NIA

National Insurance Agency, Inc.

Are You Asking for Referrals the Right Way?

Nov 4

Posted by admin in Business & Marketing | No Comments

Keeping the pipeline well stocked with new prospects and new opportunities is a critical prerequisite for sales success in the insurance world. For many producers, it means spending a substantial amount of time on the phone, cold calling prospects who may not even want to talk. This activity can be, at best, a necessary evil they would gladly trade for more time spent with their clients.

For a few exceptional producers, a well-stocked pipeline is a reality. They have been able to achieve a continuous, seemingly effortless flow of new prospects and clients, all while spending less time on cold calls. In fact, when they are on the phone, they are usually talking to qualified prospects who want to take their calls or, at the very least, finding themselves engaged in very intriguing conversations.

What is their secret? They have the ability to get a high percentage of their business from client and prospect referrals.

Making a simple request for referrals is one of the most commonly recommended and frequently neglected strategies for building business. Though a referral conversation is one of the most important conversations an agent can have, most pay little attention to it and miss valuable opportunities.

Often, agents find that their requests for referrals fail to yield good results, even from satisfied clients who are willing to give them a lead. Most do not consider the possibility of asking prospects for referrals, even prospects who turn out not to be good candidates for quality business.

Let’s take a look at why so many requests for referrals produce so few useful results, and how it is possible to have profitable referral conversations with both clients and prospects.

What you’re doing wrong
For starters, when agents do ask for a referral, they often simply ask for a name: “Do you know anyone else who would be interested in speaking with me about their financial plan?” or worse, “Do you know anyone else who is thinking of purchasing a life insurance policy?” If you put yourself in the position of a client or prospect who is being asked for referrals, it’s obvious that this is not really such a simple request. In order to respond properly, the client or prospect must think of another person and their business situation, guess that person’s potential level of interest, and predict whether the individual might buy — especially from this particular agent. No one wants to lose respect from a peer by sending them an insurance producer who will intrude on their valuable time. The potential risk to your client is that you will act in a less-than-professional manner and won’t have a sound business case for being there in the first place.

Insurance agents might not think they have asked for all that analysis, but the truth is, that’s exactly what they are asking a client or prospect to do. If people don’t thoroughly think through all these issues, they may fail at providing a referral, or else the referral will fail to provide results. Consider the typical responses to a referral request, which often sounds something like, “Not off the top of my head, but if I think of anyone, I’ll let you know,” or, “I’m not sure I can give you a name right now, but I’ll keep it in mind.” At some level, clients realize that your request for a referral is poorly defined, unrealistic, and carries a high risk of failure.

How to do it right
So let’s go back to those successful agents and consider a very different, yet exceptional, approach. The secret is in knowing when to ask for the referral and what to ask for. In the case of a client, the “when” is logically right after you’ve delivered your product, service, or solution and your client is experiencing the value they were expecting. At this point, your client should have a clear awareness of the value delivered and will have a correspondingly high sense of satisfaction. For a prospect, the “when” is the point in your diagnosis at which you realize they aren’t experiencing the issues you are able to address and you’ve suggested that they may not require your solution.

The “what” should focus on recognizing symptoms or indicators of issues similar to the ones you have been discussing or which you have helped your customer resolve. The questions you might ask include, “Have you heard others in your company talk about experiencing insurance coverage problems similar to those you are experiencing?” or, “When you speak with your friends or family members, does the issue of appropriately
funding a retirement ever come up, and if so, does it ever seem to be a pressing concern?”
When you ask the question this way, you are not asking the client to take a risk. Rather, you are asking them for a factual observation that does not require them to qualify and pre-sell the referral. You’re simply asking if they know of someone who has the same problems with which they presented you. When they do give you a referral, it’s your job to determine if the symptoms exist and if you can help provide a solution.

By using this approach, you are using processes and skills that are very similar to those of a doctor. In our research, we’ve found that the characteristics of an exceptional agent are similar to those of a good physician. Using this analogy, it is easier to understand why even a prospect might respond favorably if your request for a referral follows a thorough and professional diagnosis, even in those cases where you discovered the prospect didn’t need your product or services. Think about whether you might refer a friend to a doctor who made a great diagnosis and found that you did not need surgery after all, or uncovered an issue that is of great concern and is detrimental to your well-being.

