October 31, 2007 by Steve.

“In the 21st century, it isn’t what you do that matters most. In fact, if you line up all the winners in business today, you will notice that few win by what they make or do. If you make something new (or just better, faster, and cheaper), the competition quickly comes up with a way to improve upon it and deliver it at the same or an even lower price. Customers instantly compare price, features, quality, and service, effectively rendering almost every what a commodity. Yet, the drive for differentiation – personal, professional, and organizational – lies at the heart of all our business endeavors. We all still want to stand out, to be bold, to be valuable, to distinguish ourselves from the competition, to do things others can’t copy and to be No. 1. We always will. But in a commoditized world, we are running out of areas in which to do so.

“However, there is one area where tremendous variation and variability still exist, one place that we have not yet analyzed, quantified, systemized or commoditized, one area which cannot be commoditized or copied: the realm of human behavior – how we do what we do.

“The people and companies that will rise to the top today and stay on top tomorrow – that will be rewarded, promoted, and celebrated – are those that get their hows right. The world has changed to make this idea more relevant than ever, and it now represents the most powerful way to chart a course of enduring personal and organizational business achievement.”

The above are excerpts from a new book by Dov Seidman called How: Why HOW We Do Anything Means Everything… in Business (and in Life). This book is an intriguing exploration of what businesses in the future will have to do to be successful. Seidman contends that continued success will have more to do with the character of an organization than with the products, price, and services they deliver.

He maintains that technological advances have created a hyper-connected world that demands transparency. “Soft” things like trust and reputation are essential for success in today’s transparent world.

Your clients already have a certain level of trust in your organization. Otherwise, why would he do business with you? Yet most agencies I talk to are focused on what products and services they can deliver to their clients that will differentiate them from their competitors. If Seidman is right, to be successful in the future, an agency should concentrate on building trust and reputation.

An example of this might be videotaping the contents of a client’s home or business to be used as documentation in the event of a claim (see previous post). Agents might read this suggestion and dismiss it because they don’t think they can afford to spend the time necessary to do this for their top clients –– much less for every client. However, if success truly is based on building trust with clients, what could be a better way to do this than to provide this service?

Technology is leveling the playing fields between competitors, making it much harder to distinguish yourself. The trend today involves delivering not so much a better product or service, but a better experience to customers. Working on the how instead of the what will put you in a leadership position for the future.

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August 28, 2007 by Steve.

Outsourcing. Just saying the word out loud raises questions and emotions. During several recent presentations, I have started talking about outsourcing as an option that agencies should consider. In fact, a few agencies have already started hiring staff from another country to work for them. That said, many agency owners and staff react negatively to the thought of outsourcing. They ask: “Why would we take a job and move it overseas? What would my clients think?” These are valid concerns.

While outsourcing is not a good option for every agency, I do believe it is something that agency owners should at least consider. Thinking about outsourcing strategically allows you to select functions or specific tasks that can be done less expensively — and often more accurately — by someone not located in your agency.

As an example, I recently received a phone call from a person at a small agency in South Carolina who asked if I knew of any resources they could utilize to hire remote staff. The agency owner explained that he was very frustrated with the problems he had encountered trying to hire staff locally. When he did hire someone, he spent a significant amount of time and resources training that individual. Inevitably, the person left the agency just when he or she was becoming productive. This particular agency had already outsourced all of its accounting functions to a US-based firm that specializes in insurance agency accounting. The agency owner was very happy with the arrangement and wanted to explore a similar arrangement for other positions in the agency.

Where to outsource

Specific transactions: Review transactions that are completed in the agency that don’t add value, such as issuing standard certificates of insurance, or as described above, accounting functions.

A staff person: There is a growing list of agencies that have hired people located in China or India to work full-time for the agency. These people access the agency systems using a remote connection. The cost advantage is significant.

A virtual assistant: A growing number of people are hiring assistants to complete time-consuming and labor-intensive tasks. A friend of mine, who is a CEO of a large publishing company in Nashville, requires his direct reports to hire a virtual assistant for personal or business tasks. He gives them a $500 budget. He told me that he requires this so his staff will gain practical experience in how outsourcing can work.

