Marketing

Instant brand for agents

Growth of Smart Choice provides infrastructure for new franchise program

By Phil Zinkewicz

The Smart Choice® Agents Program was born more than 20 years ago out of sheer frustration on the part of one man, an independent insurance agent who just wanted to do a better job for his clients. Today, the program is a prime producer for the leading carriers in the insurance industry that want to take on small market business. Moreover, Smart Choice recently embarked upon a franchise program that will open the door for its agent members and for agents who are not members to become franchisees, to chart their own course with a recognizable brand that is synonymous with success.

That success was not an overnight one, as they say in the theater. The story really begins in the late 1980s-early 1990s, when Doug Witcher, president and founder of Smart Choice, was operating his own agency. With all due respect to Charles Dickens, for Witcher it was the best and worst of times.

“It was the worst of times because I was trying to obtain appointments with the large, recognized carriers to better serve my client base,” says Witcher. “But every time I tried to access new carriers, I was warned by my then-current companies to keep my production up or they would drop me. One of them actually did drop me. As it turned out, that was the best thing that ever happened to me in my career.”

It was then that Witcher had an idea. “I began to explore the possibilities of pooling the resources of a number of agencies writing small market business and then offering that business to name brand companies,” says Witcher. “I began talking to companies about the concept and, by 1994, got permission from two companies to try it out in North Carolina. The results were favorable and, in 1996, they asked me to expand with other agencies. By 1998, we had grown to 147 agencies in North Carolina, and then started moving into other states.”

According to Witcher, the growth continued. By 2000, Smart Choice was active in four states, had 424 agents and had written premiums in excess of $49 million; by 2002, it was active in eight states, had 715 agents and premiums of more than $93 million; by 2005, Smart Choice was in 17 states, with 1,854 agents and had almost $184 million in premiums; and, at the end of last year, it was active in 27 states, with 2,500 agents and more than $300 million in premiums.

However, in 2004, despite the consistent growth, Witcher began discussing with his staff the changes that were taking place in the insurance industry. “We felt the agency system was not keeping pace with the changes,” Witcher says. “We knew that the captive agency system was continuing to grow. So, we explored the possibilities of creating a hybrid—to take the best of the independent agency system and blend it with the best of the captive agency system.”

Thus, after two focus groups in Georgia and Illinois, the Smart Choice franchise concept, called Smart Choice Insurance Center, came into being in January 2008.

Joe Fisher, executive vice president of franchise operations, takes up the story from here. “We conducted a practice launch in North Carolina on January 24 at a “Discovery Day” held at our headquarters. We hand-selected about 30 North Carolina agents and presented the Smart Choice Insurance Center concept to them. The franchise offering was extremely well received and the feedback we got from this group was invaluable.

“There were, however, some excellent suggestions that we have since incorporated into the offering,” Fisher continues. “For example, it was quite clear that, while they liked the initial 15-year term of the franchise, a longer renewal option would be more desirable. On March 20, we launched a franchise Discovery Day in Kentucky. Once again, we had a very receptive group of agents. Our official launch in North Carolina was held on April 3. We have since signed up our first franchisees.”

Fisher explains: “Through the Smart Choice Agents Program we provide markets and product training for agents. Our Smart Choice Insurance Center franchise is an opportunity for agents wishing to take their businesses to the next level. We have combined the strongest characteristics of the captive agencies—recognized brand and exceptional training and marketing—with the undeniable strength of independents—freedom of choice and the ability to represent more than one company. So we have created a model that we believe will change the insurance industry.”

Because of the infrastructure already in place through the Smart Choice Agents Program, the group is in a unique position to be able to make the franchise opportunity available in many states in a relatively short period of time, according to Fisher. “For any organization wanting to grow a brand quickly, this is an enviable position,” he says.

In addition to North Carolina and Kentucky, Smart Choice plans to offer the franchise program in South Carolina, Tennessee, Virginia, Georgia, Arkansas, Ohio, Indiana, Alabama, Pennsylvania, Texas, Wisconsin, Illinois, New York, Arizona, Connecticut, Missouri, Maryland, California, Nebraska, Iowa, Minnesota, Kansas, Colorado and New Mexico by the end of this year. “We anticipate being in all 50 states in the near future,” Fisher says.

Fisher says that Smart Choice’s goal is to grow the Smart Choice Insurance Center brand quickly but responsibly by approving only the applications from agents from which the model will benefit, while upholding the high standards associated with the brand.

“It might seem tempting to accept anyone who can write a check into the franchise family, but this would be a grave mistake,” Fisher explains. “In mountain climbing there is a saying: ‘You are either an asset to the rope, or a liability to the rope.’ In other words, depending upon a climber’s skills, he or she can help the other members of the climbing team succeed or, conversely, he or she cannot only jeopardize their chances of summiting, but potentially put them in harm’s way.”

Some of the qualifications that Smart Choice Insurance Center will consider when taking on agents, Fisher says, are: length of time in the insurance business, the amount of annual premium produced and their current financial condition. “We will take it several steps further and get to know the candidates, their reasons for wanting to join the franchise and, most importantly, help them analyze whether this is the right opportunity for them.”

Fisher says also that Smart Choice will respect its franchisees’ ability to run their businesses and not try to micromanage their operations. “However, we will require that each of our franchisees undergo comprehensive training. This will help ensure a consistent level of excellent service to their customers and give them the tools needed to grow their agencies.”

He continues, “In addition to striving for consistent and predictable levels of excellent customer service and marketing programs, uniformity will be achieved, among other things, through common signage, Web site, business cards, letterhead and marketing initiatives.”

Finally, Fisher says: “Our goal is to keep the barrier of entry low and allow our franchisees to put their hard-earned money back into their businesses. Our franchisees will have the flexibility to write all lines of insurance. Insurance markets are not provided through the franchise offering. We envision many of our franchisees obtaining markets through the Smart Choice Agents program, although this is certainly not a requirement to become a Smart Choice Insurance Center owner.”

A major element of the Smart Choice Insurance Center concept is education and training. For that reason, Smart Choice has established a University under the guidance of Mary Quinn, Ed.D., chief learning officer. “Our goal is to provide hands-on training to our Smart Choice agents,” says Quinn.

“Our experts in the agency business will provide workshops on such subjects as managing agency goals, establishing best practices behavior and sales call techniques. In addition, we have training in employee management, agency leadership and new technologies. We plan to begin offering continuing education programs as well. Learning opportunities are the hallmark of Smart Choice,” she explains.

Paul Taylor, executive vice president of the Smart Choice Agents Program, predicts that this original brainchild of Doug Witcher will continue to grow while the franchise program reaches fruition. “We feel the franchise program should be open to all of our Smart Choice agents and those who do not qualify, we will work with them so that they do.

“We have 62 companies that we represent including Travelers, Safeco and MetLife Auto and Home, AIG, Encompass, among others,” Taylor continues. “We work with these companies to give our agents the best products and the highest commissions. We expect to add one agent a day to the Smart Choice Agents Program, which is pretty good in a soft market.”

So, for Doug Witcher, that day about 20 years ago when a company dropped his agency was a pretty good day after all. *

For more information:
Smart Choice
Web site: www.smartchoiceagents.com