When you take the time to conduct a careful diagnosis of a financial situation, both clients and prospects recognize that they are receiving value from the substance and style of your communication. They are far more likely to share names and will be confident that their peers and colleagues will not be subjected to a hard sales pitch. These names will also have a much greater probability of being the high-quality leads you need to create a rich pipeline and to expand a profitable portfolio of insurance business.

The Golden Rule of Marketing

Nov 4

Posted by admin in Business & Marketing | No Comments

Clients and prospects constantly need to be educated so they know and understand the value of your products, services, or practice. Plus, they need to know exactly what to do with this information, or they may never figure out what you want them to do.

Even you are great at your business and love what you do, if your clients don’t know about your enthusiasm, you’ll never reach the sales volume that you dream about.

You sell insurance. All of the details about what type of insurance you sell, who needs it, and why prospects and clients should listen to you should be included in all of your advertising and promotional material. You should have handy a report or booklet on how to save on insurance costs — one that could be used in a variety of marketing efforts — that you offer to clients for free.

In other words, teach your customer about your products and your firm. Teach them about your insurance offerings in general and how these products would be useful to them. You can even expand your educational efforts to include information on related subjects.

One of the most unfortunate marketing mistakes that agents make far too often is failing to let their customers know what is unique about their products or services.

If you are an independent agent and have looked at 10, 25, or even 50 insurance carriers, let your clients know this. They’ll be impressed that you’ve investigated and eliminated those carriers that don’t provide the value, support, service, or dependability you know your clients want and need.

What if your offerings solve three times as many problems as your competitors’ offerings? Your customer won’t know this unless you point it out to them.

Few businesses realize that, in addition to educating your customer, you must lead them to action — this is the key to successful marketing.

People need to be told exactly what to do to in order to fully benefit from your offerings. Therefore, every sales call, marketing campaign, or personal contact should make your case.

The average consumer wants and needs to be led. They want to know more about the products and services they are interested in, but will procrastinate if you don’t motivate them to move forward and make a purchase.

As you educate your customers and tell them how to buy your offerings, you’ll find much success.

Americans with Private Insurance Use Discount Retail Programs

Nov 4

Posted by admin in Business & Marketing | No Comments

Nearly 70 million Americans have used discount generic prescription drug programs offered at major retail stores across the country, say researchers with the University of Michigan C.S. Mott Children’s Hospital National Poll on Children’s Health.

But in a recent report, the National Poll on Children’s Health reveals it’s not just the millions of uninsured U.S. adults and children who retail stores claim the programs were intended to aid that are taking advantage of lower-priced prescription generic drugs — 47 percent of adults and 51 percent of children using these programs have private insurance.

While uninsured adults and children have used these programs at higher rates than privately insured Americans, the poll shows that they represent only a fraction of program users. In fact, only 17 percent of adults and 9 percent of children who use discount generic prescription drug programs are uninsured.

“The prices of prescription medications have reached a point now that we’re seeing individuals from all insurance and income groups looking for lower-priced options,” says Matthew M. Davis, M.D., M.A.P.P., director of the National Poll on Children’s Health.

“While these programs are reaching the uninsured, privately insured Americans still make up the largest group of adults and children using discount prescription drug programs, simply because there are a larger number of people in the U.S. with insurance coverage,” Davis added.

The National Poll on Children’s Health also found discount generic prescription drug programs are more likely to be used by adults with heart disease. However, adults with other chronic illnesses and children with chronic conditions use the discount programs at the same rate as patients without chronic illnesses. Of those polled, 25 percent with chronic illnesses report they did not use a discount generic prescription drug program because their medications are not available through these programs. 
 

Economic Uncertainty Presents Opportunity for Life Insurance

Nov 4

Posted by admin in Business & Marketing | No Comments

When you discuss life insurance with a client, a number of objections are likely to emerge. One of them — that they already have free or low-cost coverage through their employer — can be difficult to overcome. A skilled agent needs to highlight the importance of permanent insurance and the proper amount of coverage to convince the client to reach into their own pocket for more protection instead of relying on something temporary.

