The Two Biggest Problems Most Successful Insurance Agents Face
Recently, I picked up the book 21st Century Communication For Insurance Agents by Robert Edgin on Amazon and came across a passage that reminded me of what many insurance agents killing themselves to be successful fail to realize about how they are going about their jobs.
Edgin, a former Allstate Insurance agent himself, admitted that his early days, while successful, were marred by two of the biggest problems that any successful insurance agent might face.
Wait just a minute, you may be thinking. How can success mean you’re doing something wrong? Well, let’s look at this excerpt from the book, and it should start making more sense.
“I put 10 business cards in my pocket every morning and didn’t go home until I gave them all out,” Edgin writes. “I went to car dealerships, apartment complexes, town home communities and new home sites and passed out card after card after card in order to find enough people who would let me give them a proposal and, fortunately, my price was lower often enough that I sold a decent amount of insurance.”
Edgin continued: “I never knew where my next sale was going to come from because I was too focused on the wrong thing! I woke up every morning thinking that my job was to go pound the pavement and chase sales. I was a door to door salesman. In months where I knocked on enough doors and came across enough people who were paying more for their insurance, I made a lot of sales. However, if I took a vacation, missed work or talked to too many people who were paying less, my sales suffered.”
You’re probably starting to see where the problems lie and how they can ultimately make your business topple under the weight of its own success: poor marketing and poor customer service.
Poor Insurance Marketing
There is a difference between marketing and advertising. With advertising, you’re randomly putting a message out there for all the world to see in hopes that a high enough percentage of eyeballs will respond to it. With marketing, you’re strategically selecting the people who see your message in hopes that more will respond. In the 21st Century, marketing is more effective than advertising because the noise that we are all being bombarded with online, on TV, in magazines and newspapers, make it too easy to get drowned out. You’re essentially competing with everyone and getting a smaller and smaller piece of the attention-pie.
In Edgin’s book, he makes no bones about the ineffectiveness of his marketing. Take this passage as another example: “In order to make sure I hit my numbers each month, I worked myself to death. Monday through Thursday, I stayed at the office until 7: 30 p.m. making cold calls to homeowners asking them if I could mail them a proposal for their home insurance. Every Saturday morning, I was in my office making more calls or out visiting car dealerships and passing out more business cards.
“The bottom line is that I was successful because I had no life. I worked longer than anyone else and harder than anyone else. That was my secret. I was a very opportunistic agent, completely focused on the next sale. I thought that if I could just work a little harder and stay focused on the next sale that eventually things would get easier, but they never did.”
Edgin’s point: For an insurance agent to truly have stability, he needs systems in place that bring the business to him. Systems that allow him to step away without worrying that the entire business will fail. It’s clear from the author’s perspective that his earnings were pretty much like a faucet. As long as he had the faucet on, the money would flow. But as soon as he stepped away from the proverbial sink and closed it off, it all came to a screeching halt. He had not designed a business capable of surviving. He had merely delayed its inevitable failure.
And the need to “always be on” eventually led Edgin’s agency to its second major obstacle.
Poor Customer Service
By constantly chasing after the one thing that mattered most to him — the next sale — Edgin admits that “staying focused on the next sale and talking to so many new people actually made things harder and contributed to” the customer service problem.
He continued: “As my agency grew, more and more people started needing help with their policies. A change here, an addition there, people were calling my office all the time. The problem is that I was hardly ever there. If I was in the office, I was making calls or running quotes and I didn’t want to take the time away from chasing sales to do something that didn’t contribute to my next sale. I put things off as long as possible and neglected my customer service responsibilities. I was too dumb to know the damage it was causing in my agency and since I was still putting a lot of new clients on the books, management either didn’t notice my shrinking retention rate or chose to look the other way.”
We’ve discussed this issue on the blog before, and it will remain true for the foreseeable future. You cannot always win on price. And if you can’t offer great value to your insurance leads & customers — which customer service is a big part of — then they are going to be looking for a new provider within three years. That means you will never be able to break the cycle that Edgin knew was dooming his efforts. You’ll either keep things running by always having to be there, or you’ll burn out, step away, and fail.
Building value is essential. Retention is essential. Without it, you’re not building a business; you’re just acting out of desperation.
The Edgin book is well worth your time if you’re looking for new tips for how to navigate a new century of communication with clients. In the meantime, try to analyze your business. Is it self-sustaining, or does everything grind to a halt when you’re not there? Don’t be blinded by your own success as to the underlying problems your business may be experiencing. They can eventually be your undoing.