Super Agent

Archive for October, 2012

It’s All About Shared Value

Many agencies aren’t taking advantage of existing opportunities to create, communicate and deliver value to clients, but doing so remains a top objective of most. One of the best ways to build long-lasting, collaborative relationships with clients, maximize profitability and ensure sustainability is to focus on creating shared value. Shared value is a concept that was first introduced by Michael E. Porter and Mark R. Kramer and was discussed in depth in their Harvard Business Review article “Creating Shared Value”.

So, what is shared value and why is it an important idea to consider?

Shared value focuses on the connection between competitive business advantage and social or economic issues. According to the article “there are numerous ways in which addressing societal concerns can yield productivity benefits.” Some of the strongest shared value connections are the connections between company productivity and worker safety, employee skills, or employee health.

For agencies specializing in Workers’ Comp, the opportunity to create financial value for both parties increases if producers are also focused on workplace safety and risk management. Porter and Kramer assert that if business leaders are committed to “reimaging value chains from the perspective of shared value [it] will offer significant new ways to innovate and unlock new economic value that most businesses have missed.” Realizing the social impact of your day-to-day work will not only give you a sense of purpose and motivation, it will increase new business opportunities, lead to the development of innovative solutions and processes,  and help you create mutually beneficial partnerships with clients who are being financially impacted by problems or risks.

Don’t End Up Someplace Else

When agency principals sit down to talk about their goals, they often outline only their financial objectives. But, to effectively “get in the door” with leverage and grow organically, an agency needs more. Creating goals and objectives may seem like drudgery, but agencies won’t succeed if they can’t articulate and clearly define what they have to offer. Goals and objectives should focus on the leadership, capabilities and value that are specific to an agency, and they should work conjunctively with the agency’s value proposition to communicate how an employer will benefit from a relationship with them. 

According to Morgan Norman, Business Insider contributor, goals “shouldn’t focus on only the end result — goals should detail the journey.” This means it’s important to consider the “what”, the “how” and the “why” as you formulate your goals and objectives.

For example, an agency that specializes in Workers’ Comp may have this as one of its objectives:

“To Reduce the Number, Cost and Duration of Employee Injuries.”

This is only one objective; in order to demonstrate various strengths, it’s important that agencies formulate several.

When you have completed the process, ask yourself these questions to test the efficiency of your goals and objectives:

(1) Do they support your value proposition and the Processes your agency has in place?
(2) Do they communicate how clients will benefit from a relationship with your agency?
(3) Do they map out your leadership, capabilities and value?

It’s important to remember that your goals and objectives should define who you are as well as who you want to be it to, not just the revenue you want to generate.

“If you don’t know where you are going, you’ll end up someplace else.”- Yogi Berra

Using Social Norms in Messaging

An article in the latest issue of Harvard Business Review talks about using social norms in messaging to help change the behavior of customers and increase favorable outcomes for businesses. In one example provided, British tax authorities sent letters with threatening language regarding penalties to nonpaying citizens. One third of the recipients ignored them. But, when the language in the letters was changed to highlight social norms instead (“Over 93% of citizens living in your town pay their taxes on time”), payment rates increased dramatically. Why? According to the article, “People’s behavior is largely shaped by the behavior of those around them—what behavior scientists call social norms.”

How can this help you in your sales process? Instead of saying: “We can help you address the problems you’re facing”, say: “Others (specific number or percentage) who have adopted these strategies/addressed these risks/focused on these solutions have been able to tackle problems head on and achieve better outcomes.”

Here are a few key points to remember:

(1) Only highlight positive behavior. Highlighting negative behavior by pointing out a “common mistake” usually backfires.

(2) If no norms exist, publish case studies or surveys with specific metrics that you can utilize.

Making these small changes to the language in your messaging can lead to better results; however, using this technique alone is not enough. It should be only one of the powerful tools in your messaging tool kit.

Know Your Capabilities

If your website is like most agency websites, it probably focuses on the virtues of your agency, sharing information about how great your services are, how long you’ve been in business and what resources are available to your clients. Unfortunately, promoting and advertising great service isn’t the most effective way to get in the door in today’s complex market and capture the attention of today’s prospects. It’s often not just an agency website that uses commoditizing language; producers are guilty of it too. So, how can you avoid this? The first step is to truly understand and leverage your capabilities.

Understanding your capabilities sounds simple, but if asked, most producers would provide a list of services. Knowing your capabilities means knowing the impact you have on your clients and the outcomes you help them to achieve.

