Obsolescence is the state of being that occurs when an object, service or practice is no longer wanted even though it may still be in good working order.

Earlier this year, my wife and I were planning a trip to Mexico. Having never been there, we did what 85% of the rest of the world would do when planning a vacation; we went to the Internet. Once we identified three or four locations we really liked, we contacted a local travel agent to describe our needs and budget. After the agent went over several options with us, we chose the package that seemed to best fit our needs, and a week or two later our tickets arrived in the mail.

How would this process have been different if this had been 1958, 1978, or even 1995?

I would have had two options: Call a friend for a referral, or grab the Yellow Pages. Then I would have begun the process of calling local travel agents until I connected with a warm, friendly individual who could speak to me intelligently about my needs.

Due to the amount of time required to identify, contact, and speak to an actual person, most likely my search would have been limited to one or two service providers.

This illustration may seem silly since, obviously, the world has changed and no one in their right mind in 2010 would ever start their search using this method for a vacation, an insurance agent, or any other product or service for that matter.

Knowing this, why would anyone running a business continue to rely on a business strategy that has been outdated for a decade?

I have spent the last three years screaming this message at the top of my lungs, and I expect that every sane person reading this article is nodding in agreement.

I will challenge you with two questions that I ask agents every day:

1. Do you believe that 85% of consumers start their search for an agent on the Internet? (Notice that I said “start,” not “buy.”)

2. And if you believe this, then you must be spending 85% of your marketing time, energy, and resources on developing strategies to find, sell, and keep the modern consumer on the Web, right?

What percentage of agency owners and market­ing executives do you suppose will answer, “Yes” to Question 1?

As for Question 2, how about “Yes” to dedicating any time, energy, and effort to capturing the modern consumer?

Truth be told, there’s a huge disconnect between the belief system that must be in place and the actions necessary to make the belief a reality.

In other words, while an overwhelming percentage of agency owners will say that they believe that 85% of consumers start their search for an agent on the Internet, very few are willing to actually do something to make their agency more visible to the modern consumer.

As consultants to insurance agencies, we see outdated business models play out every day. Agency owners are still placing ads in the phone book, waiting for their phone to ring. If the phone does ring, in many cases these agents are unable to complete a transaction on the phone due to a lack of adequate automation, so they need to convince the prospect to drive to the agency. There is a very large population of insurance agents who believe this is the only way to do business, and they have done nothing to change their approach even though the industry is changing all around them.

So how will things go in the future for these insurance agents? Likely about the same as things have gone for travel agents.

When you step back and look at the underlying business purpose of insurance agencies, you have to understand that agencies are simply one part of a distribution system. Just as vending machine companies are a means to distribute soft drinks and department stores are a means to distribute cosmetics and clothing, and travel agents at one time were a means to distribute travel services and products, insurance agencies are a means to distribute insurance services and products to the consumer.

What too many insurance agents fail to recognize is that they are not the only means of distribution that insurance carriers are using or considering. Travel agents also failed to recognize this before it was too late.

The bottom line is that providers in any industry are primarily concerned about the bottom line. In the case of the travel industry, it simply made no sense for airlines, hotels, and car rental companies to continue paying commissions to thousands of travel agencies to handle their business for them.

It was much more profitable for the travel providers to work directly with the consumer and avoid paying commissions altogether, or work with larger and more efficient travel agents and brokers who offered visibility, marketing, convenience, automation, and multiple services to consumers (e.g., Expedia, Travelocity), so the increased volume of business made it worth continuing to pay commissions.

Insurance companies have also been looking at making changes and continue to analyze the economics of their distribution system of independent agents. And while agents argue that they have value because they provide a necessary service and relationship to consumers in their own communities, insurance companies are becoming increasingly aware that consumers in local communities may never even find their local agent because most of them aren’t driving down Main Street or flipping through the phone book these days to locate an insurance agent. They’re shopping on the Internet.

For insurance agents of any size in any community to avoid what happened to travel agents, they must make themselves visible and relevant to consumers and insurance carriers alike, by taking the first step and investing in Internet marketing. As scary as that may sound to many agents, it is an undeniable truth that your next-door neighbor is more likely to contact you for an insurance quote by seeing your Web site than by walking past your front door.

To plan a vacation in 2010, I wouldn’t need to go through any of the inconvenient steps I went through just 10 years ago because now I can shop on the Internet, easily price the different options, and work with a direct provider or a broker who offers me many different travel choices—without ever leaving my home.

So 10 years from today, will consumers be willing to go through any inconvenient steps to buy insurance, or will they prefer to shop on the Internet, price the different options, and work with a direct provider or a broker who offers many different insurance choices, without ever leaving their home?

You don’t have to wait 10 years for the answer, or five years, or even one year, because it’s already happening.