Planning for Uncertainty

The traditional business plan includes short-term and long-term goals and projections. But, how do you plan when you can't guess what will happen? Some things are shifting faster than you can keep up with, while other things can drastically change based on politics. Part of the reason for our current economic challenges is due to short-term thinking. Traditional business planning is becoming obsolete.

However, if a business abandons long-term planning it has no direction and will be totally reactive and not proactive. The focus on short-term trends will cause a business to chase after opportunities, instead of creating them.

So, what is a business to do in these uncertain times? The key is to develop a plan that has both a flexible foundation and scalable systems.

Consider the typical insurance agency. It would have various lines of business; personal lines, commercial lines, group benefits, etc. Some agencies might have several niches like construction, retail, D&O, etc. These business segments are the foundation of the business.

The business segments can be considered as something closer to long-term goals. It is easier to predict that health insurance is currently uncertain, while personal lines seems stable at this point. The key to long-term planning is to accept that one or more segments might not perform in the future. The agency needs to plan for flexibility between departments.

Regarding insurance agencies', if health insurance sales drop off significantly, how can those resources be redirected to other lines? Or, what options are available to decrease overhead? It is important for a business to add or delete segments of business as trends change. In most cases, these trends would take about five years, plus or minus a couple of years.

Create a Scalable Plan
Once these segments are identified and trends established, the next steps is to create a scalable system. A plan needs to be established to grow or shrink each segment of business based on current trends. Let's assume the contractor's niche is shrinking. What can be done to increase sales in the other niches? Scalability means to plan for increasing or shrinking a segment of business based on demand.

A scalable business is able to increased revenues while the ratio of cost to revenue is less to deliver than current ratio. In other words, the cost of growing is far outweighed by the resulting profits. A scalable business is one that can take on new clients without increasing workload.

Businesses will always have operating costs, but scalable businesses try to keep low their variable costs -- or the costs incurred with each customer they gain. A business that follows a scalable model will not have its cost per customer increase, even if it gains 100 customers overnight.

Insurance Sales and Business Building Ideas

Four Insurance Business Building Keys

1) Retain Current Customers

It takes five times as much time, money, effort and energy to get a new customer as it does to retain a current one. Current customers are your foundation and the first step to building a business is keeping that foundation firmly in place. You keep that foundation in place by regularly communicating with customers, delivering top-notch customer service, and overall making sure your customers are extremely happy with you and the service you are providing. You should be asking, and otherwise surveying customers, on a regular basis as to what they like and what they think you can improve upon. When you do speak with customers, let them know you appreciate their business. Never take customers for granted or let your service slip.

Do what you can to build a personal connection with customers. Send thank-you notes, cards on special occasions, and find other ways to add that special touch and let customers know you care. We know that people do business with people they know, like, and trust, and in fact, studies show that 97% of people list that as the number one reason for doing business with a particular company. It's simple, before a friend leaves you for a better price or perceived better service, they will at least pick up the phone and call you.

Note: I realize there may be some customers you don't want to retain and that's fine, just make sure to remain professional and above-board. You don't want to tarnish your image or give anyone any unnecessary ammunition against you.

2) Review Coverage

Not only is reviewing coverage on an annual basis the right thing to do for your customer, it can also provide the opportunity to increase coverage and add other items thus adding premium dollars. Of course you only suggest increasing coverage if it is necessary, never in an attempt to simply increase premium and make more money at the expense of your customer. In addition to opportunities for more business, reviewing coverage helps ensure that both the customer and you are covered in the case of a claim, as most complaints come from inadequate coverage and a lack of communication.

3) Inquire

Studies show that the average policy holder has 6-7 policies while each agency has only 1.5 of those policies. During your annual review and other conversations with the customer, you want to inquire about other policies the customer might have that you can get.

For over 20 years I had my auto policies with one agent, my home-owners with another, and several other policies in other locations. This was due to several reasons, but it is clear that I am more the rule than the exception. Not once in that twenty-year time frame was I asked by any of my agents about other policies I had elsewhere. Not once. If they were trying to get rid of me, I would understand however, due to the fact that I have never had a claim, pay my above-average premiums in full with the first invoice, and am otherwise a good customer, I can only assume that they are missing the boat. If someone has a home-owners policy, there is a very good chance they at least have an auto policy or two. It's as simple as saying something along the lines of, "By the way, if we bundle your auto and home-owners I may be able to save you some money. Can I simply give you a quote if for no other reason than to keep the other guy honest?" With one or two simple questions during each review, it's entirely possible to double your business.

4) Pursue New Business

This one is pretty self explanatory and should go without saying. In addition to adding new customers to your current base, you will occasionally have to replace customers that die, ones you decide to let go, or ones that leave for some other reason.

Insurance Marketing Agency Outsourcing Versus Internal Staffing Models

For most insurance agencies, brokers and wholesalers, it's unlikely to internally staff up on all their insurance marketing initiatives. This is as true for insurance organizations as it is for most businesses, especially those between $1 Million and $50 Million in revenues. Some might refer to this as the SMB market. Businesses of this size may lack a sufficiently large marketing department to cover all the skills needed for a comprehensive marketing program. Consider that an insurance marketing plan can incorporate many and varied marketing activities. For example, in any given year, once a marketing plan is created, an organization may wish to embark upon an organic search engine optimization initiative, helping their website rise to the top of the SERPs (Search Engine Result Pages). Or they may wish to build an opt-in email list and offer an educational webinar series to their targeted prospects. In fact, any of the following elements may be needed, and many of these types of marketing activities require highly specific and sometimes highly technical skill sets:

