All insurance agencies have client relationships that can be mapped on a spectrum somewhere between transactional and connection based. When a new agency starts, they tend to be in customer acquisition mode, and they need to lay down new customers as quickly as they can, and so transactions are king. As agencies mature though, they tend to move toward a more sustainable growth model that reduces churn and creates more repeat business, more referral business, and more a high margin business.
Well, sustainable growth is based on building deep connections, not based on transactions. This is important because the future of the insurance agency is unquestionably moving toward, depending more on deep client relationships and less and less on commodity transactions and technology is already starting to change the way that consumers purchase insurance, just like it’s changed the way they purchase things in every other industry.
Well, here’s the thing, it’s not time to panic, it’s time to start to pivot and pivoting means starting to invest in the strength of your book. It means as an agency, changing over the next two or three years to a model that depends more on deep connections with your clientele. You don’t have to change everything today, but you do have to commit that over the next two to three years you’re going to start building relationships that will help you move to that sustainable growth model.
So this is something that we should always be thinking about as an insurance agency leaders, right? How do we pivot to a higher purpose and greater value?