Tag Archives: loyalty

09.20.18
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What you can do that they can’t

Apparently, I forgot to hit publish in September 2013

 

Enough already, so sad that industry publications continue to write articles about direct writers (state farm, allstate, geico, liberty mutual, etc.) and how the independent agents are competing against them.  Are you really?  Maybe it is time for a solid look in the mirror.  While you are at it maybe you look at your business plan as well.

Some things to consider;

1. Do you really want their customers?  I like leftovers but my wife is a great chef.  Her leftovers are the only one’s I eat, I’m not interested in anyone else’s.  The lesson, focus on what you want instead of what they do not want.

2. Let’s face it, most companies want the same preferred business; great credit, own a home, have a college degree, married.  Do you?  Funny thing, in my experience, I do not see this very often among the Geico policies I replace.  How about you?

3.  Do any of your carriers not have a top notch call center?  Don’t you have to have one if you want to be in business today?   Thing is just because you advertise it doesn’t mean it is any better than a company that does not advertise it.

4. If you have an agency management system you have all sorts of ways to automate your follow up with current customers and prospects.  Thing is you can time it up so you regularly reach them with VALUABLE information.  Please let me know the last time a valuable piece of direct mail came from a direct writer….Yup, me neither.  I think you might see a narwahl first 🙂

5. When was the last time you went shopping and the only thing on your mind was price?  Go look in your kitchen, let me know how many store brands there are versus big companies.  But that is not the real comparison see most of those store brands are made by the big companies.  Now look again, do you have any of the real cheap cans of vegetables?  Boxed goods?  Odds are the customers you want don’t have them either.  So why are you still worried about the price?

6. LOYALTY is most often reserved for PEOPLE, not brands or companies.  How many people know their call center rep?

7. Based on my results and likely yours, you can get competitive rates for 8 out of 10 people you talk to.  Let’s be conservative and drop that to 7 out of 10.  7 out of 10.  There is no mathematical way that if you only have one company you can duplicate that result.  So why spend the time on the 2-3 people that you cannot get a competitive rate for?    *See number 1 ” do you know who you want”

8. Back to loyalty for a moment.  You’ve built a business but have you built relationships?  We are in a long term business, the profit from any household/customer/client/business rarely comes in the first year.  How are you keeping them around?  This is differentiating yourself from those companies you are supposedly in competition against.  Heck it is also solidifying your position among any of the other local insurance options.

Bottom line, BUILD YOUR BUSINESS.  It will build faster if you focus on what  you can control.

09.19.18
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Paying for loyal rates?

Yup. A couple of times a month we run into something similar.  Long time, likely profitable, customer not exactly being appreciated https://theinsurancebill.com/?p=199

Truth is, I’ll likely be in a similar spot about 10 months from now.  But how can that happen?  You had two NOT AT FAULT accidents.  Exactly  But, because of a lot of things, including a call center order taker and some weak regulations, one driver did not have enough coverage.  That means I need to use my coverage *sigh*.

Lots of bigger questions, but the one that pops into my mind is the “accident forgiveness” conflict.  My children, and maybe yours, have accidents all the time.  Forgiving accidents is just part of what you do for children. Our employees make mistakes all the time.  We fix them and move on, we don’t change their salary because of them.  But yet, in insurance, it seems to be acceptable to pay a company to forgive an accident.  Huh?

Don’t most consumers forgive actuaries, executives and underwriters on a daily basis for abusing price optimization, miscalculation and poor performance?  They even willingly but maybe unwittingly continue to pay premiums.

Times are a changing, time for a change.

 

03.09.16
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The most powerful paragraph in insurance

AKA  My and the Insurance/Banking industry’s simultaneous biggest problem and opportunity

AKA What #insurtech should be trying to solve but outside of me and maybe some people I have not found yet, is not.

Really it is two paragraphs.  One that comes from a standard document that you’ll find in your policy forms. Yes, I know you likely do not read them.  Also, the version in your state may be different.  The other is a direct quote via an email.  I see or hear variations of the second one every week.  So here goes;

In connection with this insurance, we previously used a credit report or obtained or used a credit based insurance score based on information contained in that report.  We may obtain or use credit information again provided, however, that upon renewal such information may only be used to reduce premiums.  An insurance score uses information from your credit report to help predict how often you are likely to file claims and how expensive those claims will be.  Typical items from a credit report that could affect a score include, but are not limited to, the following; payment history, number of revolving accounts number of new accounts, the presence of collection accounts,bankruptcies, and foreclosures.  The information used ot develop the insurance sore comes from Transunion.  If you have any questions about the use of credit information in insurance underwriting, you can contact us at 1-800-***-**** or write us at p.o. box______________ or via fax at 877-***-****,  When you write us, please include your name and policy number.