    PPC ads, Banner Ads
    Insurance eMarketing
    Insurance Newsletter Distribution
    Blogging, Vlogging, News Releases
    Insurance Social Media Marketing
    Insurance Website Development
    Web Seminar Marketing
    Contact List Generation, eMail List Generation
    Insurance Telemarketing, Appointment Setting
    Client Testimonials and Case Study Creation
    Insurance Agency Lead Generation Programs
    Organic Insurance Search Engine Optimization
    Insurance Agency Video Creation (and YouTube video)
    Insurance Web Marketing Plans

These are just some of the marketing activities agents, brokers and wholesalers might utilize in their marketing efforts. There are also many traditional initiatives such as print advertising, association marketing, sponsorships, etc. How can an owner, manager or agent determine if they should internally staff a position or outsource the position? An easy ROI is based upon the marketing activity and frequency of the activity. For example, let's say they want to increase insurance agency leads, and opt to send out two webinar email campaigns per month and run a webinar as the Call to Action for the campaigns. Further, let's assume they want to do this every month for a year. If it costs $60,000 per year to hire an eMarketing manager to do this, versus $20,000 per year to outsource it, it's an easy decision. However, if the goal is to run six webinars a month to various target verticals, with 12 eMarketing campaigns per month, then it could become a closer call, as the outsource costs may begin to approach the internal staffing cost. Makes sure both costs are evaluated as fully burdened costs (outsource should include all infrastructure while internal staffing costs should include health benefits, expenses, and related overhead).

Take the same approach with Search Engine Optimization and insurance websites. Would a full time developer and organic Search Engine Optimization specialist be needed to create and update your insurance agency website, or do you simply need a new website with periodic updates. Today there are many good options for new insurance websites that include Content Management Systems (WordPress, Joomla, etc.) allowing businesses to use nontechnical resources to make most of their own website changes. Agents should review their goals, create a marketing plan (a possible outsource), and determine the ROI of staffing versus outsourcing for their specific marketing initiatives. This is often an iterative process, not a one time annual event.

Techniques for Finding the Best Insurance Sales Leads

When looking for cost-effective and superior insurance sales leads, consider the fact that:

1. Selling a product to someone who is neither interested nor ready to buy is a pretty tough prospect.
2. A great deal of time is spent looking through databases, hunting down lists, and trying to figure out which prospect service is worth the money.
3. It is quite a task to find people who are ready to buy now.
4. An awful lot of time is spent looking for good prospects instead of pitching them.

Many people have spent money on lead generation services where prospective customers provide their name and contact information in order to qualify for or receive a prize or giveaway. This kind of lead collection produces many cold prospects, because people are mainly interested in receiving a prize and not in the product.

The right insurance sales leads are the surest path to bigger and faster commissions. When trying to sell insurance without decent sales leads, an inordinate amount of time is spent for very little gain. To find the best prospects, one should consider the following valuable information designed to help develop a lead system where motivated, ready-to-act clients are calling in, which will substantially reduce the need for making cold calls.

FAMILY AND FRIENDS

Start with family and friends. They may know someone needing this type of service, or can maybe suggest potential clients that would be open to listening to the information being provided.

CURRENT CLIENTS

Current clients may be the best source of leads. If selling multiple lines of insurance, talk with them about other policies that are available that they may be interested in.
At the end of scheduled appointments, ask if they have any referrals that might be able to use these services.

NETWORKING

Doing a good job of networking when out of the office can be tremendous. Never launch into a sales presentation in a social situation unless the other person has taken the lead, which will rarely happen. Contact them at a later time to keep business and social conversations separate.

JOIN ORGANIZATIONS

Joining community organizations will likely increase networking opportunities. If an abundance of insurance agents are already members, search for groups that have yet to be heavily infiltrated to avoid wasting time and money.

What to Look for in a Good Insurance Agent?

Insurance agent - does the word ring any bells? May be a figure of a relative or a person who pesters you to meet his monthly sales target comes to your mind. Or you remember a person who you rush to do last minute investment to save on income tax.

A good insurance agent is like a good doctor or a lawyer with whom you should have good relationship with. You never know when you will face an emergency needing the help of an insurance agent. Selling you an insurance product is just a very small role that an agent has to perform. As a professional dealing with insurance product, he can perform a very key role in securing your and your family's future, to plan for important events in your life such as your child's marriage or planning your retirement. Following are some of the important attributes you should look for in an insurance agent:

1. He should be a good educator

The world of personal finance is evolving by the day. Companies are wooing customers with newer investment products and sales gimmicks. A good insurance advisor is someone who should help you cut through the clutter and determine what your exact financial goals are and recommend products which should help you achieve those. He should be well informed about the new products available in the market, what are their key features, how safe or riskier are they and what kind of instruments do they invest in, so that he can provide you with insightful advice.

2. He should be the seller of products from multiple insurance companies

This way he will be able to provide you options and help you select the best product suited for your needs. If he sells products from one insurance company, then he would be more interested in getting you to buy that rather than determining which is the best one for you

3. Level of customer service

You insurance agent should facilitate your interaction with the insurer. He should be facilitating your premium payments, send you reminders when your installments are due and keep you updated about the status of your policy. In short, he should act as a single point of contact between you and the insurance company.

4. Help you in the claim process

Insurance claim is a very important process. Generally you go for a claim when you are in a distressed state such as death of the breadwinner of the family or a health insurance claim when someone in your family is hospitalized. Similarly you would need prompt settlement of your claim if you want to finance a planned event such as your child's education. A good insurance agent should assist you with this process, help you with the paper work and promote your case among the insurance company's officials. He should be your advocate to the insurer facilitating fast and apt claims for you.

Selection of an insurance agent is more important than selecting an insurance product itself, as a good agent will automatically assist you to plan your insurance portfolio. In addition to this, you should spend quality time and effort to plan your insurance portfolio with your advisor.