LEARNING FROM
TRIAL AND ERROR
Use experimental marketing units to prepare your agency's future
By Alan L. Shulman, CPCU
An EMU can help you learn which new programs and marketing methods are worth your while to pursue, and which are not.
Right now, your competition is sniping at your clients, picking them off a few at a time. But soon you'll be facing your toughest competition ever: bigger bolder agents, banks and their insurance partners, plus an endless variety of Internet direct marketers and employer/association-sponsored plans. To add new accounts, as well as replace the business you'll lose to these competitors, now is the time to experiment, while there's still time to learn from marketing mistakes. A great way to accomplish this is by forming an experimental marketing unit, or EMU.
An EMU is an agency team that invests a few hours each week testing the sales potential of various promotions, using automation as one of its primary research and sales tools. This unit can help you learn which new programs and marketing methods are worth your while to pursue, and which are not. The results of their studies can send your organization into new and exciting directions.
Set up the teams
Start by putting together two EMUs consisting of select CSRs and producers. One crew is for personal lines; the other is for commercial lines. Then, to assure the open exchange of ideas, exclude any agency managers from these teams, if at all possible. Be sure to allow both groups the freedom to meet away from the office (and separately from one another) for extended lunch hours, once a week. Early on, the units can build lists of marketing ideas. They may brainstorm for new concepts, reconsider past programs that weren't well implemented, ask company reps for input, and freely borrow from larger, better financed organizations. Or, they might use our top 10 tips (on page A19) to get started. Use your advantage: many major insurance marketers are top heavy with managers and overhead, and lack the flexibility to analyze a continuous stream of fresh ideas.
Once your units have selected their initial programs, it's time to test market them. But before a team can convert its concepts into action, the unit will need some time and a small cash budget to build a mini-version of each promotion.
Money-saving tips
Don't spend a ton on printing marketing brochures. Instead, create your own starter sets using desktop publishing software such as Microsoft Publisher '98. Also, contact only a few hundred sales leads in the beginning, rather than accumulating them and then going after every known prospect. In lieu of hiring telemarketers, make all of your initial calls in-house. Then, after 13 weeks (a calendar quarter)--allowing for some last-minute tweaking--each program under consideration should be expanded or dropped. You as the manager, not the EMU, should decide its fate, as the team will be too close to be objective. When an idea doesn't show promise, move on to another, bringing over the lessons you've learned. Once a winner is found, the unit can disclose its magic formula to those charged with continuing its success, freeing the EMU to resume its explorations.
Agency Ideas' top 10 tips for your experimental marketing unit
Quotes at odd hours Offer evening and weekend "second opinions" over the phone on auto and home insurance. To do this, you can hire an answering service to collect rating information, then follow up with a quote. Or, you can set up a cash-shy agent or CSR to deliver complete quotes from home. In this case you'll install a rating PC, printer, and special local or toll-free number with a distinctive ring. (This may be done without physically adding an extra phone line.) Direct marketing giant Geico advertises 15-minute auto quotes at all hours. So if you want to compete in personal lines, consider this tip.
Umbrella hit-teams Umbrella and excess liability policies are relatively simple to underwrite, price, sell, and retain. Use EMUs to set up procedures that will identify your agency's most likely personal lines and commercial lines umbrella candidates--then solicit them with individualized, computer-generated direct mailers. "Hit teams" made up of sales-oriented CSRs can carry out the program once preliminary efforts prove successful.
Endorsements by mail Certain additional premium endorsements can be sold entirely by mail. An EMU can make this happen by designing a direct mailer that describes a recommended upgrade, estimates its extra annual premium, and incorporates a return order form--complete with room for an insured's approving signature. The EMU will fine-tune the point-of-purchase mailer, then turn the successful program over to a CSR to continue. Potential endorsement candidates include increased coverages for condo units, replacement cost on contents, HO coverage form upgrades, and increased auto limits.
Personal insurance shoppers Start a shopping service to help busy executives and others obtain high-value insurance protection for their homes, cars, life and income. These buying services already exist for gifts and groceries. Their top selling point is attentive personal service. Let an EMU adapt this proven concept to bring in major commission sales and executive referrals.
Catalog of insurance services Use EMUs to test the waters for selling routine personal lines or commercial lines agency services fora fee. Examples include replacement cost surveys, videotape inventories, MVRs, driver safety courses, fire rate and business income reviews.
Resurrecting the dead If your office is like most, you have file drawers packed with canceled policies. EMUs can use varying approaches to resolicit your agency's lost personal lines and commercial lines accounts. They also can set up a dead-file trading network with competing agents.
Workers comp audits Aggressive CPAs charge clients to cut their comp premiums by using secrets revealed by a former auditor in his Workers' Compensation Consultant software ((800) 444-5889). Your commercial lines EMU can use the same low-cost program (along with experience modification software) to generate fees or to compete for new or lost business.
Private-label programs Invent your own competitive advantage. Let an EMU bundle target-specific agency services, along with standard personal lines or commercial lines insurance contacts, to create and test market unique agency "package policies."
Premium financing Using a turnkey software system, an EMU can set up a premium financing operation.
Payroll-deduction A personal lines or commercial lines EMU team is perfect for testing the waters for employer, association, bank-sponsored personal lines, small business, workers comp, and other sales.
EMUs can help you separate the adventures that will unlock tomorrow's sales success from those that will only use up scarce resources. These units, however, aren't intended to be your final production teams. Their job is to gain hands-on experience, to revel in the excitement of experimentation through test marketing, and finally to pass on the knowledge they've gained to others. Each success can be built upon, while failures should simply be noted and dropped.
As your competition grows ever larger and more aggressive, EMUs will enhance your future survival. After all, as long as you're in business, you have a fighting chance to stay that way. *
Find out more at "10 Ideas to Promote Your Agency Using Off-the-Shelf Software," just one of 37 workshops at ACORD Technology Conference '99.
 The author
Alan L. Shulman, CPCU, is author of the popular book, 1001 Agency Ideas, published by ACORD. He also publishes "Agency Ideas," a sales and marketing newsletter. |