Here are a series of questions I am pondering;

So when negotiating for this right, did companies really just build in a “backdoor” to cover them if it didn’t work?  Think about it; if this was so accurate why do they reserve the right to raise your rates after claims?
Is this really a “customer centric”approach?
Why don’t they actively use this awesome tool to retain you as a customer?
Depending on what blog or newsletters you read, depending on who you follow, depending on who you work with/for you’ll catch almost the  “excuse of the week” when it comes to fixing the personal insurance marketplace.  The saturation point of unexecuted thoughts and ideas has been reached a long time ago.  I prefer things much simpler; acquire customers, take care of them, keep them.  By keep them I mean BY ALMOST ANY MEANS NECESSARY.  I like to think I follow a good cross section of people/companies.  Yet they all see to alternate what the excuse is for not being able to help the customer.  So many are focused on new business and will spend whatever time and money necessary to get it but most overlook what they have already.  Silly and sad…..but creates an awesome opportunity.
2.  “Billy,
Why would the rate go up 50$ shouldn’t it decrease over time? No tickets, no accidents… Is there anyway to lower the rate? It just doesn’t sound kosher that the rate they want now would be more then the initial payment with XYZ, then the second payment decreased to around 680$ which I’m fine with… “
Quick Back story for you insurance people; came to me as uninsured, single, male.  I was thrilled with the rate he obtained. Then, for the next six months his rate went down, then after that period his rate went up.  In the meantime, as I do, I checked my markets to see if anything better was available.  His rate, although inexplicable raised, was still the best I could offer.  
 
His logic is completely sound.  This is, sadly, the once accepted but should no longer be acceptable, norm.  This method of doing business is exactly what is allowing newer companies to come in and try and “disrupt” and old system.  Crap like this is why your agent might be pounding you with a useless newsletter or article.  This kind of behavior is not considered acceptable in any of your other buying experiences, why do we as a society allow it to continue?  
 
The short answer is I don’t…but more often than not am outnumbered.  The odds are long, but the payoff is massive.  Based on my(my company’s) growth rate, people like the way I do business.  But currently we come up short with technology and people power and to not bore you with analogies, it’s just tough.
 
Take from this what you want.  I gain more answers and fine tune things almost daily.  Almost daily I am also inundated with silly reports and nonsense being pushed by marketers and companies onto my fellow agents.  Such is life…currently.  I/We keep moving forward.  Actually close to a pretty massive move/shift that will greatly accelerate things.
 

An aside that is sort of related; A long ways back it was a Monday afternoon and a coach was giving us JV’ers a pep talk.  During this we watched the other team line up and he pointed out a couple of very large people.  He was very quick to point out, if they are so big and bad why are they playing on JV?  Yup, simple, profound and very logical.

I think  of this after just about every article, white paper or study I read.  If the people writing or being quoted know so much about how insurance is bought and sold, maybe they should start their own insurance brokerage or go to work for a broker or company?  The reality is things might accelerate if they did.

ONE HUNDRED MILLION or more people will benefit from these changes, would you like to help me?

12.28.15
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Maybe the insurance industry is just a reflection of society

Reality is this; insurance companies are run by other members of our human species.  They are also influenced by their surroundings both human and inanimate.  They are influenced by many of the same ideals, both positive and negative as the rest of us.  There is a lot of talk about “disruption,” #insurtech, #fintech, and #bigdata.  The industry is “ripe” for change, blah, blah, blah.

Yes I have many of my own thoughts, heck it’s my blog so of course they are my thoughts.  This dawned on me the other day;

Maybe the insurance industry is just a reflection of society.  But how?  In what way(s)?

So it came to me right in the midst of the holiday season.  Many of us buy new gifts for loved ones.  Many households, especially those of us with children, are likely experiencing an overload of toys.  Some of us now have items we don’t need, didn’t ask for and likely don’t want. BUT, I am hopeful we appreciate the effort.

I’m hopeful that many of us still appreciate what we have and don’t simply throw away what we have to replace it with the new and shiny.  

