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5 Ways Agency Principals Can Seize the Future

By Peter van Aartrijk

About this article: Peter van Aartrijk provides great insights for the agency principal to consider in order to take his or her business to a higher level in the future, based upon the innovations the author is seeing both within and outside the insurance industry. There has been a lot of very fruitful idea sharing going on within ACT’s Agencies of the Future initiative, which Peter chairs, as well as in ACT meetings and other forums. Peter shares the ideas that have particularly resonated with him, along with providing links to several excellent resources that will provide agency leaders with additional food for thought and action.
5 Ways Agency Principals Can Seize the Future
By Peter van Aartrijk
It’s been about a year since ACT’s Agency of the Future Work Group produced a couple of thought pieces on the emerging consumer and how we believe agents should respond.
Now we’re excited to release a video series to supplement our written work. The first video is entitled “Agency Perspectives on the Future” and focuses on leadership, the changing consumer and agency, and the outlook for the future. (Thank you Applied Systems for assisting ACT in producing the video.)
Couple of points on the video:
·       Watch it at least twice; you’ll pick up new ideas each time. Our industry is blessed to have some incredibly bright, talented and expressive people.
·       Show it at agency staff meetings to encourage fresh thinking.
·       Carriers, associations and user groups can show it at employee and agency meetings.
Our work group plans a second video, “Agency Strategies for Growth,” that will focus on using marketing, social media, metrics and automation for future success.
It’s been a year of excellent conversation. And, of course, it’s a cool topic—who doesn’t like envisioning such a bright future?
In the original 2012 reports, we explored what we considered to be attributes of a successful agency of the future—the foreseeable future, to be specific. I’d like to comment on a few of these I find critical for principals to consider:
1. Brand
Okay, I’ll admit it: I’m biased here. But a strong brand is the difference between winning and falling behind, period.
Remember that the agency brand isn’t tangible; it is a set of expectations and memories that reside in the minds of your stakeholders (owners, employees, customers, prospects, business partners and opinion leaders). The objective is a clear/consistent 360-degree understanding of the brand among all stakeholders. This will take a while if you haven’t started the process.
The insurance industry creates products and services, but people buy brands. Thus, your agency’s brand is the most valuable asset. From the owner’s perspective, it will guide employee behavior. From the consumer perspective, the brand will help them decide where to buy. That won’t change for the agency of the future.
Strong brands build loyalty—reducing turnover and increasing revenue per customer. You attract talented people to work for you. You attract the best carriers. Your referrals increase. You can talk more about value than price with prospects. And you can go beyond clients to raving fans.
Thus, it is important for the agency to go through the process of defining and codifying the agency’s brand attributes and personality. What are they today? What should they be? What could they be? More important, with the proper strategy and investment, what will they be? Agency owners must clearly understand, embrace and communicate a direction for their firms.
A strong brand is something you earn, not something you receive. Smart firms realize that customer and prospect communications are an investment, not an expense, and they will build agency value. Best Practices agencies consistently are spending 1% to 3% of annual revenue on these activities (the larger the agency, the percentage typically drops). Some firms are redirecting more of the annual spend towards younger talent to handle social media initiatives; where in the past they might have directed more to paid media, for example. Refer to the Websites & Social Media page of the ACT website for more information.
Are you just an agency name? Or a brand name? Could it be more crisp, clear, consistent and visible?
2. Leadership
Our work group has talked a lot about leadership—specifically, the value of transformational vs. transactional leadership.
Organizations need both to succeed, but agencies typically are lacking in transformational leadership. Such a leader:
·       Always seeks improvement and is more willing to shake things up.
·       Realizes that the world is dynamic and sees change as an opportunity, not a threat.
·       Builds a culture that drives customer and employee happiness.
·       Develops employees, at the right levels and in the right places, and allows them ability to grow.
·       Has effective listening and communications skills.
·       Inspires staff to work as a team toward a common goal—and inspires the team to take its own initiative to accomplish goals without management’s handholding. 
For an agency, leadership means managing a business, not just being an insurance technician.
