Friday 13 January 2017

Should I Market Insurance Agents?

Posted by at 9:00 AM in

Insurance agents have taken a tumble. Well, not literally – but they have fallen out of the #1 position as the most likely to refer work to a local restoration contractor like you. 10 years ago, even 5 years ago things were different. When I owned my full-service restoration business there was one insurance agent who brought my company over $300,000 of work a year and I never had to ask him for it. He told me once, “As far as I’m concerned there is only 1 restoration company in this city.” I liked that and greatly benefited from from his support! BUT, I will say this to you – if you don’t already have deep relationships with several insurance agents who refer work to you regularly I wouldn’t waste my time marketing to them today.

Why is this you ask?

Think about it – your visits are a distraction to the agent and their staff; you are an unwelcome guest who has little to do with agency work; and you are part of a long line of others who continually interrupt and disrupt the agent’s work. How would you feel if the roles were reversed? The biggest change that has occurred in our industry in the past 10 years is not technical - it is the dominance of TPA work. You can hardly name a single insurance company who doesn’t outsource their claims management to a Third Party Administration … USAA, American Family, Farmers, Nationwide, MetLife, Auto Owners, Fireman’s Fund, Allstate, Liberty Mutual … even State Farm has recently begun a pilot project with a TPA after terminating their PSP program 5 years ago.

Most insurance company policies today put the strong arm on their District Sales Managers and agents to NOT refer work to local contractors. Instead agents are pressured to send claims through channels to their carrier’s TPA who is being paid to manage the claim themselves. Adjusters long ago lost their freedom to make personal referrals and local agents have now joined in this restriction. I am not saying that insurance agents should be entirely ignored in your marketing plan but I am saying that making the rounds, disrupting their day, and intruding uninvited is NOT the way to build referral relationships with them. There ARE several high leverage activities that MAY lead to such a relationship. Each one is focused on giving - not getting, and are seldom used by most contractors ... AND they don't require a full-time sales person for them to produce. In fact, if you are like most restoration contractors you are not getting your money's worth from your direct sales team and may want to assess whether they are needed.

If you do employ salespersons you may want to retool and redirect them to other more likely referral relationships than insurance agents. So, in light of all this what’s a hard-working restoration contractor to do? You can either try to buck the tide or ride the wave – the only major consistent source of referrals is direct assignments from TPAs. Becoming a program contractor is the best and fastest way to significantly increase your sales volume. If you follow my blogs you know that when mentioning revenue sources I always end up at the same place … underscoring the key role of TPAs in growing your business. Why? For one simple reason … they are the best and most reliable source of new work for most contractors.

What are you going to do … insurance agents are no longer a good source of regular referrals, plumbing contractors expect a pay to play, AdWords campaigns are costly and produce meager results … so what are you going to do? Go to the one source that can fill your bucket with new work … direct assignments from TPAs. If there was another way I’d tell you! Could your company be approved for direct assignments by one or more of the 10 National Third Party Administrator Networks?? ABSOLUTELY you could!!

Reference: 6 Month Coaching Plan – The Revenue Generator – The Ultimate Revenue Booster for Your Business Sales Growth