Than again, we will still have building after building of storage units for all the “stuff” we cannot bring ourselves to throw away or sell.  *Not sure where this fits in, are we all, on some level ,hoarders?  Are we so appreciative of “things” that we cannot throw them away?

But how does this fit the industry?

The average retention rate of a company and even brokerages/agencies is not talked about often enough.  When it is talked about, it seems like a “white flag” has already been waived and that they simply accept the fact that they will let customers go

**This is important, whether you are a company, agent or broker you let people leave more than they actually leave you****

WHY?

No idea really, the math and every basic human as well as business idea/philosophy tends to go against this.  But this is where I am beginning to think that the cause is much deeper than business and math.  Maybe it is deeply rooted in the subconscious.  Maybe it is tied deeply with your personal characteristics and how you are influenced by society.

Let’s face it, most of us ignore the ideas of repurpose, recycling, repairing etc.  Many of these people also simply buy new since it is convenient.  Maybe it is a lack of appreciation for what they have already(think profitable, blindly loyal customers).  But when it comes to insurance this attitude is very, very expensive.  Think SIX BILLION + in advertising expenses instead of less than a billion(my guesstimate) in retention expenses.

How do you/we break the cycle?  At what point will a company “stop the madness” so to speak and start appreciating what they have?  The practical examples are readily available; the older couch goes from the main living room to the play room.  The used car goes from you to the teenager.  We re-use some paint from one room in another.  Leftovers should still taste good the next day or beyond.

Back to the customer; you are hired this year and if you are lean enough you turn a profit this year.  If it takes longer than that, all the more incentive to keep them longer.  But how do we keep them?  If you have a system that automates most task, this could be fairly easy but;

It starts with your underlying principals and philosophy

If you appreciate what you have and show it appreciation it will appreciate you back(stay longer!)

If you own a car and want it to last you’ll change the oil.  It doesn’t mean the car has any less value.  If anything, changing the oil(investing a little into an asset) makes the asset worth more since you can keep it longer and hopefully avoid costly repairs.  Pardon comparing a human to a car but the analogy fits.  Keeping a customer longer does not ensure that they’ll be profitable but you’ll have no chance at profitability if you let them leave.

The big wave is already happening in insurance.  But maybe, actually definitely, those that can profit most from it will likely need to be accepting of a bit of an attitude adjustment.  I’ve written on it before, let’s look at companies like Terracycle.  Let’s look at Zappos.  Heck look at any of your local businesses who you are loyal to.  Now look at your insurance company/broker.  Same feelings?

As much as new technology is needed, technology will not solve the underlying societal problems that have infiltrated insurance thinking.

10.07.15
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Timing is important

Sat in on a webinar a week or so ago.  The title of it intrigued me since I could not figure out why it was setting such a low expectation for a certain metric.  Then I gave them an hour of my life and they basically explained why.

Some people don’t think big enough  

Kind of reinforced me to not pay much attention to consultants who are paid for time not necessarily results.  Anyhow, Lots of goofy ideas where talked about but two stood out;

  1. The times you should be cross selling a current customer/client
  2. The times to ask for referrals

Both are very valid things to talk about.  There are likely dozens of ideas and concepts that have been written about and that those writers will say work.  Cool.  A couple of questions to consider;

  1. When I make the time to call you, I am likely calling to handle something specific.  I may be stressed, busy, on my lunch break, etc  Why would you think I am giving you permission to take more of my time?
  2. What correlation is there between changing a car on an auto insurance policy or refinancing my home with asking me for more money?

Now, I absolutely agree with just about every study surrounding account rounding and the more lines of business in a household.  On the other hand, I am confident to know that whatever I have already done for you should have been done in such a way that you see the value in me.  That value and hopefully personal connection we have made is a very powerful thing and can undo most stats.  Consider this as an alternative; what if you politely kept in touch over the course of a year without trying to sell me anything?  Think about it, you politely keep in touch with this nice person who is already a customer.  By doing this you can hopefully bring additional value and maybe a smile therefore keeping the door open for me to buy something else.  Any way you look at it, me buying something from you is way better than you selling something to me.  Besides, you should have enough people to work with that you do not need to depend on forcing/selling anything to anybody.

On that note, I think asking me to introduce you to friends and family is almost as bad.  Why?

Quit being lazy!!!  Bring value and participate in Social Media!!!