But in today’s economy, the “temporary” label doesn’t just apply to the nature of the insurance clients have through work; it also reflects the work itself. A lack of job security means that many jobs — and their accompanying benefits — are constantly in danger of being eliminated altogether. Clients who cannot be certain where they’ll be working in a few years also cannot be confident about what their benefits will look like at that time.

On one hand, those economic uncertainties create challenges for agents whose products compete with other essentials in a shrinking family budget. Even a client with job security and other insurance needs might find themselves unwilling to move forward with a necessary program. Writing a check for a large policy could take a back seat to other priorities, and decisions regarding coverage could be deferred to an unknown point in the future.

But the most successful agents often find opportunities alongside obstacles, and the current economic climate can provide plenty of both. Can agents overcome client concerns about the future by arguing in favor of adequate coverage? Can they help show prospects who are wary of new financial commitments the benefits of additional short-term and permanent policies? And in this economy, what are the best methods to increase a client’s peace of mind and an agent’s business at the same time?

Marvin Feldman, president and CEO of the LIFE Foundation, a nonprofit educational resource, said that losing work coverage is especially difficult for the millions who don’t have their own insurance policy.

“When they lose their group insurance, it really makes them go bare at a time when they need it more than ever, because if something were to happen to them at that point, there’s nothing for the family to fall back on,” Feldman said.

If an agent has clients in this situation, he advises the agent to be proactive and reach out to help clients make informed decisions and obtain the right amount of coverage. While money will be an issue for anyone with employment uncertainties, the low cost of term insurance makes it a viable stopgap solution for many who need sizable coverage at an affordable price.

Feldman also pointed out that even those who remain employed need to review and adjust the amount of coverage they have, since the term insurance provided through work is usually just a small portion of their annual salary.

“If you have somebody making $50,000 a year and their group term insurance is $50,000 or $100,000 maximum, they’re way underinsured to begin with, and they need to be supplementing that with some outside coverage,” he said.

Tony Franks, a financial planner with MetLife, is seeing a renewed interest in policies that replace coverage that ended when the prospect lost their job.

“I have been seeing my phone ringing a lot more because people are losing their jobs,” Franks said. “They still have families. They still have spouses that need to be taken care of.”

He said that price-conscious clients are also receiving advice from the media regarding the benefits of term insurance, so their interest may be heightened from commercials and other outlets that provide general advice.

While he said that term usually meets a short-term need, however, agents should make sure their clients are educated as to the pros and cons of different policies before settling on a solution.

Franks also said that supplementing term insurance obtained through work can have additional costs if the client goes through their employer to obtain that extra coverage. In some cases, the client pays a higher price as the insurer also needs to cover those in the group who are in worse health. As a general rule, Franks said that healthy clients should consider supplementing their work coverage with a policy on their own, noting that an agent can provide a lifetime of assistance and advice as opposed to the limitations of a human resources department.

Richard Koob, a Northwestern Mutual financial representative with 41 years in the business, agreed. He believes that it’s important for clients to control their coverage by obtaining policies independent of their work benefits.

“I always encourage people, even when they do have employer-sponsored benefits, to match it — to say, ‘I need to have some insurance in force that I control that is not subject to external circumstances,’” Koob said. “‘I control this, and as long as I am able to pay the premium I am assured that I have continual coverage.’” That way, he added, clients always have a policy to fall back on regardless of their employment situation.

He admitted that the public has adopted a general apprehension to making long-term financial commitments because of economic uncertainties. If an agent presents a comprehensive program that requires more than a nominal investment, they can expect the client to delay action for several months. Koob suggested offering a term policy to cover the client while they’re deciding on a more complex strategy. He believes that if the need truly exists, doing nothing will not only fail to solve the problem but could create more troubles in the long run. Term insurance, while not a long-term solution in those cases, will provide affordable coverage and help meet those needs. In addition, a good term policy with convertibility allows clients to obtain a more permanent policy without providing further evidence of insurability.

