Daily sales & marketing tips for insurance professionals

Most agents have no qualms about asking a client for a referral, but what about asking for a friendly Yelp? Depending on where you do business, the latter might be more lucrative.

Yelp.com is web site where people can post and read reviews of local businesses, from unruly dive bars to starched CPAs. Since starting in San Francisco and few years ago, the site has grown exponentially, gathering adherents in every major city in the country, and even one across the pond.

For whatever reason, Yelp emerged from the thicket of local-review web sites as the clear winner, and every day people invest millions of hours writing helpful, funny and cool reviews. Businesses, in turn, spend an increasing amount of time monitoring what people are saying, for both PR purposes and market research.

Because of the site’s popularity and the strong influence of social proof, a positive review from a credible Yelper can generate a tsunami of new business, and while the majority of reviews are of food and retail establishments, more and more people are writing about their experiences in the insurance and financial services realm.

So I recommend registering your agency with Yelp and encouraging your favorite clients to write a review.

Think about the possibility of being able to say this to a prospect: “I pride myself on my dedication to my clients; check out what people have said about my customer service on Yelp.”

That would be persuasive!

Insurance companies and lead generators like InsureMe have spent countless hours—years, actually—and truckloads of cash trying to secure a good position in the Google search results for terms like ‘car insurance’ and ‘insurance quotes.’

So, I’m here to burst your bubble: unless you’re willing to spend years and millions of dollars on the esoteric science/art/magic of SEO and paid search marketing, your web site isn’t going to show up on the first page of Google for terms like ‘insurance quotes.’ There’s just too much competition. The small agency doesn’t really have a chance.

But you should at least show up for your own name, and that’s where your Google Profile comes in. Your Google Profile takes minutes to set up, and it will help people find you in the search results. You can set up a public page for yourself or your agency and even add a link to your agency’s web site. I also recommend adding your agency’s physical address and contact information to Google Maps. This is especially important, as Google is increasingly incorporating local results even for  generic search terms. For example, you should be able to see your agency in the map results when you Google ‘insurance agency.’

The point is, don’t give up on Google merely because you’ll never rub elbows with Geico and Progressive atop the search listings. At a minimum, you want to make it easy for people to find you. After all, if someone takes the time and trouble to Google you, that person would certainly fall into the ‘hot prospect’ category, right?

You know the saying ‘it never hurts to ask’? Seth Godin recently blogged about this phrase and he added some caveats, namely that it does hurt to ask sometimes—that is, when you don’t have permission to.

Godin, a prolific writer and web entrepreneur, popularized the concept of ‘permission marketing,’ a revolutionary yet simple idea that holds that you need to get people’s permission before you can successfully market your services to them. Note the ‘successfully’ in the previous sentence. You can shill for your product or service to anyone on the street, anyone with an email account, telephone, television or front door, but you won’t be successful unless you establish a relationship first.

Godin’s conception of permission marketing isn’t some warm and fuzzy notion that requires you to sacrifice old-school effectiveness for new-school niceties. In fact, permission marketing is all about being more effective. It’s about being more precise and less indiscriminate. “Selling to people who actually want to hear from you is more effective than interrupting strangers who don’t,” says Godin. To give you an example, permission marketing is about trading the 2 percent response rate of direct mail for a 90 percent response rate among a highly targeted group that is willing to hear from you.

Permission can be built on something as simple as an introduction. It can be based on a gift. The point is, if you ask before you’ve earned it, you’ll hear a dial tone, or the digital equivalent—which is the sound of someone clicking the spam button.

Godin: “If you run into Elton John at the diner and say, ‘Hey Elton, will you sing at my daughter’s wedding?’ it hurts any chance you have to get on Elton John’s radar. You’ve just trained him to say no, you’ve taught him you’re both selfish and unrealistic.”

