Death of the old school agency

©2018, Michael Jans Advisory
The Death of the Old School Agency
The Rise of the New Marketing Masters.
State of the Industry
The Independent Insurance Agency - 2018: The Watershed Year for Independent Agents

Is the world changing too fast 
for the independent insurance agency?

4%
96%
96% of agents said, 'YES!'
YES! 
it is

‘But, it’s not my dad’s industry either.’
‘It’s not my dad’s insurance agency anymore.’

And two more to watch out for
4 Trends that are Forcing Dramatic Change NOW!
#
1 #
2 #
3 #
4
#
5 #
6

Competition
Changes in...
Technology
Consumer
behavior
Speed of
change

First 
a word 
of caution

Beware of the 'shiny new thing' gurus shouting 'do this, 'do that’.

Tricks, techniques, and tactics will not save this channel 
(or your agency).

‘Tricks are for kids'

Aligns all the 'tricks, techniques and tactics'
STRATEGY

Blockbuster CEO
Jim Keyes: 2008
Netﬂix is 'not even on our
radar' as a competitor.“

lesson 1
Be aware of major TRENDS & FORCES
So you know what to do and when to do it.

Respond with STRATEGY, not TACTICS
lesson 2

So you can align your entire agency - 
team, technology, business process - in the direction of success.
Tactics would not have saved Blockbuster, 
more stores, more movies, more discounts, more advertising.
lesson 2

Won with STRATEGY

Richard Rumelt
Author,“Good Strategy, Bad Strategy”
‘Good strategy works by focusing
energy and resources on one, or 
a very few, pivotal objectives
whose accomplishment will 
lead to a cascade of favorable
outcomes.’
“

...what is that direction?!
But, if STRATEGY means your gambling the pot on one direction...

Carriers who 
are wondering
if they should 
'go direct'
Let's examine the 4 trends
that are inﬂuencing…
Customers and
prospects
Competitive
channels
Most
aggressive
competitors
…Your …Your …Your…The

Trend
#
1

The accelerated digitization of the connected
economy, including its impact on consumer
behavior, competition and existing players.
#
1

IT'S A CONNECTED WORLD

81% of consumers research
online before shopping.
19%
81%

88% trust online reviews as
much as they trust the
recommendations of friends 
or family.
12%
88%

65% read between 4 and 52
or more reviews before
making purchasing decisions.
35%
65%

98.4% of consumers check
their email at least once 
per day.
2%
98.4%

39% check their email
between 10 times and
‘throughout the day’.
61%
39%
10+

The average consumer actively
uses their smartphone 145
minutes per day.

They’ll consume or deliver information on their
smartphone 76 times per day.
– with a stunning 2617 discrete
swipes, clicks and taps.

79% of American adult
internet users, use Facebook.
21%
79%

Baby boomers are online
more than millennials.
At an average of 15 hours per week, 
with more recent research estimating that the average US
adult spends 87 hours per month, browsing on their
smartphone alone.

What's the best STRATEGIC RESPONSE?

Not just willy-nilly 
'digital marketing'
Digital marketing is not a strategy…
it’s a technique, that must be nested
within a marketing strategy…
…that is nested within
a corporate strategy
Corporate
Marketing
Digital
Marketing
Strategy
Strategy

Don't jump on
Facebook or
LinkedIn and say,
'We can save you
money!'
Resents-
'interruption
advertising'
Today’s Consumer
'We've been
around since
1937' 
or‘trust, service,
integrity'.
Ignores- 
'platitude
marketing'
Doesn’t- 
'want to be
chased’…
…they want to be
attracted.

Connect with meaning… 
By delivering- an ongoing stream of genuine value, above 
and beyond the sale of the product.
They want you to:
1
Connect with delight… 
By connecting as humans, both in the oﬄine agency culture 
and behavior and through masterful use of online content.
2

BUT…
Deloitte:
60% of consumers see no
value in their agent beyond
purchasing a policy.
40%
60%

Deliver
Meaning
Deliver Delight
Be an Ongoing
and Positive
Presence
You must use 
ConnectedTechnologies 
to…

Make you a publisher.
Can help you guide your customers from:
These very technologies that consumers love, (and also threaten
the agency channel) are the same technologies that:
1
2
and every other kind of communication in between, - automatically!
New lead New customer Open claim Closed claim Account renewal

“But”… says the commercial lines producer… 
“We physically see our clients four times a year.”
You can deliver ongoing value in a non-threatening, non-
intrusive (and inﬁnitely scalable) way with modern technology.
Leaving them 361 days where they get no value?

