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Is Your Carrier Also Your Business Partner?

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When 17th century businessmen gathered in Edward Lloyds London coffeehouse to write some of the worlds first insurance policies, they knew the value of building strong relationships. Four centuries later, relationship-building is even more important because, along with dramatic technological change, weve seen increased profit pressure on everyone involved.

Today, it is absolutely critical for carriers to build productive relationships with their distributors. The operative word is “productive” and that means going well beyond a round of golf and some refreshments at the 19th hole–measures that used to suffice when building relationships.

In the current, highly competitive environment in which we all operate, a carrier must provide significant added value, which includes being able to identify and articulate how the products and services provided by the carrier fit within each distributors opportunity. Added value also means enumerating which products provided by the carrier actually fit the distributors market–and ultimately the customer–as well as the marketing muscle to back it up. Anything short of this is business as usual. And today, business as usual is a recipe for failure.

Todays best carriers function much more than ever like professional business consultants. Successful carriers have developed processes that help general agents take an objective look at where they fit in the market. Ideally, this process includes an evaluation of how the agency interacts with its brokers, what segments of the market it has the ability to serve and serve well, and–most important–where the most lucrative profit opportunities lie for the GA and carrier alike.

For carriers, this process may involve acknowledging that some of their products and services might not be as appropriate for some customers as those offered by competitors. This candor–formerly unheard of–adds credibility.

Measured and unbiased assessments of a companys products and services can be one of the most effective tools for building trust with distributors and ultimately winning additional sales. A carrier adds considerable value to a distributors business by providing an unbiased evaluation of where that carriers products fit. The old broad-brush approach of “sell our product all the time” doesnt add the same value because it dilutes the relationship and lessens credibility.

Providing objective market and product analysis is only the beginning, of course. Its just as important for carriers to be able to help an agency implement and track a dedicated sales plan for each product, based on the agencys sales objectives.

By collectively participating in this effort, both carrier and agency quite naturally develop a more productive relationship–one that grows even closer as distributors realize that the carrier has committed its expert resources to helping the agency become more profitable.

One of the most important things a company can do to help its distributors is to develop and implement an effective marketing campaign. Intensified profit pressures and shortened learning curves mean a marketing campaign must be tailored to the needs and financial objectives of both the company and distributor. Carriers must deliver a message that can easily be communicated to brokers, demonstrating exactly where a product fits in the market and why.

A strategy that works in this environment is one that gives distributors detailed information about a carriers products, including how they compare with the competition. This provides distributors with credible and useful sales information they can immediately feed to their brokers.

An important part of this effort must include personal visits with GAs, in order to explain where the carriers products fit–as well as where competitors products may present other choices. By targeting the right agents and their customers, carriers and agents should see an increase in sales. Such a marketing process allows a carrier to provide its sales force with far more relevant information than the old practice of simply sending out a flood of product information and expecting distributors to find the time to assimilate it.

A good marketing campaign must be carefully tailored to the style and requirements of its audience. Because marketing materials have to make the most impact in the least time, a campaign should be staged so that each month distributors receive something new that will capture their attention.

It is critical to help agencies get the message out to their agents in a steady stream of compelling and relevant ways. As with marketing of any kind, frequency is vital to achieving significant name recognition. The goal is simple: By delivering consistent sales messages monthly, brokers will think of you first in those categories in which you excel.

The path to productive business relationships is just as simple. It begins with knowing your competition and where your company fits against it, then delivering that message effectively to your distributors and their agents. Ironically, in spite of the growth of technology, the best way to conduct this process is still in person. Anticipation for a product can be built on the phone, but the only truly effective way to gauge distributor response to new concepts and important messages is knee-to-knee.

In fact, that part of the process hasnt changed much from the days when people were conducting business at Edward Lloyds coffeehouse. Its just that the stakes are so much higher.

is senior vice president of sales for Zurich Life, Schaumburg, Ill. He can be reached at ken.olson

Reproduced from National Underwriter Life & Health/Financial Services Edition, November 11, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.


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