Marketing Agency of the MOnth

Associating with associations

It always comes down to relationships at Logan Lavelle Hunt

By Dennis H. Pillsbury

In real estate, common wisdom says there are three important ingredients: location, location, location. Well, in insurance, it's relationships, relationships, relationships. "It always comes down to relationships," says Stan Logan, executive vice president in charge of sales management at Logan Lavelle Hunt Insurance & Wealth Management, LLC, Louisville, Kentucky.

Stan continues, "One of the most important and difficult things is finding young people who understand that it will take time. Drop-ins at a business because you know the owner or one of the people can be very effective. But you have to remember that you're not selling anything, you're just building the relationship, and that can be difficult for a hard-charging young producer."

Jim Lavelle, secretary/treasurer, adds, "We test our applicants to see that they have the qualities for selling, but we also look to see if they have the patience to build the business. And we let them know about the knowledge that is available to them from our back-office people. They aren't limited to selling one line of business or to one type of business. We don't expect them to have the expertise on their own. We emphasize the importance of this being a team effort where they can depend on others to back them up."

Stan and Jim both understand what it's like to be the new producer. They followed parallel courses entering the insurance business. Each one went to work at his father's agency.

Jim was a fledgling producer at Lavelle Insurance, an agency that was founded by his grandfather, Charles. Jim Sr. took over the reins when Charles passed away in 1953. His brother John was already working at the agency when he started in 1972. Stan's dad also worked at Lavelle Insurance until he purchased United Insurance and headed up that firm, where Stan came on board as a producer. Then in 1996, the two firms merged and became Logan Lavelle. It was a reuniting of family members, as Stan and Jim are first cousins. Trent Hunt, who worked out of the Indiana office in New Albany, was named a partner in 1997.

Moving into other areas

The agency remained focused primarily on property/casualty coverages, with a strong specialty in construction. "We have endorsements from 27 different trade associations," Stan notes. "We've always had a laser approach to our market niches, getting intimately involved in their associations." For example, Stan continues, "I am a director of the National Home Builders Association.

"There's a big commitment involved in partnering with these associations," Jim adds. "We attend and participate at all their meetings. We have to be active and responsive to their needs, especially today when their members have been experiencing difficulties."

As part of that effort, the agency realized it needed to offer employee benefits and financial products. "We had to provide the associations with new products that would help them attract new members," Stan notes. One result of this was the purchase of a benefits agency, Winston & Co., in 2006. Since that purchase, Steve Church and Margaret Howser, who were with Winston & Co., have also been named partners of Logan Lavelle Hunt.

In 2007, the agency began offering financial products and entered the mortgage brokerage field in 2009. "These ventures have paid off," Jim points out. "We've already received endorsements from some of the associations for these new product offerings. And it's important for us to see that because we were concerned when we added the financial side about the negative impact of compliance issues. It has definitely limited what we can do in our marketing and advertising, but it's been worth it."

Today, the agency has total revenues of about $7.5 million, with 55% coming from commercial property/casualty, 25% from benefits, 5% from financial products and 15% from personal lines. There are 42 employees in Louisville and six in the New Albany office.

The commitment to association relationships is a ready-made opportunity for young producers, Jim points out. "Our young producers will take on an association or two as their project. The older producers who are active in those associations help out with that effort. It really helps to give us a depth of relationships within the association."

"Our latest project," Stan says, "involves the Kentucky Building Materials Association, where we are going out and trying to get new members to join the association. Associations want to expand, and the more programs they can bring to the table, the better their odds of doing so. That's where we come in. There's a real unity between the associations and us. We expect to be quoting about 30 different accounts by year end and anticipate closing most of them."

New business is key

"Our model of service 'above and beyond,' particularly with our association partners, has been great at helping us keep our clients," Jim points out. "Our retention rate is very high. But the economic downturn has made it clear that that is not enough. Our construction clients are experiencing some real tough times right now. Many of them have had to reduce their workforce and that translates to lower premiums and, of course, lower commissions. And the only way to counteract that is to write new business."

Stan picks up, "We established a new business department to spearhead that effort. The people in the department know the companies and products and are there to support the producers. It allows the producers to focus on producing, knowing that the new business department will supplement their efforts. The people in the department back up the producers when they need information on coverages for a particular business. They also know which companies are interested in that particular account, so they can get the best coverage and price for that business."

"The people in the department are young and aggressive," Jim adds. "We provide a monetary incentive for getting new business on the books and have quotas and contests to keep them energized. We want them to succeed so they can see that they're in a business that can sustain them for a long time to come."

Turning to his role as sales manager, Stan comments that the economic downturn has made his job tougher. "I have to get producers to understand that, unfortunately, it's normal to see shrinkage in the book today and that new business is key. They need to understand that they are doing better than most. One thing that we've started to do is look at customer count so they can see that we're still growing and that there is a future here. Our customer count is up and that means that when better times arrive, we are well positioned to reap the benefits."

Other growth opportunities

"We have a lot to offer other agents and other agencies," Jim adds. "We see mergers and acquisitions as another way to increase revenues. We've been through several mergers and each one was different. We try to work around what makes sense for us and for the other agency. It always has to be a win-win situation for it to work well.

"Our partnership with the associations is a real positive, as is the fact that we have moved forward with social networking initiatives to keep in touch with people in the associations. We use Facebook and Twitter and are looking at other beneficial ways to use the Internet," Stan says.

Agencies that know Logan Lavelle Hunt also see that it provides a fun, family atmosphere. "We have a summer picnic, a Derby party, a cookout with hot dogs and brats," Stan notes. "Santa visits the agency at Christmas. We've had chili cook offs and Halloween costume contests. One of our employees owns a houseboat and we've had outings on the houseboat for both producers and service people.

"Another thing that I am very proud of is the fact that my door is always open," Stan continues. "One of our new producers who came on board from another agency mentioned that he had never seen such an open-door policy. He's planning on staying with us for a long time."

The agency's association with associations is a logical outgrowth of the great respect it has for the insurance associations that represent agents throughout the country. Stan is a two-time past president of the Kentucky PIA and currently is a national director. The agency also is active in the Big "I" as well. "We try to make a difference for the industry," Stan says. "We support both associations through their PACs. Anytime they have called on us, we have been there. And they've been there for us. We are continually learning from the other members. There's a cross-pollination that helps all indepen-dent agents and we are proud to be part of that."

Rough Notes is pleased to salute Logan Lavelle Hunt for its commitment to the independent agency system and its adherence to the principles of customer service that makes the system the best insurance distribution system in the country. They indeed deserve recognition as our Marketing Agency of the Month.