Starting an insurance agency from scratch is inherent with multiple challenges. In this interview, Joseph Puckett, currently President of Agency Operations at Craig Wiggins Allstate Agencies, discusses both the initial marketing mistakes he made and how he ultimately overcame those challenges:
Q: How did you get into the insurance agency business?
A: I was in retail banking for about four years with a top ten bank, but it wasn't mine. My family had owned their own businesses for decades. I didn't want to get into the family business, but I did have a desire to own my own business.
What accompanies owning your own business are many, many challenges. Like a hunter, if you don't go out every day and bring back some food, you don't eat. And it's very much the same in running your own agency. I wanted to be able to run my own business but still be able to help people.
Q: What challenges did you have when you started out?
A: I had a very good accountant and a very good attorney help me set my agency up properly. But what do you do after your write policies for family and friends, especially the next day, the next week and the next month?
Generating leads is the hardest part of the business.
Internet Leads
So I started by buying Internet leads. I found that half of them were pure junk! For the other half, you may only ever get 20 percent of those leads on the telephone. And those same Internet leads are going out to four, five or six other agents, so the prospects are getting bombarded with telephone calls, e-mails, letters and post cards. As a result, I was only closing about five percent of my Internet leads. Worst of all, the chances of retaining those clients was awfully small. At $15 per lead, when you are only closing five percent of them and then not hanging on to them, you can actually lose money.
Direct Mail
At the same time, I was sending 2,000 to 3,000 pieces of direct mail, at about 70 to 80 cents apiece. Yes, people were calling as the result of the direct mail, but it was not the kind of customer that we wanted. Direct mail and the Internet leads were a real time vampire for us, trying to follow up on those leads to determine what people wanted. It was a lot of activity but, again, it was losing me money.
Social Networking
After four or five months, I stopped all of that and started to put all of my focus on social media marketing and building a referral network.
It all began while I was in training. One night I decided to start a Facebook fan page for my agency that I would be opening up in about a month. The reason I did that was because I was seeing Facebook everywhere. Even the local restaurant had a handmade sign that said, "Like us on Facebook."
The next day I went back to training and told a few of my classmates, explaining to them that it might be a neat way to get a few extra phone calls per month.
"Why would you do that for?" they asked, "Don't you know that Facebook is just for college and high school students?"
But what I found, even in my first four months when I was wasting my time and money on Internet leads and direct mail, Facebook was getting me calls. People were reaching out to me and saying, "Hey, we're Facebook friends," or "I'm a fan of your Facebook page, do you do boat insurance?"
I was writing more business from my social media efforts than from all of that other junk.
If I had been smarter, I would have only done the non-productive activities for one or two months, and would instead have focused on social media and building my referral network. The leads I get from them close 30 to 40 percent of the time. Why? Because those are the people who want to do business... with me.
Referral Networking
The best referral partners for me are Realtors and especially mortgage loan officers. The loan officers need to have the homeowner's insurance in place before they can close the loan. So I give them exactly what they want, when they want it, and how they want it. I operate on their terms, but also take great care of their clients. I make it easy, informative and fun. And maybe I can save their client $200 to $300 - that's a week or two of groceries.
Social media provides a fantastic way to connect with referral partners. You can ask, "Tell me a bit more about your business. Tell me what makes you successful. I want to learn more about you." And, in return, you can tell them more about your business, what makes you successful, and what you are passionate about. It's a great medium to bring you together with mortgage loan officers, Realtors, and other potential referral partners.
Referral partners can each send you 2, 3, 4 or 5 referrals a months.
Q: If you were starting over, what would you do differently?
A: I would have implementing telemarketing on day one. I waited too long. Don't hire a telemarketing service, instead you can have local college or high school students or people who only want to work part time call directly on your behalf in the evenings, while respecting the national Do Not Call list.
Second, I would have put more emphasis on my referral programs. Referral partners don't want the $10 gift card, they just want their clients to be taken care of. They want you to do the job right the first time and they want you to be easy to work with.
Third, I would delete the junk marketing. Direct mail, especially if it is corporate-like, is horrific!
On the other hand, if you mail an individualized, hand-written, hand-stamped note, it can be extremely effective. Rather than dumping 3,000 direct mail pieces a month at the post office, I should have done 50 personalized direct mail pieces a week - and combined that activity with my telemarketing campaign.
Fourth, I should have done a better job following up on my prospect database. When you contact these people, sell on value and on the opportunity they have to work with you. You may not always be the cheapest, but there is great value in working with a local agent who is accessible, who understands the client and their needs, and in protecting what is most important to them.
Q: When it comes to social media, many agents wouldn't know Facebook from Snapchat. What's one thing we could do to get started to promote our agencies on social media?
A (laughs): First, follow your competitors. Search Facebook for other people in your own company, if you are captive; or other independent agents around you. See what they are doing. See what you think about it.
Put yourself in the shoes of a prospective customer or a prospective referral partner. Look at their Facebook page and their activity. Does it appeal to you? Or does it turn you off, or make you indifferent?
Second, just get started. Start a personal profile and then create a page for your agency. It takes about three minutes.
Third, see if you can post something interesting every day. For instance, when the federal government was changing the flood insurance program, it was a huge opportunity in flood-affected areas for agents on Facebook to keep their clients and prospective clients up-to-date.
Don't just post, "Call me for a quote." If you are going to do that, you might as well delete your Facebook page. It's not going to do anything for you!
Q: In summary, why participate on social media?
A: Dr. Ivan Misner, the Founder & Chairman of BNI, the world's largest business networking organization states that
Visibility + Credibility = Profitability
You have to build visibility first - that's growing your network. Second, build your credibility by being a good resource to the community and not a spammer.
Once you build your visibility and your credibility, you will start getting quote requests and referrals, and people wanting more information. All of that will lead to profitability.
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