Smart agency principals never seem satisfied—they always strive to get better. They have a voracious appetite to learn. Leaders are willing to gain new information and insights from any source—employees, clients, other industries and industry meetings. To that point, “Leaders are readers,” according to author/speaker David Nour. Improving just 1% per day in knowledge and skill means that in 70 days you’re twice as good as today, he says.
Does your firm have a good dose of transformational leadership?
3. Staffing
Over the next 10 years, 50% of current agency workers will have retired. But the next generation of leaders are ready to get involved now—don’t stand in their way.
Smart agency owners invest in people and training. Some of your new hires may come from outside the industry—a great way to generate new ideas and also get strategic help, which agencies often lack. Many firms have a couple of family generations on board. But now these successful owners are handing over the reins to professional managers who are not part of the family. And if you’re looking for the best talent, be prepared to pay the best salaries—but it’s an investment in your future.
Another trend of which to be very aware: Who works at your firm, what is work, where we work, when we work, how we work—even why we work—is all evolving. It’s an exciting time. Be flexible. Some of your best talent of the future won’t commute to the office 9 to 5 every day. Some will be consultants, some employees; some will work full time, and some part time, and some remotely. And some of those highly talented would-be retirees I mention above might continue to contribute to the firm under alternative circumstances. Flexible work arrangements backed up by slick, enabling technology—such as Internet phone systems—are becoming more prevalent at agencies.
Do you offer a place where insurance professionals want to work? What’s your story to a new recruit? Will you earn your fair share of tomorrow’s talent?
4. Social
The successful agency of the foreseeable future isn’t going to dabble in social media marketing—it will be a social business.
Sitting on the sidelines of this incredible consumer revolution isn’t going to cut it. Nor is looking at customer and prospect marketing as a series of projects.
The future agency will be fully engaged, year round, in online and social networking activity. Social is not just an isolated initiative. It must be an integrated piece of your agency’s personality. It defines how the firm communicates and engages with customers and prospects.
Agents say they struggle with creating (a) the time it takes to be a social business, and (b) ideas for content—the “what” and the “how” to do this. It’s easier than you think if you approach it from an honest and authentic standpoint. For example, I find it interesting how every day agents literally “speak” dozens of potential blog entries when they help explain a coverage or handle a claim. Write them down! Or use voice-to-text software.
You don’t have to make this up on your own. For good material on developing and implementing an online, mobile and social policy, go to the ACT website. The reports will help you guide employee behavior. Once you have a system in place to interact and respond to consumers, the rest will be easier.
Relationships are key to the future of consumers and agencies. Everything you do should be about building relationships with employees, business partners, prospects and customers. Software and hardware and cloud technology and social media platforms can be distracting. Put your work into a strategy, setting goals and building relationships. The social media platforms—Twitter, Facebook, and more—that you use to communicate will be a secondary consideration.
Are you building relationships online? Do you allow your employees to use these tools as well?
5. Metrics
Agencies that measure effectiveness of marketing and sales efforts tend to be much stronger, period. Knowing your numbers is a key differentiator between the growing agency and the one that is not. Key metrics to understand include new business, retention and revenue per client; number of policies per client, and from where the business comes.
For more on 12 key metrics, see this excellent article by Chuck Blondino, Safeco Insurance.
Are you measuring your success? If you’re falling short in some areas, how soon will you know?
In summary, these five areas should be at the top of your list to create or improve your agency of the foreseeable future. What’s your plan? What’s your dream for the future? In the words of the late Walt Disney, “If you can dream it, you can do it.”
Our work group will continue to explore this fertile area—considering both consumer expectations and agency responses. Stay tuned. We hope to see you at the IIABA Special Event & ACT meeting in San Antonio on September 27, when we will explore further effective agency strategies for the future.
Peter van Aartrijk is CEO of Aartrijk, a marketing-communications firm specializing in insurance. He also is principal at strategic branding firm Chromium and Channel Harvest Research , which conducts studies of independent agency preferences/views on their carriers. He chairs ACT’s Agencies of the Future Work Group. Peter produced this article for ACT; it reflects his views and should not be construed as an official statement of ACT.
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