Dick Miller, a regional vice president with Pacific Life, also believes that term insurance can be a valuable short-term solution, but believes that agents should be adamant about the importance of a more permanent plan when appropriate.

“Too often, people depend on employer-sponsored insurance to cover them,” Miller said. “Insurance is something that should be considered valuable enough of an asset to be personally owned.”

Instead of considering another policy as a supplement to their term insurance through work, clients should consider their employer-sponsored program to be the supplement to their own more comprehensive program, he said.

Miller believes that agents should explain that insurance shouldn’t be seen as a simple expense, but a valuable asset with benefits that make it integral to a financial plan. He acknowledges that clients might be experiencing financial challenges that make implementation difficult, but agents should look for the best way to cover a client’s needs and create a foundation based on permanent solutions.

“In this current economic environment, where people are watching what they’re spending, term is probably, in some situations, a good answer,” he said. “But there are still other situations where permanent insurance can still be the answer today.”

Regardless of what path an agent takes in meeting a client’s insurance needs, experts agree that finding a solution and investing in the agent-client relationship is ultimately good for business, even if the early returns don’t fully compensate for the efforts. While the commissions generated from a basic term insurance policy might not sound enticing in the short run, Feldman encourages agents to be patient and take a long-term approach to their books of business. Those clients who begin with a simple term insurance policy can develop into consistent and profitable repeat business for an agent who takes the time to meet their early needs.

“That [term insurance] client could possibly grow into a very nice client over a long period of time,” Feldman said. “It’s the initial investment in time and effort that the agent has to make, and they’ve got to make that determination [whether] they want to do this. In most cases, it will probably work out.”

Miller also believes that a sound agent-client relationship will eventually become a valuable asset to both parties.

“The key is to make them a client, and have them build trust in your advice and your judgment,” Miller said.

“The type of product will become secondary to the quality of advice that you give them.”

Despite Economic Crisis, Almost Half of Producers Report Increased Business

Nov 4

Posted by admin in Business & Marketing | No Comments

Nearly 50 percent of producers reported an uptick in business and referrals despite the economic crisis, according to new research by LIMRA.

The survey of nearly 700 experienced producers, who focus on individual clients, was conducted in early November and found that about one-third think the U.S. economy will stabilize within one year. More than 90 percent of producers surveyed think their business in 2009 will be as good as or better than it was in 2008. In addition, producers reported that almost 90 percent of their clients made no changes to their financial portfolios as a result of the financial crisis, and 46 percent obtained new referrals during this period.

Similar to a study of consumers that LIMRA conducted, the survey found producer confidence in insurance companies was higher than all other financial institutions, including stock brokerage and investment firms, mutual funds, banks, and even ratings agencies and regulators. Consumers reported highest confidence in local banks and credit unions, ahead of insurers.

When asked what carriers could do to help the producers, the overwhelming response was better communication. They also said they wanted carriers to be more proactive in communicating the security of life insurance.

When asked about the actions they have taken, 85 percent of individual producers reassured their clients to stay the course, while nearly three-quarters provided their clients with information about the financial stability of a company or product. In addition, about two-thirds of these advisors suggested to some clients that this is a good time to invest.

In product news, LIMRA’s sales survey report shows that new annualized premium for individual life insurance dropped 11 percent in the third quarter of 2008. Variable life and variable universal life saw the steepest decline, with a 33 percent drop each quarter. And after seven straight years of considerable growth, universal life premium experienced a significant decline in 2008. Third-quarter premium dropped 12 percent over the same period in 2007.

LIMRA reported that term sales are holding their own, with new premiums flat for the third quarter.

Despite the decline of variable annuity (VA) sales, overall sales of individual annuities continued at a record setting pace in 2008, reaching $197.1 billion through the first three quarters, according to LIMRA’s “U.S. Individual Annuities Third Quarter 2008 Sales Report.”

While VA sales were virtually flat in the first quarter, second-quarter VA sales decreased 12 percent, and sales dropped 18 percent in the third quarter when compared with the same quarter from 2007.