Analyzed their fastest growing agencies,  
- growth at 26-83% 
‘More and more of them are hiring marketers.’
The advanced marketer will create original content targeted
precisely to their audience.

Claudia McClain:
‘We communicate with our
customers 20-24 times a year'
96.1% retention 2.3 policies per customer
“

It's not just about the technology… 
it’s about what and how you say it.

Steve Jobs:
...technology alone 
is not enough.
It's technology married with
liberal arts, married with
humanities, that yields us the
results that make our heart sing.'
“

Trend
#
2

#
2 The progressive and impending rise
of competitive insurance channels.

A long, 
long time ago… 
We were the distribution
system for insurance. As the
economy grew, 
so did competitive 
channels.

Like the‘direct channel’, 
15 minutes can save you 15% or more…

And now, the emerging 'digital channel'
https://www.mckinsey.com/industries/ﬁnancial-services/our-insights/insurtech-the-threat-that-inspires

81% of insurance carrier executives 
see between 1 and 80% of revenue at risk from insurtech:
PWC https://www.pwc.es/es/publicaciones/seguros/ﬁntech-seguros-junio-2017%20.pdf
Percentage of revenues at risk to InsurTech companies

45% partner with insurtech. 55%
45%

94% prioritize better risk insights
and 
better customer engagement.
6%
94%

86% of insurance
consumers are 
‘not very’ satisﬁed with
communications from 
their provider.
14%
86%

No wonder:
44% report remembering 
-zero- communications
from their insurance
provider in the 
last 18 months.
56%
44%
in a Year and a Half
0

https://www.cbinsights.com/blog/2016-insurance-tech-funding/

? ? ?
Price Convenience Peace 
of Mind
1 2 3
Three values compel insurance purchase:
Digital Direct Agent
Three Major Channels:

Price Convenience
Peace 
of Mind
1 2 3
Three values compel insurance purchase:
Digital Direct Agent

© 2018, Michael Jans Advisory, LLC
The Big Lesson:
High LoyaltyLow Loyalty Mid Loyalty
LifetimeValue
Clients
7 times the
Value
3 times the
Value

High loyaltyMid loyaltyLow loyalty
Retention 74% 88% 97%
Value on 
$5mil/10yrs.
$18mm $30mm $44mm
1-6 7-8 9-10

Share of insurance wallet: 10% more
81%
84%
86%
88%
Low Loyalty High Loyalty
80%
88%

Likelihood to buy more from same provider:
5.9 times greater
15%
30%
45%
60%
9%
53%

Amount of insurance purchased: 25% more
0%
33%
65%
98%
130%
1.25
1

Number of referrals:
250% more likely than neutral clients
0%
75%
150%
225%
300%
2.5
1
0
Low Loyalty Mid Loyalty High Loyalty

Highly Loyal
Insurance Client
Refers 
2.5

Don't copy cat!
Strategy works for a channel, 
because it's designed for that channel.
Period.

20%
13%
24%
43%
1st 2nd 3rd 4th & 5th
Which quote gets approved by the consumer?
EZLynx. Brady Polansky presentation to ACT. February, 2015.
Don’t sell on price.

53%
45%
37%
19%
2nd 3rd 4th 5th
How much higher are subsequent quotes?
EZLynx. Brady Polansky presentation to ACT. February, 2015.

Build on your strength. 
Real people, in real communities.

RE
TAIN
OPTIMIZE
CON
VERT
ATT
RACT
Customer  
Lifetime 
Value
ONGOING
DE
LIGHT
VALUE

Focus most resources on the
deep end of the pool;
Optimization and Retention.
Including REFERRALS
RE
TAIN
OPT
IMIZE
CON
VERT
ATT
RACT
Customer  
Lifetime 
Value
ONGOING
DE
LIGHT
VALUE

Focus the front end on attracting
the‘right kind of customer’,
and relentlessly training and
monitoring your team to convert
at a high percentage.
RE
TAIN
OPT
IMIZE
CON
VERT
ATT
RACT
Customer  
Lifetime 
Value
ONGOING
DE
LIGHT
VALUE

Use technology to guide customers toward loyalty.
The end product of an insurance agency is not a 'policy sold’,
It'sa'LOYALCUSTOMER’!

Trend
#
3

#
3
The rise of the powerful – and diﬀerent –
millennial generation, becoming both the
largest consumer class and supplier of 
agency employees.

Average agency principal 
with 20% or more equity, 
is 55 years old.
At 17%, 
the average age is 66.

