Protecting Your Castle: Developing your Agency Value Proposition

Protecting Your Castle: Developing your Agency Unique Value Proposition (UVP)

Why should I buy a policy from your agency? It’s a simple question. What makes you different from the guy (or gal) down the street? Why shouldn’t I just take your quote back to my own agent and have my agent match the coverage? These are some of the questions I often start with during my agency sales meetings. These are the simple, yet utterly critical questions as agents we need to focus on and be able to answer.

This is an interesting time to be an insurance agent. The marketplace has become crowded with local, regional and national competition. Competition that is just chomping at the bits for your client to see one Ad on TV that prompts a 15 minute phone call. Not to mention the alternative distribution models that are growing leaps and bounds each day. The market is shifting and that means now more than ever, traditional brick and mortar agencies need to differentiate themselves.

There was a time in our industry when purely having market access was a differentiator as an agent and unfortunately that time has passed. There was a time when merely filing a claim or periodically taking a payment on the weekend was all that it took to retain an account.

So, what’s really changed? There are over 100,000 Captive Insurance agents in America. Not only that, there are over 40,000 independent insurance agencies in the U.S. and over 1,100,000 licensed insurance agency employees as of 2019. So, what does that all add up to? It’s a crowded field and in business that means opportunity for the prepared, which also means that there are some that need to prepare for a massive looming threat. The threat being inability to adapt and communicate value.

Driving home from work one day I overheard an interview in which Warren Buffet was describing the key to victory for a business. The interviewer asked him for the secret sauce when it comes to investing and finding a worthwhile business. Buffet said, ‘A moat is the key to protecting any castle.’ A moat in his view was the unique value proposition of the business. What truly distinguished one business from another? So, the question to you is, what is the moat protecting your agency?

How do I design a (UVP) unique value proposition?

In 1996, I was sitting with my great grandfather at a CoCo’s dinner table in Westlake Village, CA. Back then the kid’s menu had a giant maze on the back to solve. This must have been the hundredth time I ate at that CoCo’s and filled out one of those menu mazes. What I figured out on that day, was the easiest possible way to solve a maze, was to start from the end and work my way backwards.

So, let’s start by asking a simple and straightforward question. Who is your target market? As an Agent, who is a client? Specifically, if someone walks into your agency tomorrow, who is a good fit for your agency and who is not a good fit for your agency? Do you attempt to write every possible account or do you refer out clients to actual specialists? Once you've thought through a target demo, then and only then can you figure out a value proposition. Remember, you can offer a lot of valuable services, but your clientele might not find any of it valuable for their specific needs.

The next series of questions is how you can actually pair the needs of your target market and develop actual value added services to help retain accounts. As an Agent, what is your value? Why do clients come to you over someone else? What do clients rave about with your agency? What separates your agency from other agencies?

Here are some examples:

Policy Design, Education and Consultation

o  Are you explaining the coverage? Do you give a comprehensive review?

Trust / Peace of Mind

o  What are you selling the customer?

Claims Service and Consultation

o  Do you provide claims consultation or help file claims?

Annual Insurance Reviews

o  How often are you touching your clients and analyzing needs?

Responsiveness and Overall Service

o  When I call do you pick up the phone? How long does it take to return a call/text/email?

Weekend and After Hours Service

o  If I go to the dealership and they require insurance on a Saturday, can you help me?

Market Access

o  Can you help me?

Personal Touch

When I took the leap from my corporate chair into owning, running and building an agency from scratch. The only thing on my mind was client acquisition and the furthest thought occupying it was having a UVP. As I developed my practice and narrowed my target market, I found that life became infinitely easier by having that clarity of purpose. As you begin to hone in and develop your agency UVP, think about this sentiment from Warren Buffet. On an investor call Warren Buffet described his insurance and client acquisition philosophy to his investors. In which, he stated, ‘One day a disaster is going to strike, a game changing disaster will strike, something we can foresee or something that is un-imaginable to us in present day America. After the major disaster what will separate GEICO from other insurance carriers is that GEICO will still be aggressively looking for new clients.’ (This is in no way an endorsement for GEICO)