ACRONYMS, THREATS, OR LIFE-CHANGING PROMISES
If you don’t know what these acronyms mean, stop reading right now and “google” CRM and AI to understand what Customer Relationship Management and Artificial Intelligence really means.
If the terms CRM and AI strikes fear into your hearts, that’s O.K. as long as you react by learning their meaning and how they could apply to YOUR business and the business of insurance in the short term and long term.
If you don’t want to hear about either concept just as some of our prior generation didn’t want to hear about direct bill conversion from agency bill and about automated rating software being faster and more accurate than manual rating – then it may be time to turn over the agency to the next generation, consider a merger to permit you to continue selling the way you’re used to, or set up the agency for a sale. WHY? Because these concepts are like rising tides – You may not appreciate them when your house is in the way but holding back the tides NEVER WORKS.
If you’re not willing to learn about CRM and AI and how they are changing the face of the insurance industry (including agencies) – you’d better get out of the way because your value (and that of your agency) will diminish as the rising agencies become ever more automated.
This does not imply that I’m a great fan of AI. There is simply too much opportunity to invade privacy and bring offers to the public that they, simply, don’t want.
But AI is going to make the insurance underwriting process much more efficient and automated (like it or not) and will yield higher profits to the carriers through lower expense ratios, something that has been a problem throughout the industry. It will also do the same for insurance agencies, finally turning the consultant’s dream – consultative insurance agencies – into a reality.
WHAT IS CRM?
CRM is a system (manual or automated) for managing your agency’s interactions with current and prospective customers. If you have a method that you employ to improve customer relationships, it will increase your retention, allow for much more cross-selling and maximize your penetration of each of your customers. In the “olden days” some agencies had schedules for each client of when we would like to speak to our clients to enhance the relationships with the agency and offer all lines of insurance they may need. We had to REMEMBER all about our customer in order to remind them of what we discussed in prior visits and we counted on our memories (or copious notes for those of us with poor memories) to build our relationships and make sure we are offering our clients and prospects the asset protection devices that they need.
But, for the most part, we now refer to CRM “systems” – software that helps track every contact with a prospect or customer (ie. Your agency management software). Outside CRM software includes sales calls, service interactions, marketing emails, etc.
WHAT IS AI?
AI is the acronym for Artificial Intelligence (as much an oxymoron as Virtual Reality, Friendly Fire, Passive Aggressive, or Random Order – some may argue that Military Intelligence also falls into an oxymoronic meaning). However, there is little “intelligence” in AI. It is simply a way to collect information that could be important or pertinent to your relationship with your clients. How we USE that information provides the short-cuts that can be useful to our clients and profitable to us.
AI gathers data about you, me, and everyone else in the country in ways that border on science fiction and violates much of the privacy laws many of us hold dear. But, privacy violation or not, we have more data available on every person every year and it is being used daily to bring you what you want to hear and see.
For instance, in some major cities, cameras placed in window displays identify and track shoppers who observe goods in the windows, identifying the person by facial recognition and noting what they have spent time viewing as a potential buyer for that product (or products related to the one viewed). Is this creepy? YES, but it’s being done. The shopper then gets advertising from the displayer on his computer or his cable subscription when he is on social media.
Another example is the huge market that now exists on line (Amazon, etc). What we don’t see is that whenever we click on an advertiser on the Internet that information is captured by AI and used to feed back to us more advertising for products that are similar to what we viewed. If you would like to verify this piece of information, I challenge you to do a search of “Folding Camping Knives” (assuming that you haven’t already searched that subject) the next time you are on line. Then sit back and count the number of times ads for knives appear in your Facebook, or other social media in the following 30 days.
AI can also identify which lines of insurance someone has shopped recently, or when they move and the value of their new houses or vehicles that they register and, without any intervention from the agent, send reminders about the lines of insurance that drew their interest and the need to insure the new owners’ houses and cars. These inquiries will draw activity that can then be matured by human intervention and relationship building (or be relegated to automated quoting that will sell insurance, but not build relationships with independent insurance agents).
Regardless, AI is much more encompassing than CRM but has become so consuming and invasive that it is likely to be used within CRM systems to expand and simplify the choices to maximize its field of use to insurance agencies.
Imagine, for a moment, that you had 1000 clients and prospects in your database. These are the folks that you’ve insured, quoted, and met as prospects in the last year. AI can reach out to identify which of these 1000 has other insurable needs and the timing for each. It can design marketing material specifically for the needs, desires, and experiences of each person to create content specifically for the needs of each person that would “warm” any lead to the point of human intervention for the actual relationship management and potential sale.
While not human, AI databases are much more comprehensive than their human-created counterparts. The data already resides in your system, in your notes about each client intervention and often in public databases as well as in historic marketing results. Remember, one of my strong consulting recommendations is to consider failed insurance quotes and presentations as just one step on the ladder to the sale. Sometimes that step needs to be taken in order to determine what the insured’s “hot button” is (or is not). If you never touch failed quotes, you are flushing money down the drain every day. Sourced properly, AI short-cuts this step with data already known to you – and provides you alternatives to re-market the product to the prospects automatically…
In the 19th Century electricity was used to try to re-animate corpses. It’s most famous use, before lighting New York City and homes around the world, was in the creation of the Electric Chair in 1890 and as the idea source for many horror novels (including Frankenstein). So does AI get introduced by all of its scary negative potential. But, as electricity changed our lives so radically in the 20th Century, so will AI if we learn to control it for all of its beneficial potential and NOT abuse it for the sake of profits or power. Regardless of whether or not we learn to use it properly, PANDORA’S BOX has been opened and like the original myth, once opened, it releases all of its contents never to be returned. In the myth, Pandora’s Box contained all the evils of the world. However, a train of thought also exists that the Box contained all of the gifts to humanity including HOPE, and that how Man uses these gifts defines whether they are used for the common good or for evil. AI is certainly one of the “gifts” that can be used for the worst of evils (i.e. collecting data to be used against an individual or group) or for the greatest good (an intuitive life of creativity unburdened by the threats of omission or commission through the full use of information about each of us).