Last week I attended a conference with Scott Addis and his Organic Growth Engine members. Scott's approach to insurance is revolutionary - the agent isn't just competing on coverages and price, but offering a professional service as a risk manager. It changes the relationship between the agent and client from one based on price to one based on respect and partnership.
In the past 10 years ,we've seen a significant shift in how insurance is marketed and bought. The Internet has allowed clients to shop their insurance and has increased the focus on price. Independent agents can't compete against the large national companies that flood the media with "lowest price" messages - even though we know that independent agents can often beat the best price of the nationals. Perception is reality.
So, what's the future for independent agents? I think the agents at the Organic Growth Exchange have the right answer - change the equation from one based on price, to one based on diagnostics, analytics and consultation. Insurance agents should start to build a reputation that rivals an attorney, accountant or financial advisor, not a used car salesman. And how do they do that? Focus on risk mitigation and management. Do more to help the customer reduce risk and operate in a safer environment. By doing so not only do you build a strong relationship with your customers, making them customers for the long-term, but you also reduce their overall cost of insurance. It's a win-win for everyone.
Independent agents should start taking a critical look at how they do business and consider making a cultural shift from commodity sales to consultative sales. It's not an easy transition, but one that is critical for survival.
Monday, September 21, 2009
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