For the first nine months of 2008, VA sales reached $122.0 billion, a decrease of 10 percent. LIMRA estimated that just over 80 percent of new VA premium went into contracts in which a guaranteed living benefit rider was elected, if available.

 

Health Care Reform Could Cost up to $1 Trillion

Nov 4

Posted by admin in Business & Marketing | No Comments

PricewaterhouseCoopers LLP (PwC) projects that President-elect Barack Obama’s proposed reform of the U.S. health system would cost the federal government $75 billion in 2009 dollars, the equivalent of $2,500 per newly insured person. The plan as it stands now
would extend health insurance coverage to 95 percent of all Americans, including two-thirds of those currently without insurance.

According to the report, approximately $25 billion, or one-third of the cost of the Obama proposal, could come from existing funding for the uninsured, much of which now goes to hospitals for uncompensated care.

Some of the key findings identified in the report include:

  • The reforms proposed by Obama are aimed primarily at increasing access to quality and affordable health care. Assuming full implementation of his plan in 2009, the budgetary costs would grow from about $75 billion in the first year to an annual total of $130 billion by 2018. The cumulative cost over 10 years would be more than $1 trillion.
  • Approximately $48 billion, two-thirds of the $75 billion, would be spent on covering the uninsured, according to Price-waterhouseCoopers’ analysis. However, not all of those who would receive subsidized coverage under the new plan would have been previously uninsured. PwC estimates that 4.5 million people who have health insurance today are likely to trade their current plans for the new government-subsidized plan proposed by Obama. According to PwC’s estimates, increased subsidies for the previously insured would represent approximately $27 billion of the $75 billion cost of the Obama plan.
  • Of the 30 million Americans who would be newly insured, nearly 40 percent would obtain coverage through their employer, a reversal in the current decline of employer-based coverage. Most of the gains in coverage are likely to come from small employers.
  • PwC estimates that 13.1 million previously uninsured individuals would obtain insurance coverage with the help of government subsidies, either in the non-group market or through Medicaid.

4 Ways to Integrate Technology Into Your Prospecting Efforts

Nov 4

Posted by admin in Business & Marketing | No Comments

4 Ways to Integrate Technology Into Your Prospecting Efforts Print E-mail
 
Written by Ted Stevenot   
Considering all of the new and transforming elements of technology today, particularly those technologies that assist in marketing communications, how does an agent lay the foundation for prospecting that makes good use of new technologies?

Whether your prospecting methods invest heavily in technology or rely on my tried-and-true methods, prospecting begins with an overall strategy or prospecting plan. Before getting started, consider these steps:

  • Know what you’re selling. Figure out which products you’re promoting. If they’re sufficiently different from one another, you may need a separate strategy for each product.
  • Know your market. Determine who buys the types of products and services you sell and where they are located. Create a prospecting list or target area based on your potential buyers.
  • Interact with the prospects in your market. Phone calls, meetings, seminars, trade shows, civic events, volunteer work, etc. Be systematic about your interaction. Have a schedule.
  • Collect useful information. Establish a prospecting database and use it to collect information as you interact with your prospects. Use the information you collect to identify new opportunities and improve your connection with current prospects.
  • Engage in leveraged outreach. Use a means of communication that is beyond person-to-person interaction to connect with prospects. Be systematic with your leveraged outreach. Again, have a schedule.
  • Assess and refresh your system. Add, supplement, or remove different types of outreach based on performance. Add new names to prospect lists, and set aside names you that are no longer viable. Study your statistics (e.g., response percentages, sales/contact ratios, etc.).

Once you have a basic prospecting plan in place, go back and think about which elements of the plan can be improved with the use of communication technology. Here are just four possibilities:

1. Interaction with prospects. When you’re communicating with prospects, set the stage for other types of technologically based communication. Promote your Web site and any other Web-based networking sites in which you participate. Reference helpful articles you have posted, and refer prospects to those articles. Ask for permission to send prospects an email, or invite them to visit your Web site and join your email list.

2. Collecting useful information. Use an email capture on your Web site to collect contact information from visitors who would like to hear more from you. Collect pertinent information that will help you follow up appropriately. Include a survey link that allows prospects to give you a window into their world. In doing so, you can identify particular needs or areas of interest for future contact.

