Business as usual is often in our rear view mirrors.
The success of that frenetic (but comfortable) business model was primarily based on the effort level of you and your agents. Things like hard work, persistence, and a never-give-up mentality were the attributes of successful agents.
The harder they charged the better things worked.
Being a hard worker doesn’t always make customers happy
Today, the business model in front of us is similar only in the final result: a customer ends up with insurance.
Technology has literally handed customers the reins of the business we previously thought was ours. Companies like Quote-Bot, Ethos, and Sproutt are turning the life insurance business as usual on its head by offering instant decision life insurance without the need of a licensed agent.
Think of what’s happened to our business like this:
- The Wright brothers were just handed a stealth bomber, or
- For our younger readers, Tiktok opened up the ability for users to monetize their social following and leave their fulltime jobs.
Like it or not, the insurance business is changing.
You’ve got some interesting decisions ahead if you are an insurance agency owner or principal.
The insurance strategy dilemma: Bi-plane or stealth bomber? Myspace or Tiktok? 🙂
Depending on your tenure, this might be the first real strategy issue you or your insurance business has ever faced.
Do you fly the bi-plane until it runs out of fuel or do you embrace the scary, but silky smooth stealth bomber and its amazing and expanding capabilities?
Evolve or Die Trying
Like they have in every other industry that has already gone through a transformation (yes, insurance is lagging the leaders as usual), customers are flocking to the new ways of buying insurance online.
And what they have found is a purchase process (i.e. customer experience) that isn’t that complicated and takes about one-tenth the time (or faster) than buying insurance the old fashion way.
Let’s break down your strategic options.
Be prepared to commit more time (blood, sweat, and tears) and money (capital reinvestment) than you think.
Below is a quote that came from a 2022 report on the future of the insurance industry by the Boston Consulting Group:
“Insurance agents of the future will have superpowers, a complement of people skills and technology. They will know their customers better than ever, service and support them at key moments and provide them with a rich digital experience. Their conversations with them will be influenced by the AI-generated insights of choices made by other customers in similar life and work situations. In short, insurance agents will be more effective.”
Transformational strategies like what will be required for most small to medium insurance agencies to become a stealth bomber fail far more times than they succeed. The number one reason they fail is management doesn’t commit the necessary resources or time to develop scalable processes that align with clearly defined growth strategy.
Management says the right things but ultimately doesn’t move with enough commitment or speed.
What will be required is an unwavering commitment to rethink how your agency conducts its business at every touchpoint with a customer.
Your Customer is Your New Business Partner
Let’s do a fly-by of what some of the new agency and customer experience might look like.
Your customers are in charge. Get used to it.
They will demand access to everything at any time of the day. You already know a lot about your customers–you have good data–but you must develop capabilities so the data works for both you and the customer… on their schedule.
- Digital sales experience. Customers might still want to meet with you, but build your processes around an experience that is entirely digital. They will expect 24/7/365 availability on your part.
- Personalized communications. Customers will want every form of communication at their fingertips, e.g. chat, email, text, etc. Your agents won’t always be available, but customers won’t care. They want answers. Your support teams will have to step up their skills to meet increased expectations from customers.
- Agents become facilitators. Customer demands of the agency’s resources will require agents to be more than just salespeople. They must be better team players because more members of their team will be involved in their sales. This could/should impact the economics of sales where team members get their fair share of the commission pie.
- Leads come from multiple sources. Gone are the days of direct mail or telemarketing as viable channels for leads. If you have done it right, you along with your carriers will be swimming in data that you can actually access easily. That’s where your leads will be.
Business as usual is not completely dead. Big deals will require people talking/meeting with people.
The right insurance strategy consultant can turbo-charge this change.
There are several reasons why you might want to look outside your organization for advice and help:
Experience and expertise. This will come in many forms. Someone with insurance experience would be nice. Someone with change management experience would also be nice. And so on and so forth. You will have to weigh the cost-benefits of the right person for your organization.
Pairing real life experience with understanding what’s ahead versus what’s behind is the most important attribute you want from a consultant.
– Drew Gurley, Founder
Costs and benefits. Most small and medium size insurance agencies won’t have to hire a person. That’s the good news.
However, you are going to need a variety of skills to implement what will be a wide range of organizational changes, from strategic to tactical. A strategy consultant will cost more but you likely won’t need them full-time throughout the process.
Tactical consultants for IT and other areas will cost less but likely be in place longer.
Thinking outside your box. The right consultant(s) will come in knowing much more about other businesses and very little about your specifics. That’s a good thing. Give them the rope they need to fully understand your operation from a third party, unbiased perspective and then be open to what might be ideas that make you a little uncomfortable. That’s a good thing as well.
Hiring a Business Consultant: What are the Benefits?
Consultants work closely with business owners and managers to help identify challenges, offer advice, and propose practical solutions. You might think of consultants as doctors who diagnose the problem and prescribe a remedy that alleviates pain.
The benefits of hiring a strategy consultant include the following:
It’s OK to ask for help.
No insurance agency owner–small or otherwise–wants to hire a business strategy consultant.
Most owners believe that is their job.
Some of you will be scared of what we’ve talked about here. Others will be energized.
In either case you may need help to make the transition from business as usual to this new way of flying. Don’t be afraid to ask.
Those that hesitate in this new high altitude battle will lose.
