An essential marketing tool that every insurance agency should have is a marketing communications plan.  One of the weaknesses frequently identified in an agency SWOT analysis is the lack of such a plan. (If you missed my earlier posts on the SWOT analysis, you can click here to learn about SWOT and how to use it.)

In my opinion, three imperatives make up the backbone of any effective marketing communications plan:

Showcase your expertise.

You’re an expert in your field, but do your clients know this?  You don’t want them to think you’re just an insurance order-taker.  You want them to think of you as their trusted advisor.  You need to carefully consider how you present yourself and your firm in everything from the designations you display to your choice of communications media.

Provide excellent customer service.

Among other things: identify and anticipate client needs; be a good listener; make customers feel important and appreciated; under-promise, over-deliver; treat your employees well and create a culture where good customer service comes first.

Communicate with customers regularly.

Insurance experts used to recommend that agents contact clients at least seven times a year. Safeco, for instance, recommends that agents “touch” clients 12 to 24 times a year. How many times do you contact your clients every year?  And remember, sending invoices doesn’t count!  You want quality communications to help you stay top of mind with clients and prospects.

What do I mean by “quality communications”? Here’s a list of some of the resources available for achieving contacts or “touches” with your clients.

• Calendars — what better way for people to see your name everyday!
• Phone calls — twice a year to check up on any changes the client may have overlooked
• Invitations to seminars or webinars —  events hosted by you, where you demonstrate your knowledge and expertise
• Brochures and postcards — focused on specific cross-sale products
• Client appreciation cards — celebrate birthdays, holidays or send a thank-you for a referral
• Social networking —Facebook, LinkedIn, and Twitter— blog-posting is great for this
• Newsletters — probably the most useful marketing tool in your kit.

Different situations suggest different tools. Of course one of the most convenient communications tools is your client newsletter.  Unlike phone calls or even social media, it doesn’t require much of your time, yet it makes your branding visible on a regular basis and demonstrates your expertise.

One easy way to plan your marketing communications is to create a calendar of contacts or “touches” for the year. You can use this calendar to mobilize your people and resources to achieve your communications goal.  Getting your newsletters out is simple if you use a turnkey publication, like Smart’s client newsletters. But the other “touches” take careful planning and preparation.

If you’d like to see an example of how a communications planning calendar might look, you can download one I made up here.  If you would like a blank version of this template so you can prepare your own communications planning calendar, you can download it here.

In my previous post I showed how the SWOT I developed for ABC Insurance could give us some ideas for formulating a few specific goals and objectives for the firm: 

1. To help its clients understand the Patient Protection Act and help them cope with rising health care costs, ABC wants to offer their clients more education and advice (thus capitalizing on one of its strengths: a knowledgeable sales staff).  This should also offset one of its weaknesses:  its low retention rate (maybe it conducted customer surveys that showed this was the result of lack of frequent contact with the agency).  This should also mitigate a threat from its competitors, as well as address the other two threats mentioned in the Threats section.
2. ABC has also decided to place special emphasis on informing clients of the benefits of voluntary benefit plans and helping them set up voluntary benefit plans (an opportunity investment).
3. ABC has decided to hire a wellness consultant and start selling wellness consulting services to its clients (more opportunity investment).

SWOT	Beneficial (Capitalize)	Harmful (Shore up)
Internal(Your agency)	Strengths Well-defined target markets in small to mid-size business sector: 20-100 lives. Experienced, knowledgeable sales team.	Weaknesses Poor retention rate Low visibility/lack of brand awareness
External (Your environment)	Opportunities(Invest) Keep clients informed of PPACA, insurance product changes and impact on clients Diversify group product line: add dental, eye care and other voluntary products; also, add “wellness” consultancy and/or TPA	Threats(Identify) PPACA Competitors who add more value Employer’s concerns about spiraling health care costs and regulatory changes

Now we can set some objectives for ABC:

• Objective One:  Help clients better understand today’s health insurance environment.
• Objective Two:  Cross-sell existing accounts with voluntary benefit products.
• Objective Three:  Hire a wellness consultant and begin marketing wellness services to its clients.

Once objectives are set, the last step is to use the objectives to formulate goals that are specific and measureable:

• Goal One:  Develop a seminar to evaluate today’s health insurance environment for employers.  Invite all current clients, schedule follow-up meetings with each attendee.
• Goal Two:  Use the seminars as a way to educate clients about voluntary benefits.  Set a target of 10% of agency premium for voluntary benefit sales in the first year.
• Goal Three:  Use the seminars as a way to educate clients about how wellness services can ultimately reduce their costs and increase employee satisfaction.

These goals are specific enough, but to make them measurable you would also set a target completion date and quantify an acceptable benchmark.  Some ways to set benchmarks, for example, would be to aim for a specific dollar amount or target a percentage of total sales in your goals.

