor. She indicated that she could lower the number of patients she would see to give each patient all the
time they needed, but would have to charge an annual retainer to each patient in addition to the insurance reimbursements to allow her to do so without suffering from the decrease in patient count.
This is a new trend that has arisen in the medical world as the number of doctors diminishes, the demand for medical
services rises, and the insurance industry continues to stress the earnings potential of medical professionals. It is called
Concierge Medicine and it defines doctors who charge their patients an annual retainer outside of any insurance payments that is used to lower the number of patients seen by that doctor in order to provide the special attention that we
remember having from our medical professionals many years ago.
While I am not supporting insurance agencies charging fees and lowering the number of clients being served, the concept of getting services from an insurance professional akin to Concierge Medicine is appealing to a select group of the
insurance buying public who desire special treatment and professionals, whether protecting their physical well-being or
their assets.
The similarities between the medical profession and the insurance agency industry involve our common protection of
our clients’ well-being. We protect their financial-based assets and the doctors protect their personal physical assets.
Neither of us can assure that a fire doesn’t occur or that they don’t suffer a physical malady. But both of us will advise
them how best to protect themselves.
The similarities between the professions are strong but so are the differences. Both depend on scheduled maintenance
and both are also demand industries. But you must SEE the doctor in order to get diagnosed and treated. Too many
agents believe that they can protect their clients’ assets by only seeing them at initiation of the association and then the
insurance program is self-maintained unless there are changes made by the client. In fact, if we become APM or Concierge Agents, we need to actually SEE our clients often enough to assure ourselves that ALL of their assets are properly
protected.
Those visits may be simple “check-ups” or comprehensive “asset analyses”, but they are not done by phone or by mail if
you intend to maintain a strong personal relationship with the clients.
The Asset Protection Model of Relationship Selling (APM) is based on a strong grade of service to the clients through
client service attitudes and attention to the customers’ needs much different than that of your competitors. Many agents
already provide these special services to their VIP clients because of the importance of those relationships, whether or
not they treat their standard customers similarly.
Wouldn’t it be properly descriptive if you used the term, Concierge Agency to describe your treatment of clients when
branding or marketing your own business? How is a Concierge Agency different from their competitors?
1. A Concierge Agency always concentrates on the best interest of the clients even if it means that the agency
doesn’t write an insurance product under certain circumstances.
2. A Concierge Agency will form a close relationship with each client. The client will always speak to someone
who knows them, their account and their particular situation.
3. A Concierge Agency will shepherd the client through a claim, not just report it, because the agency knows that
claims are shocking and disruptive. They are the sole reason that the client needs the services of a professional
agent rather than buying insurance from a box or from a gecko.
4. A Concierge Agency will conduct rotating asset analyses to make sure that ALL of the assets of each client is
properly protected, regardless of who writes the insurance products.
5. A Concierge Agency will be in great demand because of the unusual grade of service provided but will limit his
practice only to those clients that value concierge-type services.
We encourage you to consider becoming a Concierge Agent to your VIP clients and to your intermediate clients through
the Asset Protection Model of Relationship Selling. Imagine only dealing with the top 20% your of clients, expanding
that base with clients of similar characteristics, staffing properly for maximum exposure and efforts that involve seeing
every client several times each year. To find out how to become a Concierge Agency through the Asset Protection Model, call Agency Consulting Group at (800) 779-2430.
2
CLAIMS HANDLING – SHOULD AGENTS BE INVOLVED? – LISTEN TO THE CUSTOMERS!!
By Al Diamond, President, Agency Consulting Group, Inc.
Continued from page 1
What the carriers fail to understand or acknowledge is the role of the agents in the client relationship that either cements
the clients to their independent agents or proves that, once sold, that the claims relationship is between the insured and
the carrier.
Over a decade ago we conducted a series of focus groups throughout the U.S. with the single intent of determining why
clients use independent agents. The results were telling because they were consistent at every location. And the results
were somewhat surprising.
The top two reasons that consumers used independent agencies were claims and variety of choices.
