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Last time I wrote about the coming revolution in the insurance distribution business where the traditional agency model will be profoundly, and irrevocably, changed by disintermediation capabilities of technology. I’d like to offer some thoughts on how the survivors will react to these inevitable changes as they evolve to survive and thrive.
First let’s revisit what customer engagement means. An engaged customer is someone who views the agent as a partner. The IIABA “Trusted Choice” program provides lip service to what is required but they have the idea right. The agent must become a “trusted advisor”. As I see it an engaged customer is one in which the agent has a direct, personal and meaningful relationship. Customers who you cannot engage will go away permanently.
So, how can we engage them?
The most critical thing to do is change from a transactional sales model to a relational one. By this I mean that you can no longer sell price based on a comparative rater result. Customers will get this faster, better and cheaper directly from the carrier. You must develop a means to get to know your customer and for them to get to know you and your capabilities. You must understand their life, their lifestyle and their aspirations. You need to be able to give sound advice on risk assessment and management along with insurance information. You must be someone who knows other professionals who can help the customer achieve their goals.
And, in the personal insurance space, you must be able to do it hundreds, or thousands of times, per year on reduced commissions from the carriers (for that is obviously coming too).
I’m optimistic that this can be done though by staying in almost constant communication with customers. The technology already exists agents will only need to embrace it, adapt it and use it. Service will need to be 24/7 and personal. It will need to be instantaneous with no waiting time. It will need to be value based and not price based (although price will always be important).
Not all agents are going to survive. Those that recognize what is coming and do what is required to develop and sustain customer engagement will.