Michael: Hello everybody this is Michael Jans with agency revolution. We make it easy to automate your systems engage your customers and grow your agency or brokerage. I want to welcome you to this episode of the connected insurance podcast where we examine the trends innovations challenges and solutions to the biggest problems facing retail agents and brokers today.
I’m really excited to be able to introduce you to Peter van Aartrijk, Peter is I would say in our industry the person I would go to if I needed to understand press, if I needed to reach press, if I needed to make a public position public. He’s also the person that I recommend to my own clients if they are in particular really focusing on branding as a differentiation of the marketplace. I think is a very deep profound understanding of what agencies and brokerages need to do today to stand out from the crowd.
Thrilled to be able to introduce you to Peter van Aartrijk, he’s the co-founder of Chromium a San Francisco-based brand strategy firm with specialty in insurance and financial services. He started his career as a newspaper reporter where he really learned to question the status quo. I think that you’ll find that throughout Peter’s career that is exactly what he’s done and he continues to do that today.
Without further ado, want to introduce you to my good friend Peter van Aartrijk. Well, Peter thank you so much for joining us. I’m thrilled to hear some of the things that you have to say. You’ve been a long time participant and leader in this industry but also an advocate for the agent and broker.
I want to hear what you have to say about some of the fairly dramatic level of change and the trends and forces that the agent of today is facing. In the past, you’ve talked about the importance of a relevant organization. It’s interesting that you say that I remember reading a couple of years ago that Howard Schultz the CEO and chairman of the board of Starbucks said, that’s my biggest challenge is staying relevant to my consumer.
I thought wow, sometimes you look at a company that’s that big and you think all their problems are solved but basically what he was saying was that his consumers are changing their demands and their expectations are changing.They constantly have to adjust to stay relevant to their consumer. What are your thoughts, what’s got you going on this issue of relevancy between the agent community and today’s consumer?
Peter: Well, I want to say when we talk about relevance we’re talking equally about the customer flash prospect and the employee. One of the amazing things to me is that amazon paid $1.2 billion for a mail order shoe company in the middle of nowhere, Nevada, Zappos. Not just because it’s a mail order shoe company that sells shoes at low-cost shoes and you get them in the mail but the culture which is incredibly strong and it’s powerful.
I think when agencies look at their next phase the next three to five years they need to not just be relevant to the customer prospect which is a whole potential warns on how that happened, but also to the future workforce. It’s not it now just to be a place that people have to go to work and get a paycheck if they have to be a place where people want to go to work. That takes a lot of effort but I think the agencies that are already there have that environment where people are excited about being there and think about that.
You’re in the insurance industry it’s a place you want to go to you’re excited about it. You are your employee manual is not a big thing talk about what to wear, when they come in when to leave. It’s maybe five or six real core values that say exciting things about challenge the status quo where they’re empowered to do their jobs.
Michael: Peter I’m going to ask you a question which to some extent demonstrates my own bias. Do you see as younger people come into or consider coming into an insurance agency or assurance brokerage. One of the images that I think none of us would be comfortable with would be for some young enthusiastic excited and technologically connected person, to walk into the, unfortunately, average agency of today and to look around the shop and maybe come to the conclusion that this is not the place for me. Have you seen a difference between these relevant agencies and the ones who are less relevant today in regards to the kind of technology they adopt in their approach and embrace of technology?
Peter: Oh goodness. I give it the nail on the head. I want to start a new TV show called Extreme Agency Makeover [laughs] where is just a fun with somebody like home depot and somebody to give us money to go in and just want to blow the place up. You can’t say that today but just makes the place so much more appealing to work at on the days that are in the office which is another issue but also yes with technology.
Absolutely right, Michael, we can’t be using 1980s technology anymore it’s just not going to cut it with young people. I heard an agency told me recently they went to the cloud and the new cloud provider of their management system said they can have dual monitors something crazy like that. Now the officers single monitor can you imagine most see as far as best practices of agencies have free monitors, but that’s really just a given today.
I think the software that we’re using needs to go from just an electronic file cabinet to something that is much more integrated with marketing because there’s no more sales funnel. The sales funnel it’s really more like a colander with prospects and customers who want to give you referrals outside of this funnel or colander talking about you an average of 17 times before a producer even hears about this process.
