Brands & Independent Insurance Agencies

Much has been discussed and considerable investments have been made specific to branding within the independent insurance agency market over the past five to 10 years. Intense pressure to “brand” exists because of the $6 billion in advertising spent by a handful of personal lines carriers, none of which are exclusive to independent agency carriers.

Branding is also kind of sexy to many agency owners because paying someone to build a brand is easier than making sales and if it works, little dream fairies begin dancing in owners’ heads that customers will begin flooding in.

In my discussions and strategic planning sessions with agency owners, I have only met a half dozen or so agency owners that truly understand branding, what to expect, and how much hard work is involved on their part after the brand design and initial marketing plan is completed. One of the most glaring mistakes agency owners make when beginning to consider a branding program is understanding what it means “to brand.”

I’ll put it graphically: To brand, when done properly, means burning an identity into your agency so deep, smoke rises just like when a ranch hand brands a calf. You will wear that brand on your forehead for evermore. Your people will wear that brand on their forehead forever more. Do not think otherwise if you want a good ROI on your branding investment.

Branding, when done well, makes you and your agency distinct. Being the same 35- to 65-year-old guy dressed in business casual floating the same tag lines agencies have been using forever is not distinct. Distinct means a product that stands above the rest (difficult to achieve in most insurance lines from an agency’s perspective). Distinct means making consumers think your product is different even when it is not through awesome logos, creative tag lines, or massive advertising. (And I mean massive – which is a clue because when you see massive advertising the advertiser is trying to create a brand through inundation due to no other material distinction, something some beer companies are experiencing and maybe a few insurance companies, too).

Brand distinction in the insurance industry, barring those with massive advertising, is usually built on consumer experience. Distinction based on consumer experience is both beneficial and difficult. Building brands through consumer experience is quite difficult because it takes time and requires considerable consistency. This fact is why an agency’s brand must be worn on the forehead.

What Brand?

A brand is supposed to convey the following:

• A promise to consumers that you are worthy, reliable, mistake free, and high quality.
• Trust that if something goes wrong, you will fix it.

Not much more needs to be said regarding what branding is supposed to convey but consistency is generally troublesome to independent insurance agencies. It is troublesome because agencies lack consistency in their client experience and lacking consistency in their client experience means building a true brand is nigh on impossible.

Why do I say agencies lack consistency? Simple. When I conduct agency E&O audits and due diligence for valuations, I consistently see CSRs and producers failing to follow the same procedures. Some use proposals, some don’t. Some use beautiful, high quality professional proposals and some use black and white copies (these should be banned by the way). Some producers are ignorant of coverages and some are geniuses. Some CSRs are great and some probably shouldn’t be allowed to deal with clients. Some CSRs know what the procedures are and some do not know the agency has procedures. Never mind the producers who haven’t a clue what the procedures are. Keep in mind, I see these differences of this magnitude in single agencies. This does not even begin to address the huge differences in claim and billing practices between any one agency’s carriers.

What is the value of a brand when the consumer has no idea what level of service they will get from one CSR to another and one producer to another?

On the other hand, experience based brands built on consistency are the most valuable brands and the most affordable brands for agencies because they are built patiently and on hard work. Once built and maintained, they become almost impregnable. The emotional connection with the client becomes a fortress wall.

Building experience based brands is not nearly as sexy as buying branding but the combination of what insurance agencies are selling and the relative cost makes building experience based branding ideal.

Experienced Based Brands

To build an experienced based brand does not require exceptional knowledge. The most important requirement is leadership. Leadership is required to build and enforce consistency. Leadership is required to get everyone on board because the brand must be permanently imprinted into everyone’s forehead (figuratively of course) as a constant reminder of the agency’s brand. Leadership is not required, whatsoever, to allow producers to do whatever they want. Leadership is not required if the agency owner sells in their own way regardless of the agency’s procedures. That is abdication of leadership.

A leader then will build and create consistency of procedures, proposals, quoting, education requirements, servicing standards, presentations, and even require producers to use the same sales approach.

For example, all producers will focus on price sales or all producers will focus on broker of record sales or all producers will focus on coverage sales, and so forth. Many people will not want to wear this brand because brands require accountability, at least experience based brands, to have any value. The fact though is that with experienced based brands, clients will never get the message if your employees do not get it first. Agencies cannot afford employees that do not practice the brand’s consistency.

A major additional benefit of consistency is reduced E&O exposure. The E&O term is, “invariable practice.” Furthermore, when my firm measures the price of inconsistency through our P.E.P. program, we commonly identify 20 percent waste due specifically to agency inconsistencies.

The key then is a leadership assessment. Does your agency have the leadership required to build consistency even if it means dealing with conflict? If not, who can you employ that can deal with conflict and/or build consistency? It is your choice whether to spend money on sexy branding that is not designed in any way, shape, or form for this industry, neglect to make any effort, or build experience based branding. What will your choice be?