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What are your competitors thinking?

Friday, June 20, 2014
Written By
Dave O'Brien

Working at Zywave gives us the distinct pleasure of working with every type of insurance broker in the market. We have thousands of brokers as clients and it allows us to see what is working and propelling some to new levels. As hundreds of conversations between Zywave and brokers take place daily, we are seeing some recurring themes. We decided to verify our findings by surveying both Zywave and non-Zywave brokers and what we found is interesting. There were so many valuable insights that I will be touching on various topics from the survey over the next few months. These findings are from over 900 brokers of all sizes located across the United States.

Growth strategies

First, while a lot of the survey had to do with organic growth, 20% of the respondents made an acquisition in the last year and over 10% are looking to make one soon. Conversely, less that 2% of the respondents said they are looking to sell while 12% were unsure. It clearly is a time of uncertainty for some, while others are hungrily opportunistic.

We also asked about the top strategies respondents use to acquire new business. Overwhelmingly (85%), brokers said the main strategy of their agency to get new business was referrals, followed by cold calling and centers of influence. Typically when a broker is asked how they get business, the standard answer is referrals, so the survey is consistent with that.

Here is where it gets interesting, though. When asked if they had a formalized referral program, over 70% responded no. As crazy as that sounds, that means that for most brokers, their top strategy of getting business has zero process around it. If someone offered to wash your car but did not have a hose, sponge or bucket, how good of a job do you think they would do?

Developing a referral program

One of the greatest assets of an agency is its reputation. The second greatest asset is the relationships it has built over the years. Agencies that want to take it to the next level need to create a process to maximize these strengths. The first part of this is figuring out who you know. Get the agency together and spend the time figuring that out. Zywave has an agency management system for benefits and oftentimes during implementation compiling this data is one of the toughest things for brokers to do – but is an extremely valuable exercise for your agency.

The second part you need to ask yourself is why should they refer you? If your answer is your stellar service, remember, that is every other broker’s answer as well. You need a differentiating story. Interestingly in our survey, almost half of the brokers surveyed did not know if they effectively differentiated from their competition, yet over 95% felt it was important and or critical to their growth success. So once you have gathered your relationships, you need to stop and determine what makes you great. I have written about these topics in the past and this is more important now than ever.

Your agency can start formalizing a referral process today by focusing on the following:

  1. Collect all of the information on their relationships.
  2. Use tools like LinkedIn to connect to them and see who their relationships are.
  3. Read my article in the March edition of HIU magazine on scalable intimacy. Make sure you are providing high value every month to these contacts.
  4. Focus on your story. Get together as an agency and have spirited discussions on this. Look at your website, look at your competitors. Ask your clients what they like specifically about working with you. Once you have it down, practice it.
  5. Set a goal. How many referrals do you want a month? Track this and tweak your strategy if you’re not hitting the number – and celebrate when you do. This should be an agency-wide initiative.
  6. Make it part of your culture. Change your email signature so at the bottom, it asks for referrals.
  7. Practice asking for a referral. Sounds crazy but we are not used to doing it and afraid of rejection. Practice the response for getting one, and gracefully accepting rejection.

The good news is that given the survey numbers, the agency that does these steps will be light years ahead of their competition and on the track for higher growth. Plus, I expect, having a lot more fun and worrying less about growth.

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