ACG - Agency Consulting Group

The PIPELINE

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

But I Cant Afford to Advertise

Why on earth would an agency pay a consultant to tell them that if they want to sell insurance, they must contact many people who they do not currently insure???

But that is exactly what is happening in the industry today to those agencies who are not growing and, consequently, find their profit margins declining and disappearing and the compensation of the owners begin to be affected.

Agencies throughout the U.S. call us because they are no longer making enough money to assure the long-term comfort and security of their owners. Many know Agency Consulting Group, Inc.'s Mission Statement:

THE MISSION OF AGENCY CONSULTING GROUP, INC. IS TO ASSIST INDEPENDENT INSURANCE AGENCIES TO PROFESSIONALIZE THEIR ORGANIZATIONS, TO GROW, AND TO ENHANCE PROFIT.

The common request is to "jump-start" the agency and to make them grow and become profitable again.

In our analysis of agency operations, we commonly review financials, not to determine if there are any improper financial transactions, but to determine whether or not they are funding growth. In many cases we find agencies perfectly aligned for a slow decline. When times get tight, they "cut" expenses. But, instead of cutting the perqs that many agents take to help sponsor their lifestyles, they cut marketing, advertising and production-oriented activities. Presumably, they are cut because the agent doesn't see the results that sponsor those expenses. Unfortunately, cutting the source of potential new business slows the decline of the business in the short term and accelerates it in the long term.

Cutting off marketing and advertising makes as much sense as trying to save money by simply not paying any more bills or by trying to lose weight by ceasing to eat.

Obviously, the first example will bring you to court and the second example will kill you!

We certainly do not recommend continuing to pay for advertising and promotions that don't work. Most agents simply do not know whether or not their advertising is paying off. They advertise in the Yellow Pages in self-defense (everyone else does it). But if they have sent out calendars, magnets, pens or other promotional material, they do nothing to measure results in either new client growth or in existing client retention. As a result, it is easy to cut those budget items in tough times. Unfortunately, if those marketing methods worked, the agents have cut their own wrists by eliminating them. And, if the marketing efforts did not work, they should have replaced them with better or different tools to keep the prospects aware of the agency's identity and to keep new prospects inquiring about the agency's products.

Enclosed in this newsletter is an example of one of the best attention-getting marketing pieces that we have seen in recent years. It qualifies as a good marketing piece for a number of reasons:

If sent to personal lines customers/prospects, it is a refrigerator magnet that never goes away,

It can be a constant reminder that you are, in fact, their agent (whether you have been in the past or not) - they will call you if they have a problem because your name and number is most apparent to them.

If sent to commercial clients/prospects, it is still a magnet in a world of metal file cabinets - again a constant reminder of who to call for insurance needs.

It qualifies as a self- mailer,

It is a post card (lower rates) that does not add the cost of a separate envelope,

Your printer (or the card's manufacturer) will address, handle and mail them for you (at bulk rates) and just charge you the cost of handling and postage, saving you many hours of time and effort.

This piece, like all others available, can be an excellent tool for building image, contacts and, eventually, sales. But it simply doesn't work if your staff does not ask the simple question, "How did you find our name?" when a prospect calls you. It also does not work as a single shot mailing (unless it is to your own clients). A marketing program can only work if it builds familiarity between you and your prospects. To do so you must have depth (a number of contacts) and breadth (length of time) to every marketing program. Please see "CREATING AND IMPLEMENTING MARKETING PLANS" in the September, 1997 issue of the PIPELINE (call us 800-779-2430 if you need a copy).

By the time you receive this newsletter, Agency Consulting Group, Inc. will have announced it's MARKETING AND PROMOTIONS PROGRAM for 1999 that provides you the BEST prices for any type of advertising or promotional item regardless of quantity desired. We have made arrangements with Spectrum Marketing Communications 800-962-6687 to provide high quantity discounts to Agency Consulting Group, Inc. clients for everything from magnets and calendars to pens and I.D. Card holders. This is just another way that Agency Consulting Group, Inc. clients can benefit from volume buying through our consulting relationship. Call Spectrum, ask for Robert Schwartz and simply ask him to quote those items that you already order (or would like to order). Robert will also be happy to send you brochures of any type of promotional or marketing items you may want. (Hint: Deep discounts are available for Year 2000 calendars ordered early in 1999 with only a small deposit required before the Fall of 1999).