To sum up, once you’ve collected and analyzed the data using a SWOT diagram, SWOT analysis can help you set tangible marketing goals for your agency.  You can also use the SWOT method to plan other aspects of your agency operations.

I’d suggest you go through this exercise yourself, if you’re an agency principal, once a year. It doesn’t even have to be a formal process.  You can do it on the back of a napkin at lunch with your partner, if that’s your style.  You might also want to involve your staff in the process.  They will bring important insights and if they are part of the process they will buy into and become committed to the goals you set.

Try it out.  I think you’ll get a lot out of it.

If you would like to view a video presentation of this material that I recorded as part of a sales offer to NAHU members recently, click here.

This time I want to flesh out specifically how using a SWOT analysis can help you create an insurance agency marketing plan.  To do this, I made up an agency called ABC and wrote a brief SWOT analysis for it on this page.  ABC’s book of business is about 80% employee benefits, an asset that I show here as a strength.  The other strength I show is ABC’s experienced and knowledgeable sales team. On the other hand, for ABC’s weaknesses I show a low retention rate and poor brand awareness.

In the external environment, ABC sees the Patient Protection and Affordable Care Act and employers’ concerns about the cost of employee health benefits as threats. One other threat I identify comes from ABC’s competitors.  They seem to be adding more value to their client relationships than ABC; maybe they communicate with their clients more frequently, offering them a broader range of services perhaps.

What are the opportunities ABC can take advantage of in this environment?  Customers need help understanding and dealing with the Affordable Care Act.  They also need help dealing with increasing health benefit costs.  There is another opportunity in that most employers don’t take advantage of voluntary benefits, which they could benefit from since voluntary benefits can improve employee benefit packages without much if any cost to the employer. Employers can also benefit from wellness and other services that could mitigate their health care costs.

SWOT	Beneficial (Capitalize)	Harmful (Shore up)
Internal(Your agency)	Strengths 1. Well-defined target markets in small to mid-size business sector: 20-100 lives. 2. Experienced, knowledgeable sales team.	Weaknesses 1. Poor retention rate 2. Low visibility/lack of brand awareness
External (Your environment)	Opportunities (Invest) 1. Keep clients informed of PPACA, insurance product changes and impact on clients 2. Diversify group product line: add dental, eye care and other voluntary products; also, add “wellness” consultancy and/or TPA	Threats (Identify) 1. PPACA 2. Competitors who add more value 3. Employer’s concerns about spiraling health care costs and regulatory changes

 

Given the situation I’ve placed ABC in,

• What strengths can it capitalize on?
• What weaknesses should it shore up?
• What opportunities should it invest in?
• What can it do to mitigate the threats that have been identified?

These are the key questions to ask as we begin to formulate some ideas that can be turned into objectives and goals for ABC’s marketing plan.  Looking at ABC’s SWOT and asking these questions will help us develop a solid marketing plan for the agency.  One helpful technique is to match up the squares in the matrix so that weaknesses and threats can be offset by strengths and opportunities.

An obvious match for ABC is to link employers’ concerns about the Affordable Care Act and rising health care costs with ABC’s expertise.  ABC can tap into the experience and knowledge of its salespeople to help clients understand their options and increase client satisfaction.

Now we’re ready to formulate some ideas.  We can match up ABC’s “expertise” strength with its clients’ desire for “information” opportunity — as well as the “threat” from the Patient Affordability Act.  This of course raises the question, if ABC’s sales team is going to spend more time educating clients how will it make money?  One solution or idea might be to go to a fee for services model.  Another idea is to educate clients about the benefits of providing voluntary benefits such as health and vision care, disability and critical illness coverage and so on to employees.  Yet another idea would be to develop new services such as a wellness consultancy  and a TPA.

In my next post, I’ll discuss how to use these ideas to create an action plan and make the work you’ve done with your SWOT really pay off.

To get a blank version of the SWOT template I used, just click here.

To read the third post in this series, click here.

 

Last month I wrote a post about the BCG (Boston Consulting Group) matrix, which is a quick and easy way to examine your insurance book of business, and how to use it to start developing your marketing strategy.  Another tool for developing your marketing strategy, widely used by marketing consultants, is the SWOT analysis.

SWOT stands for strengths, weaknesses, opportunities and threats.  The first step in performing a SWOT analysis is to identify your firm’s strengths and weaknesses.  For example, an insurance agency that’s been doing business in the same town for many years would probably consider its visibility in the community a strength. (In marketing terms, you would call this a “branding” strength.)  If the agency has tended to simply continue servicing existing customers for the past few years, without acquiring many new ones, that would be a weakness.  And so it goes.

