The reason that the personal lines has evolved into a mass marketed, commodity product is that commission rates in most states have made it impossible to support the creation of a personal relationship between an agent and his customer. You simply can not afford to visit a client's home to discuss his homeowners insurance. However, relationships are still being created and fostered in the personal lines insurance business. It is now up to the independent agents to re-learn the art of creating relationships in the same way that USAA has created them - by phone and with consistently strong service levels.
No, you can't sit around the kitchen table anymore. But neither does GEICO and that company along with USAA share some of the highest retention rates and customer loyalty in the industry. Why? The first and foremost reason is that clients of these companies FEEL that the companies care for them The CSR's are well (and consistently) trained in customer relations and customer contact methods. When was the last time that your CSRs were trained in customer contact methods? Have you EVER monitored a customer call and provided feedback to the CSR?
But the independent agent still has an "Ace in the Hole" if it chooses to use it. By virtue of the way the direct writers operate, their CSRs can not form personal relationships with their customers. Calls are rotated and it is unlikely that the customers will get to know a single CSR. Your employees are stable and local to your customers. They can form relationships with those customers and help cement the relationship between customer and agency IF they are trained and motivated to do so. This takes the place of the "kitchen table" relationships established by previous generations of agents doing personal lines business.
At this time of year, every agent is scurrying about trying to establish sales programs to attract new customers to the agency. But, as we preached in 1996, 1995, 1990 and 1980, THERE'S UN-MINED GOLD ALREADY IN YOUR FILE CABINETS (or computers, if you are transactionally filed). At one time, the additional revenues in your files was comprised of single policy accounts that have other insurance lines, but not at your agency. Many agents have spent years closing those gaps and soliciting their own clients for all lines of insurance. However, many more agents still disregard the establishment or re-establishment of relationships with their own customers.
Agents must stop having customers and begin having clients.
A customer buys an insurance policy from you. A client has all of his insurance needs satisfied by your agency. Most customers would become clients, if we offered them those services. This involves contacts with the policyholders not related to his renewal, billing or claim. Positive contacts by your producers to their commercial policyholders permit them to act as the clients' insurance counselor instead of simply a problem solver when the client can't get needs met within the agency. The evolution of a counselor relationship permits the client to think of your agency whenever an insurance related question arises. And, isn't that exactly what we're looking for?
A second source of GOLD in your files has been used by years by our brothers and sisters in the Life Insurance industry. The successful life insurance agents are trained from birth (in the industry) to ask every client for referrals to other prospects. It's not an imposition - It's not uncomfortable - It's not a 'hat-in-hand' approach - it is a standard part of their normal client contact. Why don't we do the same thing in the P&C industry? Every client, personal and commercial, should be asked for a referral once each year. Unless they are hermits, they all know many other individuals and business owners who could benefit from your services. The only reason that they haven't referred them to you before is because you haven't asked and the subject never came up in their casual conversations. Since we can't trust casual conversations, the best way to use these referral sources is to create a system in which we ask for the referral ourselves.
If you feel uncomfortable doing this, ask yourself why? Are you afraid that your service isn't good enough to warrant a referral from your clients? If so, you either have a self-image problem or you need to address your service weaknesses. Assuming that you are no worse than (and probably better than most) other agents, the discomfort is probably because you feel that you are imposing on your client. Look at the circumstances a little differently. If you were giving away $20 bills and you were only permitted to give one to a person, would you have a problem asking your client for names of others deserving of your gifts? Of course not! You know that you are providing something of value that is a benefit to anyone receiving it. Why not consider your services in the same light? Are you not well qualified in your field? Don't you know that many businesses are insured with firms who are not as capable as yours? If these businesses realized that they were not getting all of the insurance guidance that they deserved, wouldn't they be foolish not to avail themselves of your services? After all, it won't cost them more than they are paying now and they would get more value for their money, right? Under those circumstances, wouldn't you be doing your clients a favor by offering your services to their friends, as well?
Frankly, this is the mindset that all salespeople must have in order to be successful. We at Agency Consulting Group, Inc. enjoy asking our clients for referrals. Our clients certainly know how much value we bring to their agencies. Our mission is to bring those benefits to as many independent agents as possible. The best way to do so is to establish new relationships through existing relationships. We suggest that you establish an internal program for your commercial accounts department this year to penetrate at least 25% of your commercial accounts for referrals. Keep track of this Objective within your Tactical Plan and offer a reward for both the referring client (a gift as a token of your appreciation) and the producer (an extra $100 bill for converting the referral into a new client) for the additional effort. Print a list of all commercial customers, divide them into monthly subgroups and target a contact with that customer on the attainment of a referral. This could be your greatest source of new business in any given year.