Simple data entry: I’m currently working with an agency that is changing to a new management system. They have determined they are not going to convert any data from the old system. To reduce the amount of keystrokes necessary to get data into the new system, we have come up with three strategies. First, we will do initial downloads from their carriers. Then we will use the import function on the new system to import large schedules. Finally, we will hire (i.e., outsource) data entry for any items that are left. This allows staff to concentrate on their strengths and not waste time on simple data entry.

Outsourcing raises many questions. How do you find someone? What about security? What tasks can be assigned? How do you monitor quality? Be sure to consider each of these questions before you even think about outsourcing.
 
In my experience, using outsourcing strategically in an agency can build your competitive advantage. What’s your opinion?

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August 6, 2007 by Steve.

Communicating with someone used to be easy. You could simply pick up the phone and give them a call, or sit down and write a note. Fast forward a few years and you now have the Internet making it easy to type an electronic message from your computer or your cell phone. This massive change in how we communicate with others has taken place in a relatively short period of time. Many agents now tell me that e-mail is their primary means of communicating with most clients.

Yet this new communication option has introduced problems into the agency workflow. In fact, I believe that sending and receiving e-mail is currently the biggest drain on productivity for many, if not most, agencies. People are surprised when I make this comment. They contend that e-mail has made it quicker and easier, and takes less time than other forms of communication. I agree with them, but only up to a point.

The problem, as I see it, is that we are allowing e-mail to manage us instead of learning to proactively manage the e-mail that we deal with every day. Like any new form of communication, we need to learn how to use it as an effective tool. Some of the problems I see with e-mail include responding to e-mail as soon as it comes into your Outlook inbox and reading an e-mail but, because we don’t know what to do with it, we leave it in our inbox.

Because paper and fax have been around as communication options for some time we have learned how to manage them well. We can take some of those same principles and apply them to e-mail. Here are some ideas you can use to help everyone start learning to manage e-mail like any other communication.

1) Turn off all notifications for when you receive a new e-mail. There are very few e-mails that are received by staff in an agency that have to be answered immediately. With alerts turned on every time a new e-mail arrives the natural tendency is to switch over to your e-mail client and read the new e-mail. If you’re in the middle of a difficult task your concentration is broken and it will take a few minutes for you to figure out where you were and get started again.

2) Train yourself to review e-mails on a consistent basis. If you’re not being notified when new e-mails arrive, you need to make sure you go to your inbox on a consistent basis to review the new e-mail received. A friend of mine, a CEO of a large corporation, recently decided that he would only answer e-mail twice a day, late in the morning and before he leaves for work at night.

3) David Allen, author of the book ”Getting Things Done” (highly recommended), suggests that when you are processing your new e-mails you follow this rule. If you can answer the e-mail, or take other action required in two minutes or less, go ahead and answer the e-mail immediately. If it will take longer than two minutes then move the e-mail to a pending folder to work on later. You then review the pending folder at a predetermined time to complete the work. This allows you to complete easy e-mail and concentrate on more difficult tasks when you have the time.

I have followed this advice to try and better manage the large volume of e-mails I receive. I strongly recommend that you begin experimenting with ways to better manage e-mail communications, both for yourself and your staff. You’ll be less frustrated and your clients will experience better service.

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June 16, 2007 by Steve.

In October 2006, I wrote an editorial in my print newsletter, The Automated Agency Report, that said, “…an increasing percentage of the population is relying on search engines to find information. Their searches include information about products and services they are interested in buying. As more and more people use the Internet to find providers of products and services, such as insurance, agencies need to become more sophisticated in making sure they appear in search results.”

Then, just last month, I read the Online Automobile Insurance Report published by comScore. The report is based on comScore’s database of passively observed online behavior and from a survey conducted among more than 2,000 U.S. consumers during the first week of March 2007. Following are some interesting facts contained in the report:

•  In the fourth quarter of 2006, 31 million people — 15% of Internet users — visited an auto insurance Web site — more than double the 15 million visitors in early 2004.