According to an article on Inc. by Karl Stark and Bill Stewart, “your natural tendency will be to focus on the attributes your business has that will differentiate you and win the sale. But in many cases, those things are not important to prospects. Focusing on these “nice to have” or “not important” factors will, at best, give the customer the wrong impression, and at worst, turn them off to furthering the conversation.”

A producer must be able to effectively, simply, and clearly communicate that by engaging in a business relationship with the agency a client will decrease risks and see improved business outcomes.

Are Your Clients This Loyal?

Last post, we discussed Jill Konrath’s dynamic presentation at our recent annual event. Another speaker, Vice President of Summit’s Southeast region, James Wood gave an excellent and engaging presentation on loyalty. He asked the members of the audience to talk about a product or a company they were loyal to, and the examples ran the gamut from makeup lines, to technology products, to car companies.

 James told us a story about his sons, both four-wheeling enthusiasts, both suited up in the best gear—but each loyal to a different company characterized by their colors, yellow versus green. From the ATV to the gloves, his sons wouldn’t ride or wear anything outside of their favorite brands. When one of them was injured, ankle at his shoulder, he begged his dad,” just don’t cut off my green jacket!”, and his brother argued that if he had chosen to ride in yellow, the accident wouldn’t have happened. Everyone in the room was absorbed in the story. What makes customers so loyal?

According to James, “customers remain loyal due to emotional connection developed over time and through reinforcing experiences.” In other words, emotion matters. So, how can you foster this kind of loyalty in your clients? Here is a list of questions to ask yourself that James provided:

(1) Can you and your producers clearly articulate the “brand” of your agency?

(2) Does your brand communicate more about you or does it focus on the customer?

(3) During conversations with prospects and clients, other than price, are you able to articulate tangible value to them?

Capturing the Attention of Today’s Busy Prospects

At our recent annual event for members, Knowledge and Networking 2012, we were honored to have sales expert Jill Konrath as the Keynote speaker, and she kicked off the weekend with a dynamic presentation on selling to “crazy-busy” prospects that included these three tips to remember:

(1) Eliminate Sales Talk

Insurance agents tend to use too much industry jargon. Consequently, employers often tune out and nod their heads in agreement when they don’t really understand the content or purpose of the message. Instead of letting you know, “I don’t understand what you just said,” they may dismiss you, and, in doing so, take away your opportunity to show them what value you bring. Avoid common phrases like “we assist employers in managing their risk,” and focus on simply and clearly articulating your message in order to have a more effective conversation. 

(2) Jolt them out of complacency

The best way to surprise the employer and jolt them out of complacency is to ask a pointed question that is focused on them, and that can potentially have a significant impact. For example, you might ask: “Has anyone ever shared with you that your business may be at risk if…?” The goal is to prompt them to think differently.

(3) Educate them on what’s possible

Jill explained that employers are often too busy to keep up to date on how others are successfully managing challenges similar to theirs. Using metrics and utilizing case studies helps show employers what’s possible if they choose to engage in a business relationship with you. If you can help them reach their business goals, let them know, and remember to always stay focused on them.

Employer Challenges = Agency Opportunities

As we’ve discussed in previous posts, there are few issues that drive more emotion for employers than injured employees and workers’ compensation. Because employers often have little knowledge about what they can do to drive down costs and improve injury management results, an agency with the capability to address workers’ comp problems and show employers a better way to manage risk will capture more business opportunities.

According to an article on CFO.com, “2013 will be the second straight year with workers’ comp rate increases”, and many company CFO’s are concerned. Imagine you are an employer who thinks that bidding your workers’ comp insurance is the only way to reduce costs. If you can make the prospect aware of other factors playing into their coverage, you can capture their attention and tap into that emotion. Here are a few examples:

- In many cases, injured employees aren’t getting the right treatment by the right doctor at the right time.
- Employers are often overcharged through the premium audit process.
- Experience modification factors are incorrect and mismanaged.
- Employers may be exposed to disastrous uncovered Federal Acts’ losses.

It’s important to remember that the challenge in this process should not be helping the employer understand your solutions—it’s vital to remain focused on their success, and the challenge should be helping them to self-discover these risks and threats to their business in order for them to understand the value of engaging with you. Isolating your prospects pain by leading with workers’ comp gives you a distinct advantage over other agents simply peddling their services.