Somebody, they should go after 17 times Michael. They’re going to the website they’re looking to social media or the lack thereof. They’re talking to people they’re looking at a blog hopefully they’re hearing from other people. You’ve got to be in that community and managing the way to do that is with technology that is modern. Yes from the culture standpoint which is equally as important as brand the culture, the employee the new employee standpoint they walk in. They want to see something very modern and modern doesn’t have to be expensive. Modern just have to be modern.
The tools that they’re used to using not just word and databases a customer list and things but real stuff that really works to attract this new generation of customer which is a whole another challenge given the disruptors that are coming into our industry. In the last 12 months alone there’s been $2 billion of venture capital money poured into 1,100 startups.
Some of these so-called some of these are like peer to peer which if you’ll recall Michael back in the 80s we had these risk retention groups and with person groups and regional purchasing groups. There was a shared concept which is still around today but what’s new is the wrapper the way they look. They don’t look insurance blue boring colors. There are new things that people say “oh, insurance can be different” but we’ve always offered this shared underwriting concept, but now with this venture capital money coming in disrupting in some cases the agent entirely, but in other cases empowering the agent.
I think the agency owners would be wise to spend some time learning about what’s going on. Understanding how to create an environment where people have a why, like why do I go to work. Way more important than what I do there, how I do my job but why I’m even working in the first place. A good place to start and to wrap that up would be Simon Synnex start with why you can google and as Ted talks, but it’s incredibly powerful. If you don’t have a why, why people should go to work, and why we’re doing what we’re doing here in the agency, then it’s pointless in terms of building a strong culture.
Michael: Peter that’s a great segue to my next question which is what do you think agents independent agents and brokers and even carriers need to do to stay relevant in today’s world?
Peter: Okay, well, there’s a number of things but I can sum them up by saying there are several that are most important. There’s an issue of leadership in the independent agent channel that’s lacking most actually carriers as well as agents, but agents and brokers lack what I call transformational leadership. There’s a lot of transactional leadership by numbers things like that, which is important in this industry that’s concerned with technical things and underwriting an actuary or legal and all those things.
You need people who can look at the numbers but you need also people to talk about vision. Where are we going in the future with this forum where are you CSR are headed in the future? If you do a great job in service you can eventually be in sales, if you want to be and transforming those careers. But also talking about a vision for a better world that you’re creating in the agency for your customers because people want to work at a place where that’s going somewhere that’s not static, and so transformational leaders are always looking at improvement. They’re willing to shake things up. They see change as dynamic and as an opportunity not as a threat.
They’re obsessed with building culture that drives a customer employee happiness, and they listen to people and allow them an ability to grow and they inspire people. We’re seeing inspiration. This is a great industry but we’re so concerned about technical things all the time. The customer doesn’t care about that, they know it’s important but they want to know why they should place their business with you, why they should cut a cheque to you. That you care about them. I know it sounds so painfully obvious, but we’ve got to get away from this stuff and talk more about the emotional thing around this that we do. That’s leadership.
The second one is an understanding of culture. Status quo thinkers struggle to retain and attract talent Michael, because they’re losing those people to brands that are more innovative as opposed to status quo thinkers, where it’s more prestigious to work there. One of the problems that I know agency owners have is that they’re always talking about “convince me why you should work here.” I think a bigger part of this job in terms of attracting and building a strong culture is you the agency owner convincing the prospective employee why they should work, why they should come there. Why? My pace is a great place to work.
Why training is so important around here, why we’re painting a picture for the future. Have a great story and also have the staff be able to tell that same story. Because if a staff has a list of values that they’re running down– attract they’re running down. It doesn’t have to be again those heavy rules that one that come in one that leave. But more about how we behave as a company or like I said challenging the status quo means in meetings I can raise my hand and not get fired for asking a dumb question about a producer who does some status quo thing that we’re trying to change.
Building a strong culture which is branding on the inside if you will, it’s the third one– is the second one sorry. The third one I really touched on as engagement and realizing that the world is changed it’s not one-way marketing anymore. It’s not about who can shout the loudest. It’s about engaging your community and with the technology tools available now Michael, it’s so easy for people to line that community be in that community and show your people in the agency and the community and leverage that. Don’t worry about the insurance stuff all the time worry about how you care about people and how you care about the community.
