I'm not knocking technology, and all of the people I spoke with made it a point to say they use an efficient management and delivery system, but not at the expense of customer relationships. We all have to determine how best to balance technology and personal relationships, and you should not assume that everyone in your organization has that balance in mind. They don't, or if they do then everyone isn't using the same set of scales.

Also, certain local issues may cause you to avoid seeking new business in your own backyard. If you're avoiding it, then perhaps everyone else is too. That could mean an opportunity. It may not be an easy opportunity, but if it were easy, then everyone would be doing it.

Try to look at your local market in a way that's unique. If you have difficulty doing that, then start talking with people you respect outside of your own operation. I just set up an advisory group for a client/friend, and it was fairly easy, low-cost and fun. It can work for you as well.

Find Ways to Work Smarter

When speaking with Dave Jones, agency manager at BB&T – Iler, Wall & Shonter in St. Petersburg, I asked how the economy has affected staffing in his agency. “Oddly enough,” said Jones, “we're spending more time marketing our renewal business, so we've actually added to our team.”

While many in the industry are cutting costs, including staff, it's good to know that some are taking the opposite view. Keeping costs in check is wise, but now may be a chance to take advantage of your competitor's inability to service his business because they're trying to do so with a skeleton staff. Also, from time to time good people are let go by agencies because of falling revenue or mergers, not because they could not do their jobs. They may be candidates you should consider hiring.

Cooper also mentioned they are providing some compensation to employees to help offset the rising cost of commuting to work. That's another fairly simple solution to an issue that's impacting just about everyone, but it's a great idea. Your employees will appreciate the help and will be less likely to seriously seek another employer a little closer to home.

Wes Scovanner, CFO of Longwood-based Insurance Office of America is “not seeing a major change in customer contacts as a result of gas prices.” He then added, “We're always looking at how we do business, but changes for us are more a result of ongoing review as opposed to the annual budgeting process.” As CFO, he is keenly aware of increased costs across the board.

In addition to costs you would think of immediately, Jones also mentioned making sure that their staff is paying close attention to the types of products they are quoting and selling, especially with certain policies. “We are being much more careful with customers, especially new ones, where we may have to agree to 25 percent minimum earned premium on surplus lines and specialty policies. Some folks say to bind coverage and then can't come up with the money.”

When in the process of reviewing cost and expense, “eating” premiums via write-downs or write-offs isn't as obvious and isn't always figured into the mix. However, it's another good idea to make sure everyone on staff is watching out for policies with significant minimum earned premiums or ones that show premiums as “fully earned.” There aren't too many of the latter still around, but all it takes is one to create problems for you.

Jones also shared the issues that some customers face. “We have clients trying to renegotiate lease arrangements to reduce costs; some contractors trying to carpool to jobsites; and, on the benefits side, we're seeing some customers downsizing their workforce.” While these steps may be necessary for your customers, you should see this as an opportunity to review their coverage and exposure base to make sure the policy and premium are still appropriate. If the rating base goes down, then you may give up commission in the short term, but you will build loyalty and perhaps help keep that business around until things improve.

Work the Business Plan

Scovanner also mentioned the impact of increased expenses on agency planning, and is looking at a number of factors. “There are a lot of issues that may develop as a result of this year's presidential election, storm season, the possible rise in interest rates, and so forth. Forecasting for 2009 will again be a great challenge for us and others in the industry.”

That points out the importance of timely planning, i.e., not waiting until November of 2008 to start planning for 2009. The goal is to be accountable to the plans already in place and to evaluate results as you continue to modify your plans on a regular basis. I've made the mistake of not working on my business plan frequently throughout the year, and would urge you to set aside time at least once a quarter to review and modify your plans.

As to the impact on advertising and marketing, none of the three agents I spoke with indicated that they had made any drastic changes, which is good to hear. Unfortunately, many business owners will cut their marketing budgets when times are tough, which is frequently just the opposite of what needs to happen.

Cooper also offered up another option for gaining business: “We're getting plenty of referrals because so many companies are withdrawing from our area. We're partnering with some agents and referring business back and forth, trying to help each other as much as possible. That's been very successful, so much so that we really haven't had to increase our advertising in spite of market conditions.”

Cooper's comment is a great example of being in a tough market and the necessity of reconsidering what we're doing and how we're doing it. It would be nice if once the calendar flips to next year, many of the difficulties we've faced in 2008 will simply go away. Until that happens (if that happens) we must be determined to win in the market we have in front of us. Sometimes key business principles get lost if too much significance is placed on the circumstances as opposed to the objectives. In our quest for the next “new” thing, we are sometimes a little numb to the simple and obvious.

KISAO, and good luck.