I hear a lot of agency principals talking about hunkering down, waiting for the storm to pass, coming out when the coast is clear. I get it. All of these colloquialisms point one thing…It’s really tough out there right now. Between the interminable soft market and the volatile economy premium leakage is between 25% and 40% and when you throw in a dash of normal attrition you can see it will require some strategic realignment of your overall business strategy just to stay even.
As most of you know we do a variety of all-things-marketing for the insurance industry including insurance telemarketing for about 2,000 insurance agencies (200-250 live campaigns at any given time) but at the end of the day, we are classified as a small business just as most of you are. So, I thought sharing some of our strategy and updated metrics with you might be useful to some of you. In terms of strategy, the first thing we did was cut ALL unnecessary expenses, eliminate non-critical personnel, lowered our prices by 30% so our clients could continue to use our services, and implemented a temporary 10%, across the board, pay cut. I am grateful to have some of the best employees in the world. The pay cut strategy allowed us to keep more people employed versus the alternative of laying off individuals to achieve the same budget objectives. If this sounds like hunkering down that’s because it is. Or at least it would be if that was the end of the story.
In the middle of 2009 we decided to make a significant investment in two new web sites and change, or enhance the business models for two of our primary services. Programbusiness.com is up and running as of last week and NMSDATA will be Neilson Marketing Services on August 1st. We unveiling a new insurance marketing service called Agency Tsunami which is an all-encompassing Internet marketing system. Insurance telemarketing is still a key part of our business, however we needed to add additional marketing services involving Internet technology that would compliment our legacy marketing services. This increases our ability to grow even in a down economy.
We also evaluated our sales staff and kept the people who were generating profitable revenue. With a reliable sales team in place we started investing in lead generation using Google Ad Words and telemarketing. So, if hunkering down means myopically cutting expenses without a new strategy for generating revenue to offset leakage, then now is NOT the time to hunker down. Is the strategy working? We are on target to restore the 10% pay cuts October 1st and our business is starting to grow again. It’s working. I hope this helps. Let me know what you’re doing to grow in this market.