ACG - Agency Consulting Group

The PIPELINE

A national monthly newsletter for agency principals dedicated to agency management topic

Points Of Differentiation

What makes your agency different from every other agency?

For most agencies, the answer is NOTHING. We sell the same forms of insurance as hundreds of our competitors for the same companies to the same prospects and clients. We hope we can quote enough that we find some prospects for whom we can save some money because quoting is all we have to sell.

If you live in a geographic area that has 500,000 people and you have 500 competitors between agencies, banks and direct writers (either local or available to prospects in your area), if no one advertised or marketed insurance, it makes sense that you would have 1,000 individual clients. If there were 10,000 businesses in your area, and 200 of those competitors write commercial lines, the percentage distribution would give you just 50 business clients.

But the fact is that agencies and companies do advertise, even if it is to say “We’re Better – Buy Insurance From Us!” So the field is not even and the distribution of clients is never equal.

Much insurance advertising is composed of LIES and exaggerations. Not all advertising lies. Many insurance entities, both agencies and companies, simply “exaggerate” or pose vague statements about their capabilities such as “lowest rates” in an effort to attract the consumers’ attention.

But the few “gems” in the insurance industry actually have points of differentiation that makes their products and/or services genuinely different and better than that of their competitors.

Do you need to be a great innovator or unique to have points of differentiation?

NO! You need to know your strengths and to be able to clearly communicate those strengths to your clientele and prospects. Of course, it helps if you choose to investigate and adopt new and creative ideas and products in the insurance industry that your competitors do not or have not used to serve their customers.

Let’s face it -- an auto policy is an auto policy. Yes there are some differences and even a few that can be relatively important differences, but we don’t always know what they are and how to point them out to our prospects. A BOP policy that you sell is pretty much the same as ones sold by your competitors. Yes, many carriers try to enhance their policies, but they don’t speak “human”, they speak “insurance”, so the differences, enhancing the forms as they do, are really innocuous to most end clients. Few provide coverage that the target market would find attractive in advertising because those coverages important to prospects would also increase the risk to the carrier and should affect the rates.

So if the personal and commercial policies are relatively the same and if the carrier rates are also relatively similar and transitory – sometimes you are low, other times you are not - what can we point out to our market as the DIFFERENCES between us and our competitors?

SERVICE:

What does it mean that we provide “better, faster service” anyway? Providing service should be a fixed term like having a safe airline flight. You either have a safe flight or you crash! No airline says that we were better than average in flight safety? They don’t advertise that they had a better flight safety record than 75% of their competitors. If they don’t have the top marks, they don’t mention it at all.

We should be satisfied when we can say that we provide a grade of customer service that is expected of us by our clients. That says a lot. However, how can you gauge yourself against your competitors? Are there any “measures” of customer service that defines you as “best”?

All of this is meant to discourage you from making claims about service just because it sounds good and can’t be disputed because no measures exist. One large company that measures customer complaints turned a 3% complaint ratio into a proud, 97% Customer Service Satisfaction ratio. As it turns out, that was the equivalent of 45,000 complaints per year. That’s almost 1000/week, 200/day, 25/hour!

If you have done something that you can prove provides a grade of service about which you are proud and can prove, then go ahead and use it as a point of differentiation. But that also means that you tell your clients exactly what to expect, such as “30 minute time service to return calls for client policy service.” And it means that you offer something tangible if you DON’T live up to your service claims such as “30 minutes time service to return calls or you get dinner on us at La Restaurant.”

INSURANCE PRODUCTS THAT COMPETITORS DON’T OFFER:

There is nothing wrong with being a generalist insurance agency. You can offer many different products to your clients. But as insurance products are created, do you and your staff learn them and use them in your marketing? Most agents don’t learn or understand new products until they are forced to do so by customer inquiries. Then, they learn by “doing.” How would you like to have a surgeon who is using you to “learn” a new procedure? Your producers should take the lead, learning and studying every new product that is offered by your carriers. As you become proficient, use those products to differentiate your agency from the myriad of agents who simply sell the same products for their entire careers.

NON-INSURANCE PRODUCTS AND SERVICES RELATED TO RISK MANAGEMENT

The differentiation of the insurance industry is coming from outside the industry as well as from the typical products offered. Risk managers and service providers are finding answers to risks to our client base that are not directly addressed by insurance products. One example is Compliance Check, a Florida-based company that teaches insurance agents how to put their business clients in compliance with federal regulations.

Whether you create difference in your agency through new and different products, new and different services, or customer service levels that you can quantify that will provide a grade of service different than that of your competitors, FIND THOSE DIFFERENCES. And if you have points of differentiation, tell your customers and prospects about them. No one else will “blow your horn” for you.

If you are among the majority of agents who have no points of differentiation, call us (800-779-2430). We will help you find the point of differentiation that you have but don’t recognize or we will help you jump-start your business and create new points of differentiation.

Make yourself different, then tell the world – and tell them frequently. You will reap the rewards of more than your share of the market. Everyone wants to be with a leader and innovator. No one wants to be insured with the “average” agents.