Right? Wrong, says Jack McMahan.

“Most agencies have no clue that their customers want to be touched that often,” says this 30-year veteran property-casualty agent. Agents who continue to ignore this message, he says, “are at grave risk of losing the business, not because of price or product or competition, but because of poor relationship management.”

In fact, he says, the number one reason why customers who have been buying insurance from a particular agency for five years or more leave is because they're being ignored, which is just another way of saying they're not being touched often enough. And this is a group that has a 54 percent probability of consolidating its insurance purchasing into a single source, he adds.

Relationship management and all it entails is what most occupies Jack McMahan these days as president and chief executive officer of Baetis Inc., a Boulder, Colo.-based marketing and distribution company that specializes in integrated information systems and marketing services for agents.

“The concept 'once and done' is probably going to be the death knell of the industry rather than a benefit,” says Mr. McMahan, because it comes from what the industry wants, not what the customer wants.

Exactly what do customers want from their agent? According to Baetis research, a whole lot more than p-c insurance. Small- to mid-sized businessowners, for example, rank the purchase of p-c insurance way down on their “worry list”–typically 16th or lower. What they're most concerned about is the competition, retention of key people, affordable healthcare, compliance management and business perpetuation, according to Mr. McMahan.

Cultivate a “single source,” long-term relationship with the customer, he says, and find ways to address their deeper concerns through new products and services and you'll transform that $123 account into something of much greater value. “Take the same people and leverage new products and get greater share of customer, not greater share of market,” he says.

Agents could do worse than tear a page from Mr. McMahan's own experience and break out of the “single silo p-c mold” and embrace the notion that a customer is multi-dimensional. “We had to let the customer drive us in terms of being able to provide solutions rather than coming from our silo and telling the customer what we would do,” he says.

“Most property-casualty agencies today have silos of business,” he notes. “Property-casualty is a silo. Life is a silo. So are employee benefits and medical. And those silos have created structural and cultural barriers to integrated product solutions for customers.”

Forward-thinking, fast moving, successful agencies, he says, will look for ways to find, enrich, integrate and use multiple data sources–medical, life, health, financial, demographic and human resources, for example–from inside and outside their organizations, through partnerships with banks, professional employer organizations and the like.

Good data, of course, is the key, and there are customer relationship management software systems, like Mr. McMahan's, that can accomplish this.

If you want to cross-market in the bakery industry, for example, it's helpful to know that a bakery with more than 30 employees has a 92 percent probability of buying group health insurance and a 74 percent probability of buying a 401(k) plan, while a bakery with fewer than 20 employees has less than a 42 percent chance of buying either.

And if you want to cross-market to Main Street businesses, it would be equally helpful to understand (as few agents do) that the average age of those businesses is 47 years and that 38 percent of their owners with under 100 employees are over 60 years of age.

It's all about knowing the customer totally. And that brings us to another of Jack McMahan's many passions (no, I didn't forget)–fly fishing, an avocation which has become the central metaphor of his business.

First of all, his firm's name–Baetis–is the Latin word for “mayfly”, the delicate, soft-bodied insect that symbolizes the sport. Baetis promotional materials bear the imperative, “Tell us what you're fishing for” and one of its promotional giveaways is a mayfly fishing lure.

What's that all about, Jack? “Fly fishermen succeed only if they can match what the fish is looking for–which means you've got to understand the fish,” he answers, rising to the bait. “You have to understand which fish you're after and what's the time of day and what's the temperature of the water, what's the location and what's the fish feeding on at that time–and then match the size and color of the lure with what the fish is looking for.”

In the Baetis scenario, the customer is the fisherman. “The customer is trying to catch something,” he says. “Our job is to help them. Our job is to be the guide. The same applies to insurance agents. The customer is the fisherman and the best role of an agency is to be a guide, to be a navigator, and help the customer attain results.”

With that, Jack McMahan began his long trek home from Hoboken to the Rockies, where he always keeps a fly rod by the door–sometimes metaphorical, sometimes real.

Thomas J. Slattery, NU's Executive Editor At Large, is always fishing for column ideas. He can be reached at [email protected].

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, September 3, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.

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