And what about insurance leads? Do you have permission to ask for the sale the minute the lead arrives in your email inbox? The good agents realize that while they’re dealing a targeted prospect, they do not quite have permission yet. A warm and professional introduction coupled with a demonstrated willingness to answer questions is usually all it takes to establish a permission-based relationship with a lead.

Still, deciding when to ask—knowing when you’ve secured permission—is a tricky thing that relies on intuition more than anything else.

Insurance scoring—insurers loooove it, and they think everyone else should heart it too. They insist that prices stay low because insurance scores (which include but are not limited to a person’s credit score) have an impressive knack for predicting risk.

But the public and state regulators need regular convincing, with fairness their primary concern. The NAIC recently convened a public hearing on insurance scoring, and industry representatives were forced, once again, to defend the practice, largely against a 2004 study conducted by the Missouri DOI.

The Missouri study revealed that the strongest predictors in a consumer’s insurance score were race and income, a fact which—rather understandably—created some hostility among the public and nervousness among policymakers.

The Insurance Information Institute (III) criticized the report when it came out in 2004, pointing out methodological errors that they said were the result of a pre-existing bias against the practice. Further, the III said, the Missouri department of insurance failed to acknowledge the benefits bestowed by insurance scoring: “The study’s opinions imply that the MDOI is prepared to eliminate the credit-related discounts currently offered by insurers to thousands of minority families living in Missouri as well as to homeowners and drivers throughout the state.”

Most states allow credit-based insurance scores, which is a fact commonly touted by insurance industry groups. (They’re less excited about mentioning that 48 states have laws putting certain restrictions on the practice.)

The faltering economy and tightening credit markets have sparked new criticism of insurance scoring. Critics predicted that the poor (whose ranks are swelling and whose credit scores have suffered) would be dealt another blow with worsening insurance scores and thus higher premiums.

“If insurance prices started to rise for no good reason, at a time when the public was least able to pay more, it would be a political, regulatory, and public relations disaster,” said Brian’s Sullivan’s May 18 Auto Insurance Report (print only, subscription required). “Insurers would be headed for a fierce beating, and worse, it would be well-deserved.”

Sullivan reports that while insurance scores are indeed dropping, they have not dropped as steeply nor been as volatile as credit scores, and that is good news for the insurance industry, because it means that insurance scores are calibrated well enough that they don’t simply mimic credit scores. (Many people falsely equate the two.)

Ultimately, though, the insurance scoring debate will probably stick around for a long time to come, with neither side landing a fatal blow against the other. Part of the reason is that the two sides approach the issue from radically different places. The insurance industry’s arguments, which center around efficacy, accuracy and low prices, don’t hold sway with opponents, who think that there is some larger issue of fairness at stake.

Finally, someone is putting some heat on doctors, who, just like mortgage lenders and AIG execs and the rest of us, are sometimes motivated by greed:

Somewhere in the United States at this moment, a patient with chest pain, or a tumor, or a cough is seeing a doctor. And the damning question we have to ask is whether the doctor is set up to meet the needs of the patient, first and foremost, or to maximize revenue.

There is no insurance system that will make the two aims match perfectly. But having a system that does so much to misalign them has proved disastrous. As economists have often pointed out, we pay doctors for quantity, not quality. As they point out less often, we also pay them as individuals, rather than as members of a team working together for their patients. Both practices have made for serious problems.

That passage is from Atul Gawande’s article in the New Yorker, and his words are sure to earn him a few enemies in the ranks of the American Medical Association. Let’s hope Obama and health secretary Katherine Sebelius read it.

Gawande, a practicing surgeon and award-winning author,  visited a small border town in Texas that has the highest per capita health care spending in the country. He wanted to understand why this town was spending so much for care yet not actually delivering better health outcomes.

Doctors in McAllen, Texas, it seems, are a uniquely enterprising bunch, and they “treat patients the way subprime-mortgage lenders treated home buyers: as profit centers.”

Gawande isn’t the first to put the screws to doctors, but his article is perhaps one of the most unflattering portraits of the medical profession to date. We tend to idolize doctors and assume they operate solely with our best interests in mind. While most do, a few have let the profit motive take center stage.