Participants suggested that captive and direct writers had limited choice of products and the customer was being sold a
product that might not quite suit them but was the only offering of the carrier. Independent agents, on the other hand,
were assumed to represent many carriers and had a much larger variety of choices of products and coverages as well as
pricing choices.
However, the greatest response achieved was with respect to claims handling. The majority of participants agreed that
insurance companies were most concerned with controlling their costs and this translated into paying as little as possible to settle claims. Consumers assumed that Independent Agents, by virtue of them representing many carriers, would
be more concerned over the well-being of the insureds, and would participate and aid the insured in the claims process.
The consumers assumed that their agents would be watching out for the best interest of the customer and would assure
proper treatment of the client in a claim. Conversely they equated captive and direct writing agents as employees of the
insurance company and under the control of the carrier in the claims process.
So the lesson we learned from our focus group is that the clients of independent agents believed that their commission
dollars were being used to market their insurance among many carriers and products each year to assure that they were
placed in the best insurance company and at competitive rates each year, and that ‘their’ agents would ‘watch their
back’ in the claims process to make sure they were handled properly, fairly, and equitably by the insurance company.
With that knowledge in mind, we are again reminded that insurance carriers have spent a great deal of time and effort
instructing their agents to simply pass claims directly to the carrier. The company is concerned over the time and delays that may be caused by agent interventions but have not fully considered the public relations and the relationship
aspect of claims on the client/agent relationship. The client is using the carrier, in part, because of the independent
agent’s involvement and recommendation. The good will of the agent is transferred to the carrier when a policy is sold
with the promise of fair handling in the event of a loss. The greatest proof of that only occurs when a claim is registered and the client is treated the way the agent has told him he would be treated. The agent should be side-by-side with
the insured telling him how the claim process will work, following up to assure the client of proper adjustment, and
prompt settlement. Unfortunately, most intervention of agents occurs when the client is already upset by delays or perceived problems during the claims process. By omitting the agent from the claim follow-up process the carrier has virtually forced the client/agent relationship to be defined by the complaints and problems occurring in a claim rather than
by the smooth claim handling occurring with the client’s agent at his side to assure him.
We strongly urge independent agents to listen to the words of the clients when they tell us that the care of the client by
the agent in the course of the claim is a primary reason the customer uses independent agents and a real positive motivation to continue to be insured in the independent agency network of carriers.
Al Diamond is the President of Agency Consulting Group, Inc. a national consulting firm for independent agents in the
U.S. and brokers in Canada and the author of the PIPELINE, a national newsletter of agency principals in continuous
monthly publication since 1987. Al can be contacted at [email protected] and through
www.agencyconsulting.com (800 779 2430).
3
FREEING PRODUCER TIME FOR CLIENT AND PROSPECT SALES CALLS
Continued from page 1
The problem producers face that causes agencies to lose the sales capacity is that if successful producers spend their
time visiting existing clients for retention, they reduce the amount of time available to prospect and build relationships
and to sell insurance to new clients. Traditional producers work their way out of new business production and eventually spend most of their time retaining the book of business they have created while selling only on occasion when referrals are sent their way.
Agency Consulting Group, Inc. has developed a software product called the PROSPECTING SUITE consisting of integrated modules designed to help producers identify the amount of time available for prospecting
after existing customer maintenance, calculates the minimum account size requirements of prospects based
on the producer’s annual compensation expectations, and identifies the producer’s prospecting capacity and
potential revenue generation. For more information click here or call Agency Consulting Group at (800)
779-2430.
Many traditional producers work their way out of a production role and into an Account Executive role while still referring to themselves as producers. They certainly remain valuable to the agency since agencies are built by a combination
of retention and growth. However, if the producers aren’t replaced and supplemented with new sources of clients, the
agency’s growth stabilizes and then deteriorates as the client base ages out. Once a producer has left the stage of regular production aimed at growing the agency’s book of business, it is very difficult for them to regain the “fire-in-thebelly” that motivates true producers to face the challenge of making friends and building trust relationships with new
prospects on a regular basis.
Unless the agency is lucky enough to have hunters in their midst, producers who prefer selling to servicing, as owners
or producers, the life cycle of the business is defined when the producers’ books of business are large enough that the
producers are financially comfortable, and when the producers’ time is spent primarily dealing with service and retention-based duties rather than new business production.