You try to list at least your main strengths and weaknesses on your SWOT.  Professional marketing consultants usually recommend you obtain customer satisfaction surveys and conduct focus groups to obtain an objective view of how customers perceive your firm’s strengths and weaknesses.  Employee surveys are also useful for assessing strengths and weaknesses.

Strengths and weaknesses are mainly those forces that a firm can control itself.  Some of the main categories to look at when assessing your strengths and weaknesses are:

• resources, such as access to capital
• capabilities, such as your personnel and relationships with insurance companies you represent
• your brand, including you logo identity and other corporate communication pieces
• processes, such as your internal operations and how you communicate to your customers and other audiences, and
• assets, such as your book of business and your building, if you own it.

The next step is to identify opportunities and threats.  These are factors that are mainly external to the firm and not directly under your control, though the firm may be able to take advantage of them or mitigate their effects.  For instance, a few years ago when insurance agencies still kept and processed a lot of paper, there was a significant opportunity to save time and money by switching to computer systems.  Today, many agencies perceive online insurance vendors as a threat to their business.  Other kinds of environmental forces, normally outside a firm’s control, that may provide either opportunities or threats come from suppliers and distributors (insurance companies being the prime example here), competitors, regulators, the economy and the political climate.

It’s helpful to visualize the information that goes into a SWOT analysis by organizing it into a matrix, like the one I show here. 

SWOT	Beneficial (Capitalize)	Harmful (Shore up)
Internal (Your agency)	Strengths	Weaknesses
External (Your environment)	Opportunities (Invest)	Threats (Identify)

Once you’ve identified your firm’s strengths and weaknesses, opportunities and threats, the next step is to analyze the information to develop ideas on making changes that will improve performance.  Finally, you want to shape those ideas into goals with defined, achievable objectives.

In my next posts, I’ll create a hypothetical insurance agency I call ABC Insurance to illustrate how to fill in the SWOT matrix, then show you how to take the information and develop a marketing strategy.

Meanwhile, if you’d like to try your hand at filling out a SWOT matrix for your own business, you can download a template here.

To read the next post in this series, click here.

In my last post I talked about using the BCG matrix to analyze your book of business.  Another good tool for evaluating your strengths and weaknesses for your agency marketing strategy is the customer survey.  You can focus your questions on customer satisfaction, asking what customers really think of the service your agency provides.  Do they think you and your staff are knowledgeable, helpful, friendly, resourceful, courteous and responsive?  Do they think you answer your phone promptly?  Are they satisfied with the claims assistance you provide?

Another useful line of inquiry would be to ask them about your communications.  Do customers think you communicate with them frequently enough?  Do they feel they get “added value” from your agency?  Are they “not satisfied, satisfied or very satisfied” with the information your agency provides, whether in the form of newsletters, targeted product brochures or online resources?

Online surveys are easy to create, especially when with one of the free online services, such as SurveyMonkey.com, Zoomerang, Surveygizmo, Surveypro, SuperSurvey and others.

Here are a few tips insurance agencies should keep in mind when creating surveys:

• Keep it simple.  If you want to get feedback on customer satisfaction, don’t ask customers for their opinion of your new company logo in the same survey.  If you want feedback on your branding, dedicate the entire survey to that subject.
• Keep it short.  It shouldn’t take more than 5 minutes.
• Design most of your questions as closed-ended.  Yes or no, multiple choice questions will be easier to analyze.
• Don’t lead the witness.  Try to remove any bias from the way you structure the questions.  Don’t say, “What do you like best about our customer service?”  This assumes the respondent “likes” your customer service on some level and you’re just trying to rank what they like.  It would be better to offer respondents a scale of choices — not satisfied, satisfied and very satisfied — and  then ask, “What is your overall opinion of our customer service?”
• Don’t use surveys to sell —this goes with not asking leading questions. For example, it would be bad form to ask in a survey “Which retirement planning tool interests  you most:  annuities, 401ks or IRAs?”  Or “What do you like best about our agency?”  I know this “survey” approach is sometimes used in insurance sales.  And although it might deepen engagement with some people, as some marketers claim, other people will find it manipulative and disingenuous.
• Start your survey with easy, interesting questions.  They should also be the questions you’re most interested in getting answered.  Get respondents engaged early so that if you have any questions that are more personal, such as demographic questions  about age, marital status or income, the respondent will feel more comfortable about answering the question.

In my experience, not many agencies conduct customer surveys. Yet they’re relatively simple to do and insurance customers are impressed that you care enough about their perceptions to ask for their opinions.  They are essential tools when conscientiously evaluating strengths and weaknesses for creating marketing plans.  Finally, if someone says something really nice about your agency, call and ask them if you can quote them in a testimonial!