Don’t Let F.U.D. Extinguish Your Marketing Efforts

Overcome Fear, Uncertainty and Doubt in Agency Offices

In a recession, it’s an easy decision to stop promoting your agency until the economy kicks back into gear. But is it the right one for your business? Marketing hibernation eliminates the effort, expense and risk of an unsuccessful agency promotion while theoretically preserving cash for salaries and bonuses. However by avoiding new business solicitations, you risk the wrath of Newton’s first law of motion that states that an object in motion stays in motion and an object at rest stays at rest. In other words, if you smartly market your agency, you’ll survive this economy; if you sit back and try to live off of your renewals the odds aren’t as good.

Sales Inertia

Combating P/C sales inertia is essential, regardless of the economy. In boom times, one successful effort happily drives the next, while in times like these, suspending most new account solicitations has consequences beyond a stagnant book. As should be anticipated in a recession, your most desirable insureds will shop for better deals. Some will take off, leaving you with an overall lesser quality book and next to no new accounts to offset their departure. This classic case of adverse selection deteriorates your agency’s long term profitability. Furthermore, minimal marketing puts managers, producers and staffers in a non-sales mode which, according to Newton’s law, isn’t exactly going to turn on a dime when times get better.

Everybody’s Shopping

When jobs are at a premium and virtually every business has declining revenues, insurance shopping becomes the new national pastime. This means that agencies are getting to look at personal and business accounts that previously weren’t interested in comparison quotes. So essentially, bad times are a good time to market, at least in the agency business. After all, virtually every adult and business in the United States still needs to buy their insurance from someone. Try for your share, while watching how you go about it.

Look Three Ways

Invest your marketing time and dollars in three major directions: retention, recovery and new business. While most agencies routinely work to keep their largest accounts from jumping ship, they tend to neglect the many profitable insureds who file no claims and require virtually no service. Pay some attention to these guys, especially in this economy. Let them know that you don’t take their business for granted. Communicate via letter, e-mail, newsletter, or a blog. Suggest thoughtful ways that they can save on their premiums with you. Common auto examples include increasing policy deductibles, taking defensive driver courses, changing classifications from drive to work to pleasure use (if laid off) etc. The “let sleeping dogs lie” approach doesn’t fly when people are starting to panic. Desirable accounts may defect to other providers who give them more attention.

Next, deal with the recently departed who left your office for a better deal. These greener grass consumers and businesses may be surprised to discover that they were better off with you — but are too embarrassed to come back. So, invite back selected dead files with open arms and good humor. Don’t simply accept that once an account is cancelled that it is irretrievable. More clients will return than you think and at a greater percentage and lesser cost than soliciting a brand new prospect.

Finally, smartly invest in targeted new business efforts. Be creative, different and timely. Focus on leads where you have the best chance of success. Carefully identify the prospect groups that you wish to write and match them against your carriers’ strengths. Make certain that there are enough salable leads within each to make specialized solicitations worthwhile. There’s extra potential if you already insure accounts within a group and can develop viable referrals. Additionally, agents who market for new policies are rewarded with less competition, in virtually every medium, because so many advertisers are cutting back today. For in-stance, if you opt for print ads, you can negotiate a great rate in almost any publication.

Market or Else

P/C agencies exist for only one real purpose. And that’s to continuously sell insurance. If new agency-generated sales slow down to an intolerable level, additional agency-only carriers will consider going direct, at least to some extent. Like certain insurers today, they’ll become your rivals as well as your suppliers. Independents can minimize this scenario by using the state of the economy as a marketing motivator instead of an excuse to lay back. It’s really all up to you.