If we’re to adequately reform our health care system, Gawande writes, we must address the issue of doctor compensation—specifically, we must develop a payment structure that rewards quality, not just quantity:

Activists and policymakers spend an inordinate amount of time arguing about whether the solution to high medical costs is to have government or private insurance companies write the checks … When it comes to making care better and cheaper, changing who pays the doctor will make no more difference than changing who pays the electrician. The lesson of the high-quality, low-cost communities is that someone has to be accountable for the totality of care. Otherwise, you get a system that has no brakes. You get McAllen.

Read the complete article.

Writing for the New Yorker, economist James Surowiecki notes that the FIRE economy–which stands for finance, insurance, and real estate–shrank for the first time in 16 years. “Since 1980, this sector’s share of the economy has grown by almost half. Now, apparently, the worm has turned,” says Surowiecki.

Looking at credit default swaps and mortgage-backed securities, it’s easy to understand how and why the finance and real estate markets are shrinking. And the insurance industry, of course, is so interconnected with those two that it was only a matter of time before it started to feel the pain as well, even if it wasn’t as reckless as its siblings in the banking and property sectors.

Surowiecki looks back at the last 10-20 year period as the “financialization” of our domestic economy, when Wall Street became an economic driver in its own right, as opposed to a follower. And that’s where things went wrong.

“Wall Street needs to recognize that its proper role is, as it has been in the past, to follow the real economy, rather than trying to drive it,” says Surowiecki. ” During the housing bubble, the financial sector essentially tried to create reality. Now’s the time for it to respond to reality instead.”

Maybe it’s because I’m a little sleep deprived, but this short video, with its upbeat message and inspiring piano track, made me a little misty. (Grasshopper, a telecommunications company, put it together.)

It made me lot more optimistic about our country’s future. It reminded me of why our country is so great: we have an indomitable entrepreneurial spirit, a restless drive to innovate. It’s an impulse that begins in childhood and if it’s nurtured properly, extends into adulthood.

Fear and inertia can dull this creative impulse, but we need only look back to our youthful desire to create to get it back.

Hat tip: Robin

ComScore released its annual report on online insurance shopping last month. The company presented its findings at the Auto Insurance Report 2009, sponsored by Risk Information, Inc.

A whopping 32 million consumers used the Internet to submit a quote request for auto insurance last year, which was about the same number as the previous year. In the years before, comScore reported the growth rate of quote requests increasing about 15 percent annually.

Last year, of course, was a different kind of year. But even in this economic retraction era, seven percent more people purchased auto insurance online than the previous year.

And there are millions using the Internet to start researching insurance before they request a quote. According to Google, in April the keyword ‘auto insurance’ was used as a search word 30 million times. ‘Auto insurance quote’ and ‘auto insurance quotes’ were shown to comprise another 6 million or so searches.

These statistics fluctuate and aren’t 100 percent accurate; but suffice it to say, there are a huge number of potentially interested consumers checking out insurance through the search engines.

Of course, with the growing number of consumers online, there is a growing (exploding) number of insurance marketers online. If a consumer enters the search term ‘auto insurance’ in Google, there are over 90 million matches (links to Web pages).

So in essence, there are 90 million sources of information for people researching insurance offerings (98 million for ‘car insurance’). The search engines list those 90 million links in a particular order, based on a number of (secret) criteria; but you can imagine it takes a lot of marketing savvy to rank in the first couple of page results. Most consumers don’t venture much past the first few listings.

The Internet has become congested with information—so much so that it is very difficult for consumers to find what they are looking for. But it is even worse for small businesses—and insurance agents—to try and be noticed when there are so many distractions.

But watch out for someone who promises guaranteed results: no one can guarantee anything with search engines, and there are plenty of shysters taking people for a ride when it comes to Internet marketing services.