3. Engaging in leveraged outreach. Add an email service provider (ESP) to your marketing mix. Prospects appreciate timely and pertinent information. Never send spam; only send emails with direct permission. Most reputable ESPs will guide you to information that will help you understand best practices and how to use their services within the law. Include links in your emails back to your Web site, through which you can provide detailed information on a variety of subjects. You can detail your products or services and the approach you take to risk management.

The beauty of an email link is that you can be very brief via a short email message, but at the same time be extremely detailed through the link.

4. Assessing and refreshing your system. One nice thing about many communication technologies today is that they are very feedback friendly. By using statistics programs provided by your Web hosting service, you can tell fairly quickly if your Web site is seeing more visitors. If you don’t know about statistics tracking, call your Web host. Most Web hosting services provide tracking software as a part of their service at no additional cost. Also, if you do use an ESP to send any email, you will find feedback information on how many emails were actually opened (called an “open rate”). You can also see if anyone to whom you sent an email clicked through to any of the links you included in your email, which should give you an idea of how relevant your links are.

Tracking those who click on your links can also help identify groups of interested prospects for targeted follow-up.

These items merely scratch the surface of what’s available today in terms of communication technologies that can improve your prospecting — but they’re a good start. Remember that “leveraged” communication is simply beyond what you can say person-to-person. Even a basic first-class letter can be a form of leveraged communication; technologically based communication is just another form of this. Look for ways to weave technology into your prospecting plan in order to help you more effectively bring your message to your prospects. In doing so, you will increase your reach and be better able to move your business forward.

An Agent’s Guide to Pitching to Executives

Nov 4

Posted by admin in Business & Marketing | No Comments

When you approach an executive with your provider plans and other services, four simple rules can help you sell more effectively and successfully:

1) Know everything you can, in advance, about the decision-maker, the company, and its needs; 2) Know how your services fit into those needs; 3) Know how your services compare with those of others; and 4) Determine, before your first meeting, what your “best bet” for making a successful approach will be.

#1: The preparation
You often hear it: Preparation is everything. Advanced planning is particularly useful because, in addition to providing much-needed information for your first contact with a company executive, it also arms you with an important aura of confidence. Carefully prepare for your visits with decision-makers by finding out absolutely everything you can about the company and the individual who leads it. This doesn’t mean simply going on the company’s Web site, because almost nothing provided there is useful. Effective planning instead means calling friends, acquaintances, and other contacts in the target company’s industry, those who can provide you with useful insights about the company’s structure, its recent challenges, and its goals.

#2: The fit
To successfully pitch to high-level executives, you’ll want to have something intriguing to offer them. That is, you’ll need to determine what plans would work best for their businesses and why. And you’ll need to be able to present these ideas succinctly (because CEOs don’t have time to spare) and interestingly. On the latter point, if you’re thinking of giving a flat, factual presentation, don’t bother. The first visit is the time for the relationship-building stage of the sales process. So, set aside your burning desire to simply pitch your products and make the sale. Instead, take this time to get to know the person you’re talking with on their level. For this to be a complete and successful sales process, the encounter must be a meeting of equals. Thus, a relationship must be formed that is based on a collegial bonding and an understanding that you’re both after the same thing — they are interested in getting the best services for their company, and so are you. You will need to walk away from this conversation with their being secure in that knowledge.

#3: The comparison
Uppermost in the executive’s mind is the question of how your products and services can be distinguished from those of others. Why is your health plan the best one available? What about your group long term care sets it apart from all the other policies? You will want to have a ready answer and even volunteer the information before they request it. It’s better to be seen as proactive when responding to an executive’s questions; try to avoid falling into the trap of simply responding to questions as they are fired at you. By providing answers and solutions that demonstrate you’ve done your homework and that anticipate the firm’s needs, you will have a better chance of gaining the executive’s confidence and being seen as being on the same wavelength.

