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Hard Market Marketing

Too many agents are devoting 100% of their time to existing clients without prospecting for new ones. The increased earnings generated by these existing clients are creating a level of complacency. Their conscious (or subconscious) mantra is, “I’m making more than I expected or need, so why should I work harder.” As a result, prospect pipelines are not as fat as they have been or could be.

“I’m just sitting here letting the companies make me richer!”

“Thank God the hard market is here, I’ve waited so long for this!”

“I can’t say this to my customers’ faces, but I sure am making a lot of money in this market!”

I’ve been hearing those types of comments much more frequently than lamentations about the difficulties in placing business due to the shrinking markets. And I don’t begrudge any agent the additional commissions being earned on increased premiums.

However, what goes around always comes around. In other words, this market will eventually turn soft and therein lies the rub. Too many agents are being lulled into a false sense of security with the continually increasing revenues. Too many agents are devoting 100% of their time to existing clients without prospecting for new ones. The increased earnings generated by these existing clients are creating a level of complacency. Their conscious (or subconscious) mantra is, “I’m making more than I expected or need, so why should I work harder.” As a result, prospect pipelines are not as fat as they have been or could be.

As an agency manager when is the last time you’ve really reviewed the “state of your prospects” with each of your producers? Are you as fervent in prospect development through direct mail, telemarketing, e-mail and advertising as you were 18 months ago when you “needed” new business? Are you basing agency growth on revenue growth, without monitoring the growth of new clients? Do you feel the “urgency” to generate new business that you’ve felt in the past?

Ironically, I might ask these same questions of the companies out there too! With shrinking markets and increasing premiums, many companies have become pretty complacent about their distribution force as well. They aren’t advertising nor engaging in as much cooperative advertising as in the past. They don’t seem to be nurturing their agents as much and many are actually cutting back on the valued-added services they provided on behalf of the agency force.

So what does all this say about the state of relationships within our industry. A true friend not only enjoys the successes of a friend, but is there to nurture and support a friend during times of struggle. Many of your clients are struggling in today’s economy. Are you proving yourself to be a true friend, or a profit taker? Are your actions and attitudes solidly positioning you as a friend or partner to your clients? Mark Twain once said, “When you need a friend, it is too late to make one.” And mark my words, the time will come again when every agency will “need” new friends, as will every company.

In marketing the most common mistake I see companies from all industries make is the failure to maintain continuity in their lead development program. When things are bad, they market like a Tasmanian devil for new business. Then as the new business starts to hit, they get complacent and fail to continue to do the things that initiated that new business. As a result the pipeline gets thin and business again gets bad. Then suddenly they wake up and begin feverishly marketing anew. It’s a vicious cycle. And, in honest reflection, we are all guilty of it.

Maybe it’s time to make a mid-year resolution to review the state of your marketing attitude! If you like the money you’re making in this hard market, consider how much more you could be making if you were marketing as if it were a soft market.

Look to the basics that made you what you are today. What things have you stopped doing that are responsible for your current success? What more could you be doing in areas of prospecting and client development? How much money are you really leaving on the table every day for someone else to take home? If you look at your increased revenues, have you made proportional increases in your marketing and advertising budgets? If not, why not?

It’s nice to enjoy the good times, but it is even better to use these good times to insure your future – rather than simply relish the immediate gratification of the present. Look to the basics. They have held you in good stead in the past and will continue to help you prosper into the future. Unless you forget them!

Jack Burke is the president of Sound Marketing, Inc., host/producer of Audio Insurance Outlook, editor of ProgramBusiness.com newsletter, and author of both Relationship Aspect Marketing and Creating Customer Connections. For more information, please visit http://www.soundmarketing.com, call 1-800-451-8273, or e-mail jack@soundmarketing.com.