What is driving your agency?

Rough Notes, Jul 2002 by Weinberg, Michael J

PRODUCER-RELATED ISSUES

Being service-driven boosts sales

Good companies make sales ... while great companies serve needs and ... make even greater sales as a customer-driven organization.

Since beginning my sales career at the age of 10 by selling greeting cards door to door, I have been a "sales elitist." As such, I have been a fervent believer that sales drive everything. Further, without sales, nothing happens. After all, it makes sense. The sales process brings in dollars, and it is dollars that pay the bills-not service.

Nonetheless, even as a sales elitist, I always realized the terminal effect that poor service could have on sales and on the business enterprise as a whole. Admittedly, I often made that recognition in a negative manner (e.g., a bad service department can destroy in minutes all of the goodwill that took years to build).

My beliefs as a sales professional are so deep that we even incorporated the notion in our agency's mission statement that began, "We are a sales-driven organization." I have always been proud of that concept and wanted everyone, both from within and outside our organization, to know where our values began.

Today I view that mission statement with a mixture of embarrassment and amusement at my naive viewpoint. I now realize that our mission as an independent agency is far greater than merely being a sales-driven organization.

Our real mission-- reflected in our recently rewritten mission statement-is to protect the assets of our clients, their companies, and their families. Recalling the genesis of the insurance industry, it began as a social device for spreading risk and protecting assets, not as a method to earn huge sales commissions. And, we have further edited our mission statement to say that we are a "service-driven" organization, providing service at a level no less than we would expect for ourselves.

Do these statements about our mission and in our mission statement reflect a de-emphasis of the sales process in our organization? Not at all. In fact, we are enjoying our greatest sales year and we are paying more money to service personnel for "sales" performance than ever before. So what is this change all about?

First and foremost (it is best articulated in books like Built to Last and Good to Great by Jim Collins), good companies make sales (sometimes lot of sales) while great companies serve needs and, in doing so, make even greater sales as a customer-driven organization. Regardless of attempts to the contrary by many direct writers (and a host of others), insurance cannot be viewed as strictly a commodity product. The wrong policy, no matter how inexpensive, is worthless if it doesn't provide coverage at the time of a loss.

I learned a long time ago that consumers don't want the cheapest product-they want the best value. This notion is reinforced every day when consumers trade stocks with Merrill Lynch rather than with a discount broker, when auto buyers choose a Lexus over a stripped-down economy model, and when they buy insurance from a professional insurance agent rather than through an impersonal phone call from someone who promises a 15% discount for a 15-minute phone call.

Insurance customers of all sizes are becoming more and more knowledgeable about our industry. In South Florida, we often joke that the way to learn about the latest and most technical information on long term care coverage is to go to any condo pool. Likewise, we find that knowledge in certain areas (such as workers compensation and risk management) often is greater at the consumer level among sophisticated risk managers than at the independent agency level.

With this high level of consumer knowledge, we are seeing a systemic switch in the insurance business from a sales- and product-driven industry to a service- and knowledge-driven business. Large clients know that the manner in which an insurance company handles its claims will likely have a much greater effect on its ultimate rate structure than will a detailed "bidding process" at renewal. Customers are now demanding control over the way their business is handled. The old model of insurance agents and companies setting service standards is quickly disappearing.

In our agency, for example, we query clients of all sizes as to their service preferences. One of the most basic questions we ask is, "How and when would you like us to contact you for service-related issues?" Imagine if your credit card company offered that extra lost card protection by e-mail rather than by interrupting your dinner with a telemarketing call? Some clients like phone calls, others like faxes, and yet others want e-mail. It is so easy to ask and so important to meet these simple desires.

So where is this new direction towards a service-oriented organization taking us and how does it relate to the sales process? We are trying to carry through the spirit of service-driven sales to our entire sales team in a positive, productive and motivational manner. My partner and I are true believers in both insurance and in "doing what's right" for the client. That is our first and greatest mission.