#4: The best bet
Your earlier research on the CEO and their firm will already have guided you in determining what products will be your best bets. These determinations form your “operating hypothesis” as you enter the meeting. Test the hypothesis throughout the meeting as you continue your discussion with the executive. And be ready on a moment’s notice to bring out other products or offerings that, once the conversation has expanded, appear to be more suited to the company’s needs. Regardless of what path the conversation takes, make sure you leave the meeting with a sound understanding between you and the decision-maker regarding what their needs are and what products can satisfy those needs. As you are wrapping up the conversation, mention to the executive that you will send additional information on the areas they’re interested in both via email and by post or messenger.

Making a good impression sets you apart from other agents who will be talking to your employer client. It helps ensure that the executive will take your call — either for a phone conversation to clarify points, or for a second meeting to wrap up the deal. Following these four steps can help sway the outcome of a meeting with the decision-maker in a positive direction and help you close the sale in the end.

Dr. Billie G. Blair is president and CEO

Making Old Prospects New Again

Nov 4

Posted by admin in Business & Marketing | No Comments

Attrition – it’s an ugly word that conjures up images of irreparably wounded relationships, disappointments, and lost revenue. Attrition is typically thought of as an inevitable obstacle to growing your insurance practice. You must sell enough to compensate for those predictable losses and sell even more if you want to grow your bottom line. It’s a bit like the old saying, “Three steps forward, two steps back.”

Trying to sell enough to compensate for lost customers then selling even more to increase profits is the norm for most insurance agents. Not only is it frustrating, with estimated costs for acquiring new clients exceeding $1,500 each, it’s a pretty expensive strategy, as well.

Power up with information
Do you know how exactly many customers you have lost? It’s surprising how many business people just assume that losing clients is “a part of the business.” They react at the moment it happens, but soon the disappointment fades and the client is relegated to a back room file with a “that’s business” shrug. You have to acknowledge a problem before you can fix it. Get into your old records and take a hard, honest look at your agency’s track record.  

The average company loses 20 percent of its customers each year. If you have determined, or can determine, an average dollar value for each customer it’s not hard to figure out the amount of revenue that represents. You can even take that information to the next level and place a “life-time” value on each customer. How much revenue does a loyal customer represent for the lifetime of his or her business? This can be sobering information. It certainly shines a bright light on the value of customer satisfaction.

This isn’t the full picture, however. Loyal customers refer friends. But while you may score one or two good referrals from a happy client, a dissatisfied customer tells an average of 10 people.

Maybe it’s time to dust off those old file and create a plan for contacting the customers who have left you. Find out what the problem was. Some things, such as having to relocate out of your service area, are circumstances you cannot overcome. But other information is priceless. An issue that pushed a particular client into leaving may be annoying your other clients as well.

We are living in a business climate where most people feel they are little more than a number. This can be especially true in the insurance industry with its automated billing, forms, and notices. In an industry where people become numbers, just taking a personal interest and showing concern speaks volumes.

Obviously, fix and change what you can. If a problem is beyond your control, consider accumulating and passing on pertinent information to those in a position to make appropriate changes. As an agent you are the conduit between the client and the provider. We have all experienced the frustration of knowing there is a problem but feeling powerless to do anything about it. The research you conduct with customers who have defected gives you power to influence change and is invaluable to everyone concerned.

Hold yourself accountable
We are a goal-oriented species. Set a goal for how many clients you want to regain. Along with setting goals for recapturing lost clients, strive for 100 percent retention of your current customers. Remember, we seldom get more than we ask for. You won’t achieve 90 percent of anything if you’re willing to settle for 75 percent.

If you want to achieve 100 percent customer satisfaction, declare it. If you intend to regain 80 percent of your lost customers, take ownership of that goal as well. Write down your intent. Make it real. Writing down your goals literally impacts your neurology and enhances the likelihood your statements will become reality. But it is not a substitute for action.

As in everything, have a plan. Don’t wait for clients to defect before you listen to their concerns or randomly “deal with” complaints and then accept the fall out. Look for solutions. Show you care. Document what the complaints are so you can determine if there is a common thread. You may think a problem is solved, but that doesn’t mean your client thinks so. Create a short-term and long-term follow up strategy. It’s easier to keep a customer than regain one.

