DCM provides a unique "pay for performance" approach to its clients
By Dennis Pillsbury
Darren Clevenger, president of DCM, Inc., started the company in 1995 in his garage with a dream of creating a company that operated as a true marketing partner for agents and insurers.
In 1995, when Darren Clevenger started DCM, Inc., in his garage, he wanted to create a company that operated as a true marketing partner for the insurance agents and carriers that became its clients. The company soon moved out of the garage into a "real office" and has moved twice more to accommodate rapid growth. "It's an exciting ride and it keeps getting better. I really feel lucky to be surrounded by such great people and all of our success is due to their efforts. I'm just lucky enough to get to watch it all," says Darren, who serves as president of DCM.
"We start out by consulting with an agent or carrier to help them develop a marketing program that will succeed," says Darren. "We believe that helps to differentiate us from others in this business. We'll tell an agency or company if a marketing plan doesn't make sense and offers little opportunity for profit. If the program doesn't show a positive ROI for our clients, we won't take the contract."
Darren continues that his team of consultants, headed by Vice President of Sales Dion Gutierrez, will help agents and companies revise a marketing plan and develop a new one if necessary. "We sit down with them and go through their current book of business to try and determine if they should go after more of a market they've already penetrated to a certain degree or if they should look to different markets altogether.
"It's really an interesting exercise. Many agencies often don't know just how their total book breaks down by industry. If you ask the producers, you'll invariably get a different answer from each one."
Once the marketing program is agreed upon, DCM will take the agency or company step-by-step through the process and actually develop profit projections. "We try to be conservative with our clients so they can be comfortable with the projections. We really want and need them to succeed because we depend on repeat business. We have no advertising budget and do very little marketing. We depend on word-of-mouth, and for that to work, we have to help our clients be successful."
And DCM backs that up by actually having a contract that is based on "Pay for Performance." Under the agreement, DCM guarantees their projections if they are doing a complete marketing program. If they are involved only in appointment setting for an agency, DCM gets paid only if appointments are set.
The latter is what Bill Houseal of Houseal Insurance & Bonding, Birmingham, Alabama, uses them for. "I'm a one-man shop," Bill says, "and what I do is prospect to keep new business flowing. But cold-calling will just kill you. The money I spend with DCM is a bargain. They get me six to eight good appointments a month. Seventy-five percent of the problem is getting in the door and DCM does that for me with pre-qualified appointments."
Bill explains that he started working with DCM about three years ago after getting out of a "bad partnership deal. I needed to do something to grow the business by myself. There are a lot of good people in the insurance business who could be helped by this," he concludes.
DCM works with agencies of every size, ranging from the one-man shop to some of the largest agencies in the country. In fact, in the six years in which it has been operating, DCM has worked with 16 agencies that were recognized as Marketing Agencies of the Month by Rough Notes. "These all are agencies that are among the most successful marketers in the country," Darren points out. "I think it is a tribute to our company that they have chosen to work with DCM to help them grow."
Innovative programs
DCM is much more than a telemarketing firm. In fact, the "T" word is discouraged. "We're not those people who are interrupting your dinner," he points out. "Our people are responsible for talking with chief financial officers and other people at commercial firms who have responsibility for the firm's risk transfer needs. To succeed, they must be able to speak knowledgeably about insurance with these people and convince them that our client has something to offer. Every year, each one of our people goes through
60 hours of training and education
to keep well versed and up to date on what is happening in the insurance industry. They also have to have good people skills."
DCM also has introduced MPower, a new online lead, appointment and report system that allows all clients to view current project results on a 24/7 basis. According to Darren, "I had the idea to offer clients online access to all information necessary when keeping tabs on an outsource firm, but Internet technology wasn't quite up to snuff. When the technology finally caught up, I was lucky enough to have Sean Fipps, our vice president of operations, to nurture and guide the project. We're the only insurance prospecting company offering this kind of access to sales lead data 24/7. The idea came easily to me but it never would have happened without Sean's tenacity."
