An insurance reporter recently asked me for advice to give agents for successful sales. This is what I told her:
Focus on building deep, life-long relationships. Instead of looking at the margin on an individual sale, think about the value of your long-term relationship with that customer.
All insurance is local. As we evaluate partner agencies to invest in, we look for strong customer loyalty to the agency and its principals. Nothing beats trusted client relationships for long-term sales success.
Now, that might sound simple, but at BroadStreet Partners℠ we believe strongly that there is untold value in agencies that develop deep roots in their local communities.
This is why, unlike our competitors, agencies that become our core partners maintain their agency name, brand identity and customer relationships.
It’s our business model: we invest with principals who want to continue to grow their agencies and support them as they run all aspects of their businesses.
We’re not the Borg
Most of our competitors — the public company and private equity consolidators — integrate an agency and immediately change its name, and often shake up its staff.
Even brokerages that buy naming rights and promise to keep the local identity usually change the name within 24 months. Everything becomes part of the Mothership.
It’s like that old quote from Star Trek: “We are the Borg. Lower your shields and surrender your ships. We will add your biological and technological distinctiveness to our own. Your culture will adapt to service us. Resistance is futile.”
At BroadStreet℠, we’ve never wanted to be the Mothership. Since our founding 15 years ago, we have never changed the identity of our core partner agencies. That would be foolish because we believe their trusted local relationships are the heart of business success.
Our partners have often spent decades building up this goodwill and name recognition in their local communities — that is the last thing we want to give up.
Here are a few other thoughts we consider on the importance of maintaining local brand identity and community relationships:
Neighbors and Friends
Insurance is built off of relationships that occur over many years. And those relationships continue, often times, based on the name of the agency or the people within it. The best agencies become an important part of a community.
The principals and staff live there and know the nuances and the history of the community — the local heroes, sports teams, and hot topics. It’s incredibly important to draw customers in by letting them know you absolutely care because they are your friends and neighbors.
Trusted Relationships Beat Price
We’ve found that when an consolidator comes in and re-brands a local agency, it becomes much less relationship-driven and much more price-driven.
Obviously, price is always a consideration, but customers who have a trusted relationship focus more on the value a human being brings in protecting them, their families and their assets.
Relationships Create Value
We believe these relationships create great value for customers because the agency understands and addresses their real needs.
These agencies also bring value to the community through their support of local charities and special events. They not only contribute money but will also spend days as volunteers in service on local projects.
We know that while agents are serving their customers and communities, they’re also increasing the value of their agency.
There are many objective ways to value an agency. But valuation is not a science. Financial metrics will provide a range for the value of a business.
As we look at an agency and determine the value that its name brings, especially how well it’s known throughout a community or state, that gives us a comfort level with a maximum valuation.
This is why at BroadStreet Partners℠ we believe that building trusted relationships, and maintaining a strong local brand identity, are the keys to growth and success.
If you’d like to learn more about our approach, please contact me.