The keychain tags came into use when stores realized that customers lost or forgot to keep the cards on hand. By having the information on a keychain, odds improved that they would have the cards wherever the customers went. My first card was from Walgreens, then Borders–and I can't remember what else because it exploded with tags from three different pharmacies, two bookstores, two pet food establishments, four grocery stores, and so on. I now have 21 keychain tags, which even for me is a bit much. But now, thankfully, I don't even need to carry them anymore. All the store needs is my phone number and up comes my information and applicable discounts.

Commerce by the letters

This is a clear example of taking a pure transactional exchange and making it something more. All of a sudden, I'm receiving mailings, coupons, informational flyers and a little extra customer service when at the store. My relationships with these retailers are more than seller and buyer; they moved to inquirer/decision maker and resource.

E-commerce came about as a means to an end. It was about the efficiency of the transaction and purchasing what I wanted easily.

As technology advanced and cell phones and personal digital assistants (PDA) combined to create the smartphone, commerce too advanced–from electronic to mobile commerce (m-commerce), which was defined by buyers determining where and when they would want to engage in a financial transaction. And “online shopping” transitioned to “on-the-go shopping.” It started with smartphones with browsers, then became better through the development of mobile apps that improved the experience and made the shopping transaction even easier.

In the last few years, social media began to erupt on the scene and mobile apps like Foursquare (see my September 2010 column, “A new game in town”), Yelp, AroundMe and too many others to name. These have come to define the conduits through which social engagements occurred. Most often they involve restaurants, shopping malls, stadiums and other places where commerce happens.

Retail as social commerce

At the same time, some online stores attempted to bring similar experiences to those shoppers that stayed at their computers. For example, Mattel Toys created a “Shop Together” experience where friends can browse, shop and share in real time together in a similar manner that the gaming industry has made multiplayer online competition possible.

In another example of enriched shopping experiences, in partnership with Facebook, Amazon.com has taken its famous customer intelligence algorithms whereby it's able to make suggestions of other books that people have purchased that have similar buying interests to you, and made it even more personal. Now it makes recommendations based on what your Facebook friends have bought. Not only is this a much more intimate experience, but you now have an identified book club of your friends.

You might remember that a few years back, a jeans company came out with custom-made jeans, individualizing the fit. Now it's not that unique, perhaps no more so than having custom-made dress shirts or suits. But an online clothing store has taken it one step further. ModCloth has created a “Be the Buyer Program” that engages customers to help select the styles that will lead to what dresses are manufactured and available for purchase.

All of these creatively new opportunities are what has come to define “social commerce” (s-commerce). It's taken that once mundane, purely transactional event and unshackled it from the store. It has moved shopping from a linear back-and-forth, buy-and-sell process to a community experience, where much more than an exchange of goods or services is made.

It's about businesses earning the privilege to offer the consumer the opportunity to buy. It is no longer enough to just have what people want; you must have it when, where and in a manner through which they want to engage with you.

Insurance applications

Companies can compete more effectively with s-commerce in today's environment, especially on products that are considered commodities. Independent agents understand this challenge perhaps better than most. In the current soft market for commercial lines, personal lines business offers an enticing revenue alternative. When you consider that independent agents are only capturing 34 percent of the personal lines premiums, with the remainder going to direct writers and captive agents, you can see the significant potential.

Of the estimated $460 billion in property-casualty premiums written in the U.S., 50 percent is from personal lines and only a one-third market share is coming through independent agents and the carriers they represent. That leaves approximately $150 billion in premiums on someone else's table.

Yet when I talk with agents about the potential revenue from homeowners, personal auto and umbrella, among the objections I hear is, “It's a commodity business, I can't compete on price.” What that tells me is they are thinking with a '70s and '80s mindset.

An April 2010 survey on marketing tools used by agencies showed that electronic marketing methods are replacing more traditional ones. The survey of American Insurance Marketing & Sales Society members found that roughly 60 percent of respondents are using social networking sites for business purposes and reducing their dependence on more traditional media, including Yellow Pages and mailing-list brokers. Three quarters of the 60 percent have started using LinkedIn; nearly half are using Facebook.

With the speed of change happening in the realm of social media, it would not surprise me to find these numbers increasing. Social commerce is not just for product sales; it's for relationship sales, and who knows more about building relationships than independent agents.

S-commerce for agents

Have you ever thought about creating an iPhone app for your agency? Check out the Toy Lounge for very reasonable custom-made iPhone apps for insurance agents. A basic app is only $1,250. The cost of entrance is cheap. You can include RSS feeds from your blog, information about your agency and services, connection to your website, Google map for directions, etc.

I'm sure you support local clubs and sports teams; perhaps you devote staff time to Habitat for Humanity. What about using Twitter and Facebook to talk about the efforts of the group? Run contests for staffers who accomplish something for the community and publicizing the winner. It's socially based activities, discussed over social media and doesn't talk about insurance, but sure does position your agency as a champion in your town.

Remember, this isn't your father's insurance agency nor are you going to grow your business by going after your father's customers. But you never know; the largest growing segment of Facebook users are 65 years old and over.

I understand that part of the challenge of going after personal lines business is that more often than not, they're single policy business; your goal is to get prospects to walk in the door easily. For that, I'll leave you with these two thoughts.

First, if you don't “ask” for the business, you'll never get it. This can be the biggest barrier to building your PL business and one that involves making sure your staff is trained to understand how to “sell” and not just “serve.” The more comfortable the relationship between your staff and your customers, the easier it will be to have those conversations. I really believe that the better you use social networking, the better your prospects and existing customers will know you.

Second, by its very nature, social media is about promulgating good and bad feelings, no matter what they resulted from. Word of mouth is the greatest force behind the success or failure of any business. In the world of social media, that word of mouth is louder and faster than it's ever been. Be sure you are part of that conversation while it's taking place.

For more information on how to build your share of the personal lines market, visit www.personallinesgrowth.org.