That’s right, I think you asking for referrals, many times, is simply lazy.  I also lump it right in with interruption/spam marketing if you are asking me for referrals when I am calling for some other reason.  Some thoughts;

  • Just like me buying from you, isn’t it better when I proactively share you with friends?  How can you make this easy for me?
  • Is paying for referrals really a good idea
  • If I am only referring you someone so I can enter a contest, is it really a referral?
  • Are you even referable?  Think about it.
  • Really, if we were missing in person do you still think putting a notepad and pen in front of me is a good idea?  **Please say no***

It’s only fair to present some alternatives;

  • Where are we connected on-line?  Hopefully where I am comfortable.  P.S.  do you really think I am sharing canned insurance articles
  • I am not at all opposed to saying thanks with a gift or money.  I hope you are not either.  But should I be offering you money in exchange for your friends contact info?  Do you like it when your email is sold to random vendors?  Do you like it when you are added to a newsletter list without opting in?
  • Seriously, ” you can enter our contest for a t.v. if you refer us to a friend….”  Come on.  Keep selling on price as well and let me know how that works out.   leads us to the next one
  • Be referable.  Seriously, I’ve been thanked several times for referring one person to another and a part of my response is always, ” no problem, thanks for being easy to refer…”
  • Still  one of my favorite “techniques” and still one I have nor will never use.  Try the digital version of this and become a connection on Linkedin.  All of their connections will see it.  How about you like/share something of theirs on Facebook and see what happens.  Even better, how about you proactively refer them in some way or bring other value

Anyway, just some thoughts.  Thanks for letting me share.  Do whatever you think works for you but remember, the world has adjusted and much of what used to “work” doesn’t.

01.07.15
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Why I took your customer?

Several times a month a new person hires me and I am shocked.  See I know I am “good” and I know how to do a lot of things.  But there is a recurring theme, there is really no reason why this opportunity should exist.  There is no reason why this person should have called.  But then again there are quite a few.

The one that set me over is something like this, husband and wife with the same agent for 20+ years.  Husband and wife fit perfectly into dozens of companies; married, great credit, college degrees, home owners, clean records.  He is also a business owner and the paths fairly regularly cross with the agent who should appreciate his business.  Sounds familiar?

  • You let me.  I didn’t take this person as much as you didn’t put any effort into keeping them.
  • You’ve had an agency for twenty years and you are acting that way.  STOP.  The year is 2014, time to get comfortable with it and start using the available tools.
  • Make your own rules.  Just because some book describes “typical coverage” doesn’t mean you need to do it.  Are you offering as much coverage as you have?
  • Grow with your customers.  Because if you don’t I will.  Seriously, loyalty goes to people first and maybe companies second.  Rates improve if you want them to.
  • You might disagree but the fact is you really don’t earn money off a rate increase.  You should be lean enough that the goal is to keep existing customers but you’re not.
  • Pay it back.  If you are doing it right you turn some amount of profit on that customer immediately.  So based on that you may  have been profitable on one person for twenty years.  Have you supported an event their a part of?  Donated to their charity?  Sent them some business?  Why not?
  • WAKE UP CALL.  We are in an old industry, think about the other things you are buying and compare the experience.  Seriously if studying Geico, Progressive or ay other online company does not wake you up look at Amazon, Zappos and about 10,000 other retailers.

This could go on for a while but I hope you get the point.  Thanks for letting me make some suggestions.

 

 

12.03.13
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Delusions in insurance

1. We want to be the largest in america…. WHO CARES my guess is your policyholders don’t.

2. We can save you $480 or 15% or an average of … WHO CARES reality is saving that amount of money just means something was wrong.

3. Rates go up due to inflation…MOSTLY CRAP rates go up to keep the bottom line healthy. If people knew how much money was floating around in insurance they would go bonkers

4. Discount double check, in good hands, join the nation, like a good neighbor…SLOGANS are for the company not for you.  Sooner the companies put more resources into helping their policyholders and less into marketing the sooner you will see insurance improve.

5. I’ve been with them for twenty years they are loyal to me…SURE AND I have a unicorn in my backyard and the Easter bunny lives next door.  Prove it, show me how they showed loyalty in return.**there are likely some exceptions to this but not many.**

just some thoughts.

06.10.13
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Can you send that to me in writing?

I say this a couple of times a week.  When it comes to insurance there are two specific times that this is a popular phrase; claims and loyalty.