25% of insurance workers will
be retirement-ready, 
in (or before) 2018.
McKinsey
75%
25%
Right
NOW

The millennial generation, 
– at roughly 20-36 years old – 
is the largest generation in North America. 
83 million.
Contrast:

Truth:
The millennial generation is
the most loyal generation to
their favorite brands.
Myth:
‘Millennials only
care about price.’

With over 60% claiming they are
‘often’or‘always’ 
loyal to their favorite brands.
40%
60%

But millennials 
force brands to raise their game 
on values of:
Trust Connectedness Authenticity

They will research you, and look at your review.

87% of millennials use two or three tech devices every day

30% use tech devices 
four or more times per day.
70%
30%

43.5% report spreading the word about products and services 
to their online networks.
They will talk about you
57%
43.5%

93% claim they rely on 
‘blogs and online reviews’ 
to inﬂuence their purchase.
7%
93%

33% say they rely 
‘mostly on blogs‘ 
before they make a purchase. 67%
33%

They research online but…
[cite source]
'A majority of millennials make
most purchases oﬄine’.

'Old School' advertising won't work

Only 1% of millennials said that 
‘a compelling advertisement‘ 
would make them trust a 
brand more.
99%
1%

75% say that it’s either 
‘fairly or very important’ 
that a company gives 
back to society.
25% 75%

They want to be close to you…
…and vice versa

62% say that if a brand engages
with them on social media, it will
enhance their loyalty.
38%
62%

This is not tomorrow.
This is TODAY!

Demand for 'authenticity' and‘connectedness'
pushes agents past the 
'commodity broker' - selling price.

Eﬀective use of 
'ConnectingTechnologies' 
kills two birds:
Engages the millennial. (and all consumers.)
Supports the work environment that the millennial demands.
1
2

Trend
#
4

#
4
4%
96%Speed!
The accelerating rate of change 
in business and industry itself.

"There are 40,000 agencies in the US.
You could absolutely see them
shrinking by a quarter."
Ellen Carney
Principal Analyst, Forrester
New York Times, 2015
“

‘If the rate of change on the outside
exceeds the rate of change on the
inside, then the end is near.’
Jack Welch,
Former CEO,
General Electric
“

Possible Responses
Complacency
Ignore 
and get hurt
Anxiety
Spread fear
and get hurt
3
Urgency
Take action
now

Stop being a mere‘pass-through’,
- Take responsibility for the 'Customer Experience'
1

The end product is not a 'policy sold.’ 
It's a Loyal Customer.
Change the objective2

The conversation is the culture, from staﬀ meetings
to the water cooler, 'customer experience'.
Align culture behind a
'Customer-Focused Strategy'
Obsess: Policy per customer count, retention.
3

Multi-generational and merged agencies
often have sloppy organization and design.
Align organizational structure4

Budget goals, objectives, reports, and accountability.
Establish organization goal-setting discipline5

Leadership scales.
Personal production does not.
Leaders need to lead6

Practice accelerated learning, for leadership, and team.
Learning = Staying alive7

2 MoreTrends
#
6#
5

Vigilance required

10 years
Average number
of acquisitions
317
201720162015
510457492
Past
#
5 Massive inﬂux of Private Equity
Based on 6 months

External
Agency
Valuations 20091.79X
20162.4X
Valuations UP!

...lacking strategic vision, company
after company has had no better idea
than to buy up its rivals. The
companies left standing are often
those that outlasted others, not
companies with real advantage'
Michael Porter
“
Bigger not inherently better
(but...when they do..!)

#
6
When IoT, driverless cars, etc. reduce risk 
and/or transfer it from agents to carriers.
The emergence of new technologies, 
along with the potentially massive
transfer of risk.

Conclusion:

Because of THIS… do THAT
Strategy is hard to do…  
hard to execute…  
but simple in nature:

The beneﬁts:
Every task aligned.
Every team member aligned.
Resources are focused where they get the most results.
‘The focusing of energy and resources on one, or a very few, 
pivotal objectives, whose accomplishment will lead to a cascade 
offavorableoutcomes.'

Today's consumer is connected…
Because…
…be connected.

Because…
Competitors are consuming the convenience and price markets…
…deliver peace-of-mind for 
Maximum Customer Lifetime Value.
(and because Loyal Customers will reward you 7X)

Because…
The massive millennial market demands that you connect
with authenticity and transparency…
…connect with meaning and
delight.

Because…
The rate of change is accelerating…
…act now!

In other words:

Use modern technology to connect, with
meaning and delight - and do it fast.

The Occam's Razor of strategy for the agency channel:
‘The money's in
the relationship'

Free Copy
Action Guide
Email me:
michael@agencyrevolution.com
Subj: ebook

Death of the old school agency

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