But the quality of the people and its technology are not the only things that make DCM different. The company also uses its vast array of marketing data to design innovative programs for its clients.
For example, one of the company's broker clients used DCM to help with acquisitions of other agencies. "The broker wanted to target agencies for acquisitions that were located in areas that had the highest concentration of niche markets in which the broker specialized. We took their database of customers, analyzed the demographics and then programmed that information into a mapping software to show them which areas of the country had the highest concentration of businesses within their areas of expertise," Darren explains. "Based on that, the brokers targeted agencies in closest proximity to their desired targets and based much of their expansion/acquisition strategy on that information."
Sean Fipps, vice president of operations, nurtured and guided the MPower project, which resulted in an online leader, appointment and report system that allows all clients to view current project results on a 24/7 basis.
Another example involved a mass marketing campaign for a carrier that wanted to reach the policyholders of another carrier that was declared insolvent. DCM was able to put together a blitz marketing campaign that drove more business to the client.
One carrier client decided to focus on every business in a certain SIC (Standard Industrial Classification) Code in a 25-state region. However, the carrier first wanted to make certain a marketing campaign would be cost effective. "We performed a test marketing campaign in one state, analyzed all the numbers, including cost of list, telemarketing, quoting and so on and compared those costs to the premiums written," Darren says. "We showed the results to the carrier and it turned out to be profitable in the one state. We then applied the numbers to the other 24 states and gave them a projection in terms of budget versus premium, in essence, their return on investment. That campaign has been going on for 18 months now and we have exceeded the projected premium for the client. The client has now asked us to help them go into new markets."
No turnover
One of the reasons for DCM's success is that it has managed to keep its well-trained staff--a singular accomplishment in a business that is known for its high turnover. "Our core staff has been with me from the beginning," Darren notes proudly. He credits a good part of this to his "great controller, Rowena Rodriguez, who has helped find ways we could afford the best benefits packages, including stock options and a 401(k) plan." But another equally important part is that "we treat our people like human beings. I have always held the opinion that the company needs these people more than the people need these jobs. Southern California is a land of opportunity, and I feel lucky that these people choose to work here."
Darren continues that this was reinforced only six months after going into business when his childhood friend and fellow DCM employee, Ed Portillo, suffered a fatal epileptic seizure. "I was devastated by the loss of my best friend," says Darren. Compounding the tragedy was the fact that "we were only a few months short of our goal of having a company health/life insurance plan. From that moment I realized that I had a duty to provide more than just a place to get a payckeck for the employees and their familites. It was my, and the company's, responsibility to offer as many benefits to its employees as reasonably possible."
He says: "We have a lot a family members working here. It's really cool that people like working here well enough to refer their family members here. We strive to maintain that type of atmosphere and I've even put our communications manager, Charlie Tan, in charge of planning at least one fun company event per month. The great thing about this place is that we all really like each other. We've had many marriages and numerous children born to DCM people over the years. We've all attended baby showers and wedding receptions and have picnics and other special outings for our employees. Most recently, we all went to the new Star Wars movie opening." And the next wedding reception apparently will be Darren's, who's getting married in September.
DCM also pays its employees well and has paid bonuses to many of them for jobs well done. In addition, monthly recognition plaques and gift certificates are presented for outstanding performance.
"We've also never had a lay-off," Darren says. "And we've planned carefully for that. We don't take on jobs that aren't sustainable." He points out that "we even turned down a deal from Microsoft that was a one-year, $2 million transaction because there was no way to sustain it. We like what we've built here and we want to keep it a good place to work."
DCM is endorsed by Travelers and the Ohio Casualty Group. Last year alone, based on a study conducted by DCM Customer Service Manager Leah Snodgrass, its clients wrote more than $150 million in new business premium, bringing the total to close to $500 million in new business premium since DCM started in business. *