BE PREPARED

As the year 2005 begins to draw to a close, it is proving to be a most momentous year-driven by divergent swings and sways, both positive and negative. The industry cheered as many carriers posted the most solid underwriting profits in years for 2004. Cheers became subdued as a continuing softening cycle threatened revenue growth and spiked competition. Unprecedented pressure and salvos from governmental and regulatory agencies cast a harsh spotlight on market leaders, and our industry as a whole.

On the retail side, these moves set accounts and industry talent in motion and threatened-or even eliminated-valuable contingent revenues. Commercial insurance buyers re-thought strategies and resources. New retail agencies emerged, and mid-sized and smaller agencies were strengthened and emboldened to compete for larger, middle market business.

On the wholesale side, similar shifts in ownership and focus also took place and the program market showed signs of expansion and revitalization.

And carriers stood back to determine the impact of it all-and re-strategize their approach as well.

Then Hurricane Katrina hit, followed only weeks later by Rita, with outcomes and futures still uncertain at the time of this writing-but with industry watchers predicting a big impact.

Each of these shifts has already triggered a variety of responses and actions by all players concerned-actions driven to protect market share, retain clients, and stabilize internal operations. Actions, too, aimed at taking advantage of marketplace shifts that created vulnerabilities in competitors and continue to present opportunities to expand business. And actions focused on response to marketplace conditions in the wake of Katrina and Rita-hard market or still soft? Variations by product or geography?

It's the anticipation of these positive and negative changes that should activate your marketing antenna and agenda. These factors make now an ideal time to anticipate which way the market is headed and to gauge what you will need to meet the challenges and turn potential problems into ... well, just plain potential!

Careful analysis and an aggressive, thoughtful evaluation of market direction and pressures, pro and con, allows you as an independent agent, carrier, wholesaler, reinsurer, or TPA to craft a response as one who takes advantage of opportunities, not as a victim of circumstances. While certain circumstances of the market may seem beyond your control, your response is not. Look to marketing tools and resources that can help you evaluate your position. Use formal market research or focus groups to identify trends and purchase patterns. Use surveys or Web site polls to stay up to date on the attitudes and needs of your customers, distributors, and suppliers. Tap into industry news and resources to gather data on the present and impending market environment.

Change gears quickly

Once data is collected, analysis begins. Be sure to share what you learn with your management and staff. Together you can define various options that will take advantage of-or protect-your position. The marketplace changes quickly, however, so avoid paralysis by analysis. Instead, identify the priorities and targets of your customers and market partners and create action plans accordingly. Design a marketing plan that identifies a coordinated series of efforts that aggressively get the job done. Start with a 6- to 12-month plan and evaluate the results after the first six months to test response. At that point, you can decide on the plan's continued direction.

At the same time, you may have to adjust your approach to the market and retool some of your techniques. For instance, in a more competitive, changing environment, targeted efforts are better than a generic, cookie-cutter approach. You can benefit from strategic segmentation of your customer base by size, type or focus. If the marketplace is changing for you, it's most likely changing for customers as well. That means they, too, may have new concerns and may not respond-as a group-to the exact same presentation or "sell" of your products and services. Make an effort to learn more about your customers' businesses-then you can "group" like-minded customers and customize your marketing efforts. This can take the form of developing industryspecific sales materials or presentations geared to different sized or focused companies.

You can revitalize your sales calls by supplementing "leave behinds" like coffee mugs or pens with other tools that customers will perceive as valuable and "tuned in" to their needs or concerns: a relevant exposure checklist, a new way to calculate their exposure or coverage requirements, or "10 ways to cut your insurance costs."

Look for new ways to create "buzz" about your company. Although carriers, wholesalers, and MGAs most often sell through retail agents, they can benefit by employing "pullthrough tactics" that utilize advertising or direct mail tactics to reach the ultimate personal or commercial insurance buyer-albeit with a caveat like, "have your agent or broker call ..." Even when you don't sell "direct," this kind of effort creates name recognition and generates interest and product demand from the end user back to your primary retail producers.

Exploit the newest electronic methods for keeping in touch. This includes-first and foremostrevitalizing your Web site to effectively tell your story, identify your competitive advantage, and streamline transactions. Also investigate providing relevant information utilizing an interactive CD, or offering to keep your customers updated on the latest trends through a permission-based e-newsletter. Utilize search engine optimization to your benefit so that you appear "up close and personal" on Google, Yahoo, MSN, et al. But take care not to abuse electronic technology through too frequent or indiscriminate, non-targeted messaging. Becoming a "spammer" can hurt your reputation more than help. Unsolicited e-mails can leave you open to steep fines or even bans from ISPs.

To keep abreast of changing environments, make even more of an effort to participate in insurance and niche trade shows or conferences to demonstrate and reinforce your presence and leadership-and generate new relationships. Be sure to set clear objectives and, as with the rest of your marketing efforts, follow up with contacts you make during the conferences or trade shows.

Utilize seminars, newsletters, speaking opportunities, and media visibility (within your own insurance arena or vertical market trade press) to inform and educate targets. Insurance products are often viewed as commodity. By creating a profile that exploits your expertise, you set yourself free of the commodity trap.

New bag of tricks

With new marketplace pressures, what products or services will be "nice to haves" or "have to haves," and how can you distinguish the products you develop or represent from the pack? Will the environment create the need or desire for a new specialty program and do you have the resources to bring it to market? What risk management or claims control services will be top-of-mind in 2006? Alternative risk or captive options?

Changing times don't necessarily call for desperate measures, but they do call for innovation, creativity, and persistence.

An aggressive program can enhance your chances of capturing attention-and business. Use frequent touches via direct mail. More effective touches can now be generated by advances in response-enhancing, digital personalization of your direct mail. This can include, for example, providing highly customer-specific apps in what is essentially a massproduced marketing piece-something impossible to cost-effectively achieve just a few years ago.

Consider whether a "personalized landing site" on your Web site might boost customer interest, loyalty and interaction by highlighting information and product news most specific to individual customers' interests, needs and buying habits.

Carriers, wholesalers, and MGAs should also be looking at gaining exposure and driving business via some of the agent portals now available. Such portals are an excellent means to develop additional producers, cut marketing costs to farflung markets, or test viability and response in new territories. And for everyone in the industry-whether you're marketing within the industry or direct to insureds-you can boost your visibility by supplementing traditional print advertising with the many creative, online options these same publications now offer.

Invest smart

No one can, or should, spend money foolishly or throw it at the wrong targets. You will benefit, however, by investing strategically to promote your products and services that serve your clients and set you apart. Set aside a reasonable budget each year. Businessto-business advertising benchmarks are 1% - 2% to retain current market share; 3% - 5% to launch or expand your business. But dollars alone are not the answer. Time and attention are also required. Sales prospecting fills your pipeline and hones business development skills.

Take advantage of co-op programs between retail agents and brokers, carriers, intermediaries and other service providers to extend your reach and visibility-and at the same time, save money.

Marketplace disruption, hard market or soft, same players or new entrants, the formula for success is the same: anticipation + action = success.

© 2005 Rough Notes Co., Inc. Provided by ProQuest LLC. All Rights Reserved.