Internet insurance shopping: friend or foe? The verdict is still out.

We invite every consumer who goes through our quote application to fill out a survey. We send the survey invitation two weeks after they’ve been matched to agents on our network.

Most are happy with their experience, but there are always people who had a really bad experience and use the survey as an opportunity TO SHOUT AT US IN ALL CAPS and use the exclamation point with furious abandon.

A common complaint among the disgruntled is that they never got called or that they were contacted once and never again. Some even contacted agents only to be snubbed!

I called the agent , left a message and never heard from him after that…

Your site was awful. I got one contact and I had to call hime - a Mr. Furgeson from a co I don’t remember. I called him twice and have never heard back from him. He sounded like an idiot. I don’t know how you get the ins agents but your site is an utter failure

I did receive several quotes from different company. But the one I am most intersted in did not actively follow up. I left several voice message,but never got response. I ended up calling directly the company he represents and had it done right away.

Only received 1 acknowledgement from State Farm that they were working on my quote, but never received quote even after I sent them a 2nd request a week later. The other 2 matches never contacted me.

I never had a response from anyone.

I never got an answer!!!!!!!!!!

Two agents called but never followed up with a quote for property insurance.

This is rather astounding, isn’t it? Agents pay us for leads. Why on earth would an agent pay for a lead only to never call the person or, even more bizarre, ignore their calls? It boggles the mind.

But I don’t want to go out on a sour note. There are always plentiful comments that point to excellent and attentive customer service.

The woman who handled my request by phone was knowledgeable and informed. She was competent and courteous. I found great insurance coverage for almost half what I was paying with Nationwide. Thanks.

The response was above my expectations. Every one I spoke to offered me their insurance but gave me suggestions and support, thank you

Agent, I believe her first name is Jody was very helpful. Very professional. Great follow up to my questions.

The Consumerist reports that one unlucky person received 16 State Farm mailers in one month.

The recipient of the unwanted advances, a guy named Terry, contacted an agent listed in one of the letters in an attempt to stop the deluge. The agent replied that the mailers came from corporate and there was nothing he could do to stop the onslaught.

So Terry sent a pleading email to corporate. He received this response, which is both helpful and sort of depressing at the same time:

Dear Terry,
Thank you for contacting State Farm regarding our Privacy Policy. No, but there are ways you can reduce the number of solicitations you receive from companies with whom you do not have a customer relationship if they are members of the Direct Marketing Association. You can write to the following addresses: • For marketing solicitations received by mail, write to: Mail Preference Service, c/o Direct Marketing Association, PO Box 9008, Farmingdale, NY 11735-9008. • For marketing solicitations received by telephone, write to: Telephone Preference Service, c/o Direct Marketing Association, PO Box 9014, Farmingdale, NY 11735-9014. You may also contact specific companies and ask that they do not contact you either through direct mail or telephone solicitations. This will not stop calls relating to your existing relationship with the company. Certain states may have state-run programs whereby individuals can be placed on a “do-not-call” list to avoid marketing calls from businesses with whom they do not have an existing relationship. Your state will provide details on how to be placed on such a list. The Privacy Policy can be viewed online at If you have further questions regarding the State Farm Privacy Policy or would like to indicate your do not share preference, please call the State Farm Privacy Information Line at 800-865-6035.

State Farm Insurance®
Internet Support Representative

On one hand, State Farm producers ought to be happy that corporate is spending big bucks in an attempt to generate new business. On the other, these producers ought to demand that those big bucks be spent in a better way. [On, say, internet leads from InsureMe—where consumers are already looking for insurance.]

Despite a mixed track record at best, direct mail continues to litter mailboxes and annoy recipients. Scanning the comments to the Consumerist article, I learned that some people are so irritated by junk mail that they use return envelopes to send candy wrappers back to the soliciting company. Another commenter says he turns junk mail into ‘fireplace logs.’

That’s where your advertising dollars are going, State Farm. Right into Blueskylaw’s fireplace.