With claims, I am asked “but will my rate go up?”  Odds are pretty good but it is not certain that your rate goes up if you file a claim.  I have seen plenty of awful driving records but since they have not had their records reviewed by the current company the rate is solid.  That doesn’t mean rates do not go up with claims, it just means that you have somehow avoided having your record looked at.  Also find it amusing to watch Nationwide and Allstate advertise “diminishing deductibles.”  Seriously, most people do not have claims.  The most common claim is an auto insurance glass claim and that already has no deductible.  In my opinion you are better off holding on to to your money.

 

How about loyalty?  I have said it before, please reserve loyalty for people that earn it not companies.  Should you be rewarded for your time with a company?  I think so, the longer you stay with a company the more profitable they can be.  BUT, Please show it to me in writing.  Unless you have it in writing let’s not “hope” your loyalty is worth something.

Just an idea, thanks for reading.

05.05.13
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Keeping the circle going

How many people do you spend money with that spend money with you?

How often do you CHOOSE to spend locally when an Internet or national chain option are available?

Now I am by no means perfect but I take the fact that I am a local business very seriously.  I have a massive amount of gratitude for those people that choose to spend money with me and therefore enhance the lives of my family.  So what else can I do?  Well for me it comes down to a couple of basic things;

  • If you have resources why wouldn’t you share them?
  • I can make my “network” stronger by introducing the various members than I can by making it bigger just to be bigger. BTW if your network is stronger so will be your business, your relationships and your bank account.
  • maxing out the effectiveness of my dollars and time
  • Because you never know

Now I really try not to over think it, not much different than “What does your agent do for you” .  It took a while to develop but once it does it is just so easy and feels really good so why not *it is really good for business as well*  Here are two things I did this week;

Months ago, a good client introduced me to a new client of hers(see it is easy and good for everyone).  Fortunately they trusted me to set up some insurance for their new business.  This week their company, Georgie Porgie went live!  So you could find out and do nothing or you can give them 10 minutes and post their link on your Facebook and Twitter and buy something from them.  Not a lot of effort but compound that and the results can be massive. Seriously Why Wouldn’t you do this? They chose to spend money with you, they are nice people, they are local, etc.  What else do you need?  By the way, the person that made the intro is a friend and is really good at what she does, yes I make introductions of friends to her whenever possible.  Easy, right?

Another instance, same idea; I was having a contractor do some work at a little rental my family owns.  Yes, I happen to provide his insurance so again; why wouldn’t you spend money with the people that spend money with you?  He is also really good.  So he was coming over so I was going to be home anyhow, figured I would call on an HVAC/Plumber I also insure.  Now it gets good.

How do you maximize what your dollars can do?

Well I was having my pipes cleaned out anyhow and I was having some work done at the rental anyhow(they are across the street) so I figured let’s try and max this out.  I like them both, I trust them both and they both spend money with me so why not introduce them to each other?  Now two skilled tradesman who never new each other  know each other, my tub drains way better 🙂 and some windows have molding.  Not bad.  What happens now is up to them.

How many opportunities like this can you create for your customers?

Start from a genuine place of wanting to share, apply some effort and watch what happens.  Why not?

Again, just some thoughts.  Do with them what you want?

 

04.04.13
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Who causes “higher” insurance rates?

Most people will immediately think it is the company.  The company sets the rates and the underwriting standards that you accepted when you signed your contract with them.  The company determines which of your tickets, accidents and claims will have an impact on your rate and for how long. ** Despite what you may have heard corporations are not people and cannot get tickets or have accidents or claims**

The company determines which of your personal  characteristics influence the rate.  They also decide which factors of the house or  other property you chose to buy will determine the cost to insure.  Insurance companies decide what the rates are where you  chose to live.  The company set up any billing fees that exist as well as any discounts that exist for paying your premium in one or two payments.  Each year before your policy renews the company mails you new paperwork to review so you have a chance to ask questions and make adjustments.  You  also have a chance to review everything on your policy and if you felt so inclined could call around to other companies for a review. **Per a Google search, there are about 2648 insurance companies doing business in the U.S. that offer auto and home coverage***

So who makes insurance rates higher?

P.S. You  also may be with an agent or company that takes advantage of your loyalty and offers you some sort of silly ploy about accident free credits, etc.

P.S.2 Just like when looking for somebody to date, there  is somebody out there that likes you and your characteristics.  Maybe it is time to find that company….and be willing to find a new one next year.

 

Just some thoughts to consider.  You have more control than you think.