Program Business Leaders Receive Targeted Advice

Target Market Mid-Year Attendees Learn About Planning, Branding and Purchasing

The Target Markets Program Administrators Association held its first midyear meeting last month and attracted almost 200 program business professionals. Attendees included representatives from 90 insurance agencies, 22 insurance carriers, and 20 vendors.

In-between scheduled networking sessions and informal meetings at the ACE Conference Center outside Philadelphia, attendees heard presentations covering technology, marketing, market research and strategic planning.

Strategic planning
“What gets planned gets done,” proclaimed Art Seifert, president, The Lighthouse Companies, at the start of his talk on the value of business planning. Seifert’s own Annandale, Virginia-based agency started just 10 years ago and with the help of strategic planning now has $76 million in non-comp premium and more then 2,500 clients.

Seifert believes that goals and tasks that are written down become more meaningful as commitments than those that are not. “It’s almost as if they become exaggerated in your mind once they are written down,” is how he described it.

Success begins with a vision, he stressed. “If you don’t know where you are going, it doesn’t matter how you got there,” Seifert said in urging attendees to think about where they want their businesses to be a few years from now.

To get the most out of the planning process, he advised agents to use an outside facilitator and, if possible, convene off-site in a distraction-free environment.

He recommended inviting broad participation from employees in the process of describing the vision and in developing a plan. As part of his effort to include people, he distributes a questionnaire to employees asking for their vision for the company. Their replies are anonymous so that they feel free to express their true opinions.

He urged agents to follow a SWOT analysis, one that seeks feedback on a firm’s strengths, weaknesses, opportunities and threats. This will help pinpoint factors that stand in the way of a company achieving its vision and help identify initiatives the firm can take to achieve a breakthrough.

Seifert cited numerous advantages of a strategic plan, not the least of which is that a plan sets the structure for profitable growth. It also allows for an informed hiring process and creates confidence among stakeholders including insurance companies.

After a strategic plan has been developed, a financial plan can be drawn up. “The financial plan creates the matrix necessary to measure performance,” he explained.

Strategic marketing
Richard Look from Venture Insurance Programs in West Chester, Pennsylvania, offered advice on successful marketing including how to come up with a brand identity and how to position a firm as a leader.

The former advertising executive warned the agents, program managers and company executives that they can lose sight of their markets if they are only sales-driven, rather than marketing-driven.

Managing general agents regularly spend as much as 6 to 8 percent of their budgets on marketing and communications, according to Look, who maintained that carriers often do not realize MGAs spend this much on marketing. He urged program managers to seek outside professional help to maximize their marketing budgets and avoid the “tunnel-vision” that can come from relying upon an internal perspective. “If you’re keeping everything in-house, you don’t necessarily get the best strategists, best designs, best graphics, best programs, whereas if you outsource, you’re more inclined to,” he maintained.

He said it is possible to spread ad agency fees and outsourced providers over 12 months to make it easier to absorb.

Look discussed a strategic marketing process that includes analyzing market research data, identifying competitors and obstacles, defining a company’s stakeholders, and learning why customers do business with the company. Useful exercises include asking customers and internal employees for key words they think describe the company and trying to arrive at a single word that sums up the perception of the company.

Defining a brand
These steps can be key to uncovering a company’s brand, which Look defined as the key value or quality associated with a firm. “A brand is owned by the user,” Look stressed several times, explaining a brand as the promise that registers with customers when they hear or see the company’s name. A brand is the same regardless of the product or program being sold. “It’s all best in class— your brand goes over and across all of your various programs,” he added.

Branding, as Look defined it, answers the question, “who am I?”

Positioning, on the other hand, answers the question, “why am I?”

He urged marketers to answer this “why” question by positioning their companies as leaders in some way, even if an obvious leadership position such as the largest writer in a field is already taken. Leadership positioning can mean creating a new category or niche area within the market where the company can be identified as a leader, such as the knowledge leader in the field. Or, he suggested, a program manager can play off of the stance of the recognized market leader by contrasting itself with the leader, the way Pepsi made itself the soft drink for the younger generation and in the process painted Coke as an old idea.

When implementing marketing strategies, he stressed the importance of staying focused, consistent and honest in communicating a message. “Stick to it. Don’t change your message every six months,” he advised. “Changing your message too often suggests you don’t know who you are.” A well-designed and effective series of advertising and marketing materials need not be re-designed every season, he added, suggesting that good materials should last two years or even longer.

In terms of media selection, Look advised attendees to look into print media first, adding that being a leader means running full-page advertisements, not fractionals. He also highly recommended direct marketing via email. If done well, a web site can be a good way to impress clients and build credibility. He cited trade shows and public relations as other marketing options to consider.

Investment in technology
Another speaker, Greg Thompson of Thomco, sparked debate among attendees and vendors with his advice on technology, including his advice that various products from several independent vendors may be better than a single vendor’s package product with various modules.

“Get the best software within each category,” the program expert advised, claiming that in many cases they can be efficiently integrated to create an overall system.

Thompson, whose Kennesaw, Georgia agency manages eight programs and $120 million in premium, stressed the need to perform due diligence before investing in any technology. “Go out and talk to people and beware of the demo,” he said, warning that demonstrations represent a “controlled environment.”

He further advised agents not to wait for the perfect system before buying. After buying, Thompson recommended building a relationship with the vendor, even volunteering for the vendor’s agency advisory group.

He stressed the importance of training to get the most out of a system and he preached patience. “Improve your system incrementally,” he told attendees. “Slow is better than fast.”

Target Markets Program Administrators has scheduled its major meeting, the fourth Annual Program Summit that includes carriers, administrators and a vendor trade show, for October 18-20 in Tempe, Arizona.