Those are the main things that I would say separates relevant brands from other relevant brands. This is not just Growth measurements of that thing Michael, It’s also real cost. Because if somebody’s a valued employee you were to leave your firm and it costs three times their annual salary to replace them in terms of lost opportunity and just finding somebody that can take their place. Keeping good employees is incredibly important.
Michael: I’m going to summarize what you said because I’m taking notes here Peter. Number one is leadership. Number two building a culture that has a strong reason why and a passion behind that reason why. Number three is engagement between the agency and the community itself, right?
Michael: Okay, all right, let me ask you another question I’m kind of circle back here a little bit. You had mentioned earlier that the agents who are not adopting or not adapting to the change, they’re probably going to wake up to a pretty dark situation.
Is your sense that? Are you more optimistic? Or do you see more and more agencies willing to embrace the technologies and the strategies of today? Do you feel like we’re moving in the right direction as a channel?
Peter: I wish I could prove that because most of what I see is anecdotal. But I feel like several different things going on. One is just the relentless aggregation that’s occurring, not just mergers and acquisitions. But also this clustering and even informally on a regional basis regions ganging together, and when they do that I think they’re forced to have more modern technology, That’s a good thing, but it’s one of those kicking and screaming things that’s going on.
The agencies that are merging are being bought, or unfortunately a lot of times it’s a division of weakness. There are some that are that are being purchased that were from a position of strength, and I think what Marsh has done buying the large regional brokers, large regionally agencies for example that we have a really strong agencies that’s being purchased by a Marsh. But there’s others doing the same thing.
The other thing though Michael the third thing I see is well, there’s a whole bunch of them that are just not going to be around. Let’s just call it what it is, because they’re not making any changes and maybe they want to, they know they have an issue and they don’t really want to deal with it, They just want to ride this out for the next 10-15 years and they probably will. There’ll be a declining book, there’ll declining staff. But it’s a free country and that’s what’ll happen. I don’t know how many of the total number of agencies will fall into that camp but that will happen.
But what I am saying and I run into them at trade shows is this younger owner, at least younger produce who are doing things in a new way and it’s really pretty exciting. Some of them even have some investments on the outside to do things in a new way and they don’t care about the way things have always been done on the independent nature channel. They are doing things in a new way. Because you and I both know it’s a great model the independent agent channel from the customer perspective also from the employee perspective it’s a great model.
Why not find a way to make it more efficient, but also with efficiency comes not just fewer people doing more things, but more transactions but also frees you up to do the things that customers really want. Which is not so much insurance, it’s more risk management and caring about those life events not just birthdays but, I when I get married, when I have a child, when I buy a house, when I cohabitate, when I buy a new car, all these life events are meaningful things in people’s lives that are often missed by age and I saw somewhere that one out of four agencies don’t know, That there is a useful driver being added or don’t communicate around it. Useful drivers Is just the top reason customers defect from an agency because guess what, its rate shock.
But if you’re educating them prior to that and walking through some options, your chances of keeping that customer grow dramatically. I think it’s a efficiency with this new tools, such as a marketing system but it’s also doing things that make more sense for the customer and also make your staff happy because they are really truly helping people through this stuff. Whether a personalized customer commercialized customer.
Michael: Peter you know that we have conversations with hundreds of agencies and brokerages every single week. Our sense and again this is a little bit anecdotal. Our sense is that at least for those who we speak it’s easier to engage in meaningful conversations about technology, it’s easier to engage in meaningful conversations about connecting more deeply with customers and delivering ongoing value.At least it’s our hope that those that the industry is beginning to wake up to recognize that the consumers changed. And to wake up to the fact that there are ways and tools and technologies that can make those connections happen for them.
There may be thousands of agencies out there that just don’t want that conversation. I’m not as optimistic as you are that they can actually survive 10 or 15 years. Well, I think they’ll be hurt. Unfortunately, when change happens, it happens. We can wish that “Gosh, I hope my boat never tips over” but if the storm is bad enough it’s going to tip over. I’m not optimistic that it’s going to be easy to hold on to that 1990’s style agency for another ten years.
