Part IV of our PRODUCER’S ROLE series
At the core of the Asset Protection Model of Relationship Selling (the APM) is the difficult but worthwhile task of establishing, building and maintaining a strong personal and professional relationships between you as the insurance professional and your clients and prospects. We urge you to call us (856) 779-2430 and we will discuss implementing the APM for your agency and will send you a full description of the APM. In a nutshell, we have found over several decades of research that the clients with whom an agent establishes a trust relationship based on consulting with the client about his asset protection needs instead of being a vendor of insurance products provide a higher rate of sales, substantially more policy sales per client and much higher retention over a longer client lifetime than any other sales system. In other words, your producers will be more productive and your agency will grow faster and more profitably because your controllable customer retention will rise.
Producers who scurry to find anyone who will permit them to quote coverage often find themselves spinning their wheels. If they are lucky enough to have sufficient marketing to offer them a steady flow of prospects, they keep very busy to gain a marginal numbers of sales. And then, in a year or two, the clients they wrote because they were able to give them the lowest price move on to the next “lowest price”. This is the Price/Quote method of sales employed by most insurance agents and brokers in the U.S. and Canada over the last several generations. Agents, faced with the incessant price strategies of the competition, feel that they had to stoop to the same price strategies to get and keep customers. But the facts belie the concept.
The vast majority of customers in every agency’s book of business are ‘renewed as is’ with changes in rate and premium included. They don’t leave or shop their insurance every year for one of two reasons, INERTIA (the ‘devil you know vs. the devil you don’t know’ – or – the feeling that “they’re”all the same), or RELATIONSHIP (they have a relationship with you or someone in your agency that they feel comfortable enough to stay even if the price goes up. If you argue that you shop the most important customers and hope for the best for the rest of the book of business, we remind you that a $500 change to a $5,000 client is as impactful as a $10,000 change to a $100,000 client. They are just as likely to be upset if not prepared for changing rates or premiums. But your customer retention stays consistent (or may even be higher) for your smaller accounts with your larger accounts.
Unfortunately, surveys and studies have shown that the majority of our clients stay from pure inertia than from perception of strong relationships. The distinguishing feature of strong relationships is much higher policy per account and referral rate when a client feels close to you, a staff member or to the agency or carrier. Your job is to CONSTANTLY BUILD THE RELATIONSHIP between the agency and the customers.
The producer is normally the point person for a customer relationship, whether that is an owner or not. However, what happens if that producer dies, become disabled, retires or leaves the agency? Your relationship dissolves with the customer upon the departure of the producer. The answer is obvious. Develop relationships with more than one person in the agency for every client. A relationship is not necessarily equivalent to a personal friendship (although that happens often with major clients).
A relationship is defined by a comfort level that is attained by the client with one or more people in your agency. They feel that you “know” them and their situation, as complex as it may be.
A relationship implies “trust.” The relationship customer feels that you are looking after their best interest.
A relationship is defined by a customer “valuing” the agency. The relationship client boasts about you. And valuing you as an ‘unusual’ kind of insurance professional causes the client to talk about you to friends and to actively refer you. They become your champions.
For example: For many years I had a car salesperson that created a “relationship” with me. She knew what I liked and wanted in a car and how frequently I wanted to change vehicles. When servicing needs arose, she participated to make sure that what I needed was done as expected. When the time came (through her own diary system, I assume), a new car would be placed in my driveway and a note would be left for me to try this out and call her. Since she knew what I was seeking and I trusted her, this would often be a formality to my trading my old car. She made the transaction painless. She had the pricing and paperwork done before I ever saw the car. She knew that the If I didn’t like the new one, it would disappear and another would take its place. This is certainly NOT the experience that most people have in dealing with a car dealer. This caused me to constantly boast about the level of service I received to my friends and colleagues (including to thousands of readers of the PIPELINE). I must have referred two dozen people to her for their vehicle needs. THIS IS A PERFECT EXAMPLE OF A RELATIONSHIP CLIENT.
So, who should form relationships with the client? It depends on the type of client and where the contacts are in the agency.
Many years ago, we espoused introducing CSRs to commercial clients because they would be the people who would be at the point of contact for the agency. We also suggested that the CSR/AM/AE would be better treated by clients that they knew personally and vice versa. So, in commercial lines, the points of contacts are the producer (and the owners if the account is large enough) and the lead servicer of that account.
In personal lines it may be the servicer and the manager. The important part is that more than one person must know the client by name (and vice versa). The more relationships struck between the agency and the client, the more secure the client in the long term.
CUSTOMER RELATIONSHIP MANAGERS (CRM)
Building a relationship is a matter of repetitive contacts and familiarization. You don’t have to be personal friends with every client. But you do have to remember their names and the important things about their personalities, families, and business. This is where a CRM (Customer Relationship Management) gets to be an important tool. A broad-based subject deserving its own series of articles, if you’re not yet familiar with CRM’s you really need to spend a little time learning about them. The easiest way to understand CRMs are to think of them as Excel spreadsheets that keeps all your lead information in categories that makes it easy to view every leads’ information, know where in the buying cycle the specific lead is in and allows for continuation of follow-ups to move the prospect along toward becoming a client.
Start with familiarizing yourself with SalesForce, the powerhouse in CRMs, (https://www.salesforce.com/solutions/industries/financial-services/insurance/ ) then, before you make a decision, look at some of the newer, more flexible CRMs that will range from free to a few hundred dollars/mo but work intuitively and perform many, if not all, of the major functions of a CRM (Task notification, calendar notifications, reports, automatic emails, automated calling, routing leads to specific people, attaching documents, linking to Outlook or Google, and even establishing and managing marketing workflows.
I know the entire topic of CRMs sounds scary to those of us who are mature in the business – but remember when you converted from your flip phone to smart phones? You eased yourself into the applications that were meaningful to you. Similarly, you will start using CRMs sparingly for those functions that you recognize as beneficial to you, and then your younger staff and you will find all of the tools that will become advantageous to you until you will be comfortable with the advanced concepts of CRMs right down to AI-type intuition and direction (Artificial Intelligence). The only way you will fail is by being frightened to use this recent technology to help build your business.
If you subscribe to the Asset Protection Model of sales, the collection of intelligence on every customer every time you speak to them has become a habit. The storage of that data in a CRM or even a paper file permits you and anyone else in the agency to become instantly familiar with a client based on all the intelligence you have gathered in your conversations with the client. Familiarity doesn’t breed contempt – it breeds loyalty and strong on-going relationships.