Independent agents, it's time to step out of your comfort zone
Despite an undeniable desire among customers for more digital processes, most still want to speak to an agent when they have questions.
Roughly a full year into the COVID-19 pandemic, it would be difficult to enumerate all the hard lessons we have learned as a global community.
But perhaps chief among them, from a business perspective, is the importance of equipping your enterprise with the digital capabilities consumers have come to expect at an accelerated pace as companies in nearly all sectors scramble to serve their customers without ever coming face-to-face.
With so much focus on providing the instant gratification and latest tech that consumers demand, it’s important not to lose sight of the tools in our toolbox that might not look as shiny but remain as effective as they ever were.
Changing times
Bindable recently surveyed more than 100 independent insurance agents and uncovered some fascinating generational differences in the way they do business. Over half (53%) of the agents we heard from reported that they had adult children also working in the industry. Presumably, as this newly minted batch of agents finds their footing, they will remake the industry in their generation’s image (as well they should). But our data suggests that they should be mindful of not “fixing what isn’t broken,” to borrow the old adage — especially when it comes to generating new business leads.
Social media is so ubiquitous in this day and age that it’s difficult to resist its allure. For a fraction of the cost of some traditional advertising methods, networks like Facebook promise to plug your brand message into the news feeds of an audience you can cut by essentially any demographic. And since nearly everyone uses it, it seems plausible that advertising through social media is always going to get you the traction you want.
In some cases, that is true: Roughly one in three agents report that organic social media is a primary source of new business for them.
But what about the aforementioned paid social media campaigns/? They tend to be lower-cost options. They’re easy to set up and maintain. And they boast a regular audience. Is this, however, where agents should be focusing all of their energy? Our data suggests the answer might not be what you’d expect.
Prospecting in ‘the new normal’
To examine the differences in the ways independent agents pursue new business, we cut our group into two subsets: those who fall under the “millennial” category (38 years of age or younger), and those who do not (39+). We found that there are some significant differences in the way these two groups focus their advertising.
Agents from the millennial group were 61% more likely than non-millennials to name paid social media as their primary source of new business leads, which isn’t exactly surprising. What is more surprising is that our study showed they might be neglecting more traditional channels that are as effective, or more so, than paid social media.
For example, our millennial group was 15% less likely than older agents to name referrals as their primary source of new business leads, despite agents in both groups designating referrals as one of the most effective methods to generate leads.
And that’s not the only “analog” method that younger agents should still be using.
One of the data points that stood out was that our millennial agents were 82% less likely to name affinity groups as a primary source of new business leads, even though a towering 93% of all agents surveyed agreed that customers will purchase policies through these groups.
Seventy-six percent of agents who currently pursue new business through affinity groups agreed that they are an effective lead generator, and 73% agreed that affinity groups represent an opportunity to grow their businesses. So how can independent agents make affinity groups work for them?
Building a better business
So what are affinity groups, and how can you leverage them to expand your business? An affinity group, defined at its most basic level, is a group of people with some sort of common identity. They might be employees of a particular company, customers of the same bank, or members of a sorority. Whatever the organization, affinity groups provide insurers with a set of potential customers who are deemed less risky to insure — and who are therefore generally offered discounted rates. Some typical affinity partners might include:
- College alumni associations;
- Professional organizations;
- Fraternities and sororities;
- Employers;
- Banks and credit unions; and
- Membership clubs.
While these might be the first sorts of groups that come to mind when you think of affinity, agents hoping to expand through this route would do well to broaden their definition of the term to include adjacencies such as auto dealerships, mortgage lenders, identity/interest groups, and any other groups that have a membership you’d like to engage.
Millennial agents looking to modernize affinity-group sales might consider forming partnerships with the brands that younger customers are likely to use and trust, such as fintech apps and subscription-based models. The API economy gives this strategy a much broader reach, so make it work for you. Think about utilizing digital tools to engage local employers and credit unions, or using a recreational app (for example, Meetup) to find groups you’d like to work with.
Passing the torch
While it’s clear that the digital revolution is only speeding up, it’s still important to maintain a multi-pronged approach to doing business. Likewise, agents who have been in the industry for many years shouldn’t assume that all their knowledge is useless in the increasingly tech-savvy landscape.
Despite an undeniable desire among customers for more digital processes, 91% of our panel said that customers still want the option to speak to an agent when they have questions. Agents also can give customers more options to choose from, which only serves to boost their business. A hybrid approach is an agent’s best bet when it comes to structuring their agency.
It’s also worth noting that 66% of the agents we surveyed predict that they will retire within the next ten years. Of those, 70% report that they have a partner, family member, or employee who will take over their business.
If you’re an agent who intends to pass on your business to a younger protégé, make sure that you have set them up for success by ensuring that they’re able to make use of every effective method for securing leads — not just the ones that look shiny and new.
When you step outside of your comfort zone and gain familiarity with methods that don’t come as naturally to you, everyone will benefit — you, your business, and most importantly, the customers who are out there looking for the top-tier service you can provide.
Bill Suneson is CEO of Bindable. To reach this contributor, send an email to bindable@meetkickstand.com.
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