Three things can be done to change the cycle and activate growth in an agency;
Add young producers every few years who are hungry and are writing younger clients to re-invigorate the agency’s
client base as older clients die, leave or sell their insurable businesses.
Reduce commission rates for existing producers if their books of business are decline.
Relieving the producers of the lowest levels of their clients on an annual basis to provide them with the time to prospect for new agency clients while releasing them from servicing responsibilities of their smallest accounts.
Adding Young Producers
Young, inexperienced producers can be a challenge to some agencies. They require as much as three years of investment as they succeed and learn the trade. During that development time, these producers should be validated with activity based production goals. Agency Consulting Group can assist you if your agency needs to build a new producer
validation program.
Option Two – Paying Higher Commissions for More Profitable Producers and Lower Commission for Regressing Producers
Agency Consulting Group’s Producer Compensation Program creates an incentive-driven compensation model for producers who grow the agency’s books of business. By tiering compensation, the most successful producers are paid
higher commission levels as their books of business become more profitable to the agencies. If a producer cannot grow
their book by a minimum percentage each year, or if the book of business deteriorates, their commission rate is reduced
from standard producer commission levels toward the commissions paid to Account Executives. A PRODUCER is expected to grow the agency’s book of business annually. If a book of business declines, the motivated producer will
spend more time building relationships and generating new clients for the agency to reinvigorate the growth of the book
of business.
Under the dynamic compensation program created by Agency Consulting Group, Inc., an employee’s commission rate
can change as their role changes, in support of growth and/or retention.
Option Three – Buying Down Producer Books of Business to Release Time for NB Sales
The third option occurs when producers are frustrated by their client load but would devote more time to sales if given
the opportunity.
4
FREEING PRODUCER TIME FOR CLIENT AND PROSPECT SALES CALLS
Continued from page 1
The agency may help these producers most by “buying” their lowest level of clients – the clients that take the producer’s time for an annualized commission insufficient to grow the producer’s compensation level or the agency’s book of
business. The agency offers to take over the servicing and retention responsibility for the producer’s lowest level of
accounts to provide the producer more time to spend on sales calls to businesses not yet insured by the agency. Typically, these accounts make up a very small portion of the producers compensation but releases an inordinately larger
amount of time that the producer may use for sales calls to prospects. A variety of options exist for continuing compensation including shifting commissions or paying the producer a one-time fee to give up these accounts.
Occasionally producers are paid renewal commissions for accounts for whom they offer no services and do not visit nor
maintain a relationship. Giving producers on-going commissions for accounts for which they perform no service puts
the agency in a precarious position since there is no incentive or reason for the producer to give up these accounts in
favor of new sales. They sold the account years previously and the account is retained or leaves based on the grade of
service provided by the administrative employees of the agency with no intervention by the producer.
If the accounts are referred to a new or to another producer for relationship management, commissions on those accounts may be split for the first year to accommodate the conversion without negatively affecting the producer. In
some cases, the agency has given the producer twice the compensation that would be earned for these accounts to
prompt the producer to release the accounts.
Whether you choose Option 1, 2 or 3, the importance of activating producers who will grow the agency’s book of business cannot be sufficiently stressed.
Al Diamond is the President of Agency Consulting Group, Inc. a national consulting firm for independent agents in the
U.S. and brokers in Canada and the author of the PIPELINE, a national newsletter of agency principals in continuous
monthly publication since 1987. Al can be contacted at [email protected] and through
www.agencyconsulting.com (800 779 2430).
5
HOW TO BUILD YOUR BUSINESS BY MARKETING THE SPECIALTIES IN MONDAY
MORNING MARKETS
Continued from page 1
Imagine having the availability of over 800 specialty programs in your agency! Most agencies who are registering for Monday Morning Markets are doing so because it’s a FREE way
of attracting new prospects to the agency’s website. Any search for any of the specialty markets will return your agency’s website as a source and the reader can review the specific specialty market. If interested, the viewer can click through to your agency and ask you questions and purchase the specialty program through your agency – and this service is AFTA
(Always-Free-To-Agents)!
