While other industries are driving billions of dollars of sales through their use of the Internet and websites, the insurance industry has floundered in its use of these technologies.
The notable exception is the web portals and quote machines that are in use by both the direct writers, many stock companies (who are acting like direct writers) and all forms of intermediaries (including independent insurance agencies). However, the pattern of insurance vendors, much more than most other industries may be dangerous to on-line buyers.
As an industry, the insurance industry can be analogous to the medical industry. You know that you need certain vitamins and minerals to keep healthy. You know when you have the symptoms of a common cold. We will buy the vitamin supplements that we need and the cold medications from the most convenient and/or cost effective vendor we can find. We do so under the assumption that the cold medications are generally alike and not harmful to us and may ease the symptoms we experience. We assume that the vitamins labeled the same way are exactly alike and we hope they represent the supplements we need to keep healthy.
Similarly, we all know we need certain types of insurance products to protect us from financial loss and liability. Many consumers assume that all common insurance policies are alike (because the “gecko” tells them that the only difference is the cost). They see Flo manning the shopping aisles of the Progressive “store” and that further tells them that insurance is a commodity only sensitive to price.
If the vitamin labels don’t properly represent the quality or potency of the contents of the bottle, if the cold medications don’t properly mix with the other meds you are taking or with your individual physical limitations, you may find a medical crisis awaiting you. If the insurance products that cost you the minimum price when you purchased it came from a B- rated company, doesn’t properly protect your assets, or leaves a nice big gap in coverage between primary and umbrella coverage, you may be at serious financial harm.
However, internet buyers don’t realize this and have been attracted to two things, the ability to get quotes on line in a short period of time without human intervention and the lack of perceived pressure to buy. So, while there have been millions of shoppers hitting the websites for insurance quotes, relatively few purchases are made on line and most of the successful purchases are uninformed acquisitions based on price alone.
DOES THIS MEAN THAT THE INTERNET IS NOT A VALUABLE TOOL TO ENHANCE THE BUSINESS OF INSURANCE AGENCIES?
Website development and Internet Marketing can grow your agency, enhance your productivity and cement relationships with the generations of young people who have grown up in an Internet World. And, no small number of us “codgers” have fallen in love with the expanded world that is defined by the Web and the technologies that have been built on its backbone.
But we are fast realizing that we will not build the Trusted Advisor role without building a relationship with the clients. That relationship can start on the Web but cannot end there. If all you sell is a quote and price, the client is not yours; he is loyal only to the lowest dollar.
So, if quoting on the Internet through your website is not the ‘magic pill’ that we hoped it would be, how can we use our website to build our business?
I’m glad you asked!!
You will build your business and make a lot more money in your insurance business in the long run if you consider your website as another specialist working for your agency. The difference is that this specialist will work 24 hours a day, 7 days a week and 52 weeks each year. Once you pay his initial fee, his running costs are much less than any other employee. He will never ask for holidays during your busiest times. Nor will he call in sick on Mondays or Fridays. He will do things EXACTLY the same way (your way) every time a transaction is done. He is not particularly smart but can follow your directions exactly and consistently and will know enough to refer appropriate questions to the smarter employees you have in-house in order to establish and maintain the excellent relationships with your clients that define the need and utility of insurance agents (and always have).
Imagine if your client wants to see whether he paid his insurance premium, the status of any of his policies (the two most prevalent reasons for calls to the agencies) and could play “what-if” games by changing his property, vehicles, coverage, deductibles, etc to see the impact on his costs. Imagine further that he could ask you any questions at any time of the day or night and you could either answer them immediately or, if complicated, when you or one of your more knowledgeable employees arrives at work during business hours. Imagine that your employees could work from any location and access all information (in a completely secure format) to conduct business on your behalf. Imagine them having access to all data and all documents in your customer files and system at any time from any place – totally controlled and secured by you (to avoid misuse of that information). If this “specialist” already worked for your agency, you would be able to grow your business without adding more staff or maintain your business even if you lose some of your current staff. Productivity goes up and profitability soon follows.
Now imagine that this technology is already in place and working in our industry and has been there (in other industries) for a decade and more.
The key to using the technology that will drive our industry (as it is already driving most other service industries) is the effective planning and use of your website as a customer service tool and your internal systems as productivity enhancers.
In 1996, the average revenue per employee in insurance agencies was hovering around $77,000. Today it is $110,000. $110,000 may sound impressive if your revenue per employee is below that level, but it only represents a 3% annual growth of productivity. We, as an industry, has adopted automation, but most of us still do things manually, then enter it into our systems, actually doubling our work and decreasing our productivity instead of using this technology to increase it. More agencies enter the world of the Internet every year but most use their websites as simple identifiers and billboards. The websites add no value to the visitor and rarely changes, causing most visitors to only click through to you one time. And, like other automation, we now have our “ad” on the Internet, but we still pay the telephone books their OUTRAGEOUS rates to remain “in the book,” as well. I don’t know about you but my family “Googles” everything from restaurants to vendors and uses the phone book to level furniture or hold open doors. A month ago we actually recycled five phone books, still in their wrappers, when we got six new ones for this year!
The few agencies who have invested (time) into their use of their websites all have productivity rates far ahead of the $110,000 mentioned above. Using our analogy of the website as another, highly efficient, employee, these agencies create and utilize website applications with two thoughts in mind, 1) how can this help and add value to our agency in the eyes of our clients, and 2) how can this save our human employees’ time to permit us to grow our agency without hiring new professionals? The first point (including frequent changes and updates to the site) keep the website valuable and fresh. The second point justifies the cost and time used to enhance the site by virtue of time-saving for ourselves and our employees.
Call us (800-779-2430) to discuss having us out to help you create and implement a Strategic Plan to include automation use and website development and marketing as a key component for the future growth of your agency.