At least I’m optimistic that there’s a maturing going on in the conversation and in the industry and we’re kind of beyond the crazy early adaptors, we know who they all are. That always want that shiny new thing and we’re really in more conversations with serious agencies and brokerages. We’re making strategic decisions to connect more deeply with our customers. I’m hopeful for those who are listening and talking and are concerned about those who are pretending that there is no change.
Peter: I’m a baby boomer, Michael, and our generation and the greatest generation which is basically the parents of the boomers, they really wanted things like stability and security. Which is why they stayed at IBM for 40 years or whatever it was, they just needed the essentials. We boomers are very much into possessions and bells and whistles and things. As they go down to the millennials, they’re looking for something else, they kind of want to know how everything fits together. They want that path, they want the training, they want relevance, they want meaning. That’s why they talk so much about flexible hours and working for charitable causes and things like that.
It’s just a bigger picture and I think it’s really good, again, for an independent agent that can present an environment where they can learn, they can use tools to learn about, not just insurance, but about what the customers want. There is some really slick thing out there that can connect prospects with an agency, but I think this is their turn. This is their time to dive into these tools and many of them are, I know, some smart agency owners say, “You know what? I know I’ve got to make some changes, I’m not the one to do it. I’m gonna hire some young people to come in here and take over our marketing, take over the website, take over our social, take over our digital and do it the right way. Maybe even take over how the place looks, let’s come up with some paint and window treatments and carpeting and furniture and just blow up all these stupid cubicles, everybody stacks all this paper”. Come on, a lot of these things look like nursing homes Michael, it’s not good enough, it’s just not good enough anymore.
I think people want trusted relationships and work and where they buy their products and services they want high quality. They want to be educated and they want to have a good use of their time, everybody wants those things whether it’s an employee or a customer prospect. I think smart agency owners will be talking more about relevance and there’s plenty material out there about this. This is not really a trend so much as a realization that you can’t separate brand and culture. You can’t have an external face that doesn’t match the internal face. Brand is very much like culture, it’s the internal brand and there’s a concept in my head of an infinity symbol where if you were to draw an infinity symbol in the air you’d have on one side brand, which is how the external people look at you. The other side of the infinity symbol is culture and they meet in the middle in this x form and the x is values.
What are our values around here? and those values are lived on the inside and they’re shared on the outside. They’re incredibly powerful which is why Amazon pays so much for zappos, but their not the only example of a strong culture. There’s plenty of examples of how people are doing things in their core value statements like, “encourage and embrace innovation”, “deliver your best”, “invest in partnerships”, “commit to a culture of education”. These words have consequences and if you write these down and they’re agreed to and shared with the staff and they say, “What does a culture of education mean in our agency?” talk about those things. What does that look like? and if you have a culture of education of course you would have the most modern marketing system there is out there. Of course you would go beyond your digital file cabinet of customers and say, “You know what? We need to be much more relevant in the digital space”.
Michael: Peter we’re singing out of the same choir book here. I concur with and appreciate everything that you’ve said so far. Peter, you do work for agencies and brokerages and other organizations in the industry. A lot of the work is around what we’ve spoken about today, branding and culture, also public relations. If somebody wanted to make contact with you Peter, how should they do that?
Peter: I’m more than happy to talk to folks on the phone, I actually prefer to do that, actually have a real conversation, my cell number is 703-868-0144. Folks can call that or just shoot me a text and then I’m also available on e-mail at firstname.lastname@example.org. Like you Michael it’s a family business, my wife, and my daughter work here we have a small firm that is dedicated to the independent agent and broker channel of where I got most of my training at the big I and other organizations like National underwriter. We also do brand strategy in a firm called chromium which is chromiumbranding.com if folks want to learn about that. Then we have a research effort called, “Channel harvest research” channelharvest.com.
Just in closing Michael, my father-in-law was an independent agent and like you I just have a real connection to this industry, to the people in it. I think they’re incredibly wonderful people and I think as a group of people we should stop apologizing for being in the industry and present this industry as a very strong, powerful and positive place to work and to help people going forward. Overall, despite the challenges I’m really, really excited for these guys.
Michael: Peter, no doubt I’ll be seeing you soon at one of the national conferences that are coming up shortly. Meanwhile, again, thank you so much for sharing your wisdom and for your generosity, thank you very much.
Peter: Glad to do it, thank you, good luck to everybody.
Michael: Have a great day.