Keep in mind, a customer who has left you is not necessarily happier for having made the change. Let lost customers know you took their dissatisfaction seriously, and what you did or are doing about it. While you cannot necessarily change the policies of your underwriter, you can let unhappy clients know you took their complaint seriously enough to take it up with the powers that be. If it is an internal situation and you have addressed it, again, let the client know. Customers are especially impressed if you have actually made changes in how your agency conducts business a result of complaints (provided such action is warranted.) Don’t keep your responsiveness a secret. Let your clients know they matter to you. Even if you can’t change the situation immediately, genuine concern helps keep the door open for future communication.

So next time you are looking at where to start prospecting for new business, don’t overlook those files tucked away in a back room. That lost-customer file may look as useless as a pile of lead, but with a bit of prospecting alchemy you can turn that lead into solid gold.

Mitzi Crall, Ph.D. is a sales, marketing, and management consultant, speaker and, trainer.

Are Your Prospects Reading Your Emails?

Nov 4

Posted by admin in Business & Marketing | No Comments

Written by Michael Teitelbaum   

Eight ways to ensure consumers look forward to your message.Keeping in touch with customers has always been a key way for insurance agents to keep their clients and attract prospects. While many producers may equate email marketing with spam and dismiss it, it can be an effective marketing tool that provides a great return on investment.

According to a recent Direct Marketing Association survey, email returns $57.25 for every dollar spent — far more than traditional advertising or direct mail — while driving $7.7 billion in consumer sales and $8.8 billion in business-to-business sales. Email also has a number of advantages over traditional marketing methods — you can precisely target and personalize messages to recipients, as well as track detailed results such as open, click, and conversion rates.

The trick, of course, is to create emails that not only make it into your recipients’ inboxes, but that people actually want to receive and read. Following are eight tips for creating an effective email marketing campaign.

1. Personalize your message
The more personal your emails are, the better they will perform. An effective email message will address the recipient by their first name. More importantly, make sure your emails come from you by ensuring your name appears in the “from” line; no one wants to feel like an anonymous email address on a list of thousands who are receiving your message.

2. Review your opt-in procedures
Insurance agents thrive on local relationships, but unsolicited email can break down trust and loyalty. Make sure you have permission to send the email to consumers. An easy way to build an opt-in list is to present clients with an opt-in form while they’re in your office.

While obtaining permission, provide registrants with an expectation as to the frequency and content of your emails. Make sure your procedures for unsubscribing, changing an email address, and maintaining a user profile are user-friendly.

3. Grab their attention
The average person decides what to do with an email in just eight seconds. They can choose to open it, read it, delete it, or mark it as spam. To that end, your subject line should always honestly represent the content of your email — not doing so violates the CAN-SPAM Act. Be sure to keep it concise and include a call to action or brand name your customers will recognize. A good rule of thumb is that a subject line should be no more than about 50 characters long in order to avoid it being truncated by some of the most popular email delivery systems.

4. Provide valuable content
With every email you send, consider what types of information will interest your clients. You can use email to deliver information on insurance policies, details on new or expanded services, or tips on financial planning and products.

5. Don’t forget the fundamentals
Far too many emails are sent with grammatical, spelling, and usage errors. Typically, this happens when agents and marketing executives rush to get something out there when they should focus on quality; remember that every email is a reflection on your practice. Typos and misspellings can also very quickly land your message in spam filters.

6. Avoid blocked pictures
Image suppression, a safety net used by email clients to protect recipients from unknown senders, can be a major stumbling block to creating effective, readable emails. If you rely too heavily on images in your email efforts, chances are your message isn’t getting across. In places where you may typically use graphics, use HTML text instead.

7. It’s all about timing
The last thing people want to read on a Monday morning is a sales email. Some industry research indicates that Tuesday and Thursday mornings, roughly between 10 a.m. and noon, are among the best times to send your emails. Test different combinations to find out when your audience is most responsive.

8. If all else fails, ask
If you want to know whether customers find your content valuable, why not simply ask them? You can include one simple survey question at the end of each email or ask customers when they visit your agency and let the results dictate your future content decisions.