•  28.1 million people received an online auto quote in 2006, but only 1.6 million policies were actually purchased online in 2006.

•  Most people continue to prefer to work with an agent, but over half of customers who recently purchased insurance with an agent had also performed an online quote. When asked why they used a local agent, consumers most frequently responded that they liked having a person to visit or call. For those who did not use an agent, the main reasons were convenience and speed.

•  Over 20% of those surveyed said they would buy from the company they trust most, no matter the price. Only 10% said that they would select the least expensive, no matter what company. While most companies focus their advertising on price, people are not willing to switch unless the cost savings is substantial — nearly $500 a year.

•  When a person wants to switch their auto insurance, it is critical that they are able to obtain the information they need. People who see an auto insurance ad are more than twice as likely to visit a Web site specified in the ad as they are to call a toll-free number in the ad. Slightly more people will use a search engine to find a Web site than will call a toll-free number.

•  Two-thirds of people surveyed would go online to find more information about auto insurance. Two-thirds also say they would purchase auto insurance online. Younger customers are much more likely to be willing to purchase online.

To paraphrase Mark Twain, “Any reports of the death of the independent agent are greatly exaggerated.” Most consumers continue to prefer using a local agent. They also prefer to go online to do research (i.e. get quotes and other information) in order to ensure you are giving them the best options for their coverage. Agents and insurance companies must learn how to leverage the Internet to acquire new business and provide customer service to existing clients.

While this report only focused on auto insurance, I view the results as insightful information for any agent who wants to understand how consumers’ purchasing habits are changing and adapt marketing, sales, and customer service options to meet their needs.

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January 2, 2007 by Steve.

Some agencies (I wish I could say most agencies) are finishing their strategic planning for 2007 and beyond. Typically this includes establishing financial goals for the new year as well as projects that need to be completed. Below I have provided my view on the trends that you should be aware of as you go through your planning process. Use these thoughts to make sure you are considering all of the information you need to make your agency as successful as you can in 2007.

Generations: We have been spending quite a bit of time talking to people, reading and researching generational differences. I have become convinced agencies that ignore these differences do so at their peril. I believe that agencies need to create different sales approaches as well as customer service approaches that take into consideration the different needs and expectations of prospects and clients based on their age. You will be seeing a lot more information in TAAR in 2007 to help you understand the impact on your agency and how you can adapt.

Moore’s Law: Gordon Moore, founder of Intel Corporation, said that computing power doubles about every 18 months while the cost remains constant or drops. Moore continues to be right. Computing devices will be more powerful and less expensive. Cell phones will be more like computing devices than a simple phone. Wireless technologies will allow Internet access anywhere. This type of access changes things. Producers can be anywhere to access agency data and information. Internal staff can work from anywhere as virtual employees. And customer service expectations are changing.

Information Security & Privacy: This access to information creates new and potentially dangerous exposures for agencies needing to protect their client information. An agency stores more personal information about their clients than most any other organization. Additional legislation will be enacted (both federal and state) creating legal responsibilities to safeguard this information. Most agencies we talk with have no idea the legal peril they face. This has to change.

Electronic Document Management: With all of the technology available to us it seems we produce more paper than ever. Agencies are taking the first steps to scan and store the paper they receive. The next phase, electronic document management, is coming rapidly. The changing client expectations I mentioned above will require agencies to allow their client to view agency stored electronic documents. The agency culture change required is a major shift for many agency staff. Giving up the paper is hard. The hard part when implementing a document management systems will be to change the workflow at the same time.

Client collaboration: I mentioned this last year and it is still important. The value you bring to your clients is not just processing their transactions. Your value is the expertise you provide to protect against unforeseen losses. This continues to be one of the most difficult transitions for an agency to make. In the past, transaction processing was defined as good customer service. In the new environment that is being created transaction processing is expected, excellent customer service is something much more.

Another tool you can use to understand the trends you are facing is the Agent’s Council for Technology (ACT) paper on important technology and consumer trends. You can find it by going to www.independentagent.com/act. Having a better understanding of the trends you face will help you plan effectively.

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