But the smartest agents are actually driving lists of prospects for selected specialty programs
within their marketing area and are creating Target Marketing Plans to use the specialty markets to penetrate a customer base who would otherwise never contact the agency.
Here’s how the marketing program would work.
First, it’s important to realize that a marketing program is not equivalent to a marketing letter.
Sending out a single marketing piece to folks who have never heard of you is a waste of your
time and money. After all, they are likely already insured (perhaps in a special program or
perhaps just by limited ordinary personal or commercial products) and they may either have a
long term relationship with their current insurance provider or they may be an insurance orphan (our favorite target). If they have a long term relationship with an agent, a single letter
from an unknown agent will not impress them into action. If they are an ‘orphan’, they are
probably suspicious of anyone trying to “sell” them something and will likely not respond to
an initial mailed or emailed solicitation.
So how does a marketing “program” work differently?
A marketing program is a multiple touch (the best multiple is four to five) program per year
over a multiple year duration during which the prospect hears from you two to three times as
often as they hear from their current provider. And hearing from you has much less to do
with getting something in the mail than it would to do with providing you the excuse to
MEET the prospect.
Tell me if I’m lying – none of your best clients have never met with you. For the most part,
your best clients either were or have become your friends because of your interaction and relationship built around their insurance program.
MONDAY MORNING MARKETS gives you the products to create the excuse for meeting and
creating relationships with new prospects!
And, most importantly the introduction of your agency through MONDAY MORNING MARKETS is not the final result – it’s the beginning of a process. You would be a foolish agent,
indeed, if you sold a new customer a single product (like specialty coverage) and didn’t pursue every other line of insurance that the client needed to properly protect his assets
(physical or financial)!!
6
COMPETITION
COMMODITIZATION VS. DIFFERENTIATION
WHICH WILL PREVAIL? IT DEPENDS ON YOU!
Continued from page 1
So we teach agents to evolve a four-five step multi-year marketing program, with personal
visits following every informational contact. It uses products that are targeted to the client
(like specialty coverages for special needs) to create the opportunity to build a relationship
that will mature into a client, with several lines of insurance provided by our agents.
The end result is a steady flow of new clients, very busy producers who are tuned to the special needs of specialty markets but who reach out to provide for all the insurance needs of
every prospect with whom a relationship is being built.
It’s just an added benefit that MONDAY MORNING MARKETS bears no cost to the agents
putting it on their websites. Every agent selected is given an exclusive territory of around
200,000 population base; but there is no limit to the territory that can be marketed by participating agents. Many specialty coverages list several programs that may fit the client’s needs.
However, the sponsoring programs have one-minute video overviews and more extensive videos produced by George Nordhous; with the sponsoring program manager’s themselves explaining their specific program. And the Monday Morning Markets agencies are the passthrough recipients of the business (and commissions) driven by these sales.
Whether you choose to simply upload Monday Morning Markets on your website to control
your marketing territory (no other agent will be able to have Monday Morning Markets once
your territory is occupied). You can actually build a marketing program around a limitless
number of specialty markets that become available to you; we encourage you to follow this
link www.mondaymorningmarkets.com to learn more and to see if your territory is available.
7
8
MONDAY MORNING:
Monday Morning Markets – Grab your free 200,000 population territory now
ProducersHosted by
George Nordhaus of AgenciesOnline
Continued from page 1
Announcing: The creation of the Monday Morning Markets 1600 agency territories.
At long last the first national independent agent's organization to market insurance specialty converges and programs is available
AT NO COST to 'first-in' agencies. George and Al explain how SMP's (G.A.'s, wholesalers, program managers, et al), also on a
'first-in' basis, will provide PKV's (Product knowledge Videos) to MMM-registered agencies to be added to agency websites as well
as used as marketing tools for specialty coverages, which comprise over one-half of all P/C premiums. First agency responders
(you?) will have access to over 750 coverages, (from the Rough Notes Insurance Marketplace) right on their website.
http://www.agenciesonline.biz/blog/monday-morning-markets-grab-your-free-200-000-population-territorynow
9