Producers like to make sales calls, but they usually don't enjoy being part of the mechanical process that creates the appointments in the first place. And they shouldn't be. Their time is best spent face-to-face with prospects. So, where do the leads, prospects, and then the appointments come from?
Referrals certainly. But though enormously valuable, they're not very predictable. Call-ins or e-mail from the agency Web site are also a source, but a passive one. Some agencies want to be more proactive about lead generation, qualification, and appointment setting.
One alternative is to assign a staff member to the process of creating or acquiring suspect lists, qualifying prospects, and then scheduling producer appointments. But some agencies lack the staff resources or discipline to carry on the process systematically. Direct121 is a Web-based service intended to provide agencies - and producers - with high-quality sales appointments on a regularly scheduled basis. And the process encourages access to and use of the agency Web site, and thus is an element of out-facing marketing services.
Return on investment
The first step in using the Direct121 service is to develop a sales goal. That goal is then translated into the lead and appointment volumes needed to achieve the goal. Direct121 provides a "Return on Investment Cost Analysis Wizard" on its Web site (www.direct121.com) that assists the process. To use the wizard, you first specify your insurance focus (personal, commercial, life/health), whether the projected sales process is for new business or cross-selling existing customers, and then the process you intend to use (direct mail, telemarketing, or both). You continue by filling in the number of new sales you want to make each month, the average commission per sale, expected average retention, annual retention ratio, hit ratio, number of producers, and then desired number of leads per producer per day. A Direct121 wizard leads you through the process.
Once the information is entered, the Direct121 site projects the level of effort required to achieve the desired sales goals (mailings) as well as what Direct121 will charge for its part in the process. Though this projection process is clearly a sales pitch, it does provide a structured way to do a variety of scenarios that make different assumptions about agency staffing, retention, hit rates and so on. Given realistic parameters, the projection can itself be realistic and provide a useful tool for agency planning.
Once you're convinced that you want to use the service, you subscribe via a registration page and pay a $250 membership fee that entitles you to training, support, consulting, and access to a structured setup process.
The core of the service
Direct121 has three value elements: 1) a library of business and personal lines leads, 2) arrangements with high-quality telemarketing suppliers, and 3) a highly structured process supported by Internet-based software. You could easily find alternative lead sources, telemarketing services, and sales management ASPs on your own, so why use Direct121?
According to Barth Meyers, Direct121 founder, the integration of the elements into a coherent process makes it practical and productive. He points out that when agencies try to do direct marketing/appointment setting using a random collection of elements, they fail more often than they succeed. It's just too easy for the ball to be dropped somewhere along the way - when the leads don't come in at the rate projected, the appointments aren't made, the sales process isn't managed, and so on. Direct121 provides a system - content and discipline - that, while not guaranteeing sales, does guarantee results. (See below.)
Direct121 has access to a business database with 15 million entries and a household database with about 100 million entries. When agencies want to do cross-selling, the agency's own management system database can be the source for populating (one of) its Direct121 databases.
What makes the Direct121 database better than alternatives? Why not get a CD at the local computer store? According to Meyers, the Direct121 source is more accurate, up to date, and complete. But doesn't everyone say that? Meyers has taken another step and will guarantee that the prospects generated from these sources qualify according to an objective and relevant point system. The guaranty option distinguishes Direct121 from many other potential suppliers.
What about the telemarketing services? How are they better than alternatives already available to agencies? Meyers points out that Direct121 has established relationships with several world-class call center services that would typically be unavailable to agencies. The call centers have enormous capacity (28,000 workstations including 500, 50-state licensed P&C/L&H seats) and can take on all kinds of projects with aplomb. By employing competing telemarketing services, Meyers can maintain and enforce high-quality performance. If one service doesn't seem to be making the grade, another can be put on line in minutes. Because Direct121 is Web-based, any call center equipped with workstations with Internet access can be integrated into the Direct121 process.
How does it work?
Overall, the process is to do direct mail and then associated telemarketing to make sales appointments. For example, assume that an agency has established a sales goal of 6 new commercial lines accounts each month. With a 30% close rate, that implies appointments with 20 prospects each month. To come up with 20 appointments, the agency (through Direct121) would typically have to mail out about 500 letters. About seven of the addressees would likely respond by calling into the telemarketing center, which would schedule appointments. The remaining 13 appointments for the month would have to come from outbound telemarketing, a process that would do follow-up calling on the mailing list of 500 until the 13 appointments were secured.
The key point is that once the agency sets a monthly lead goal, an (almost completely) automated process will see to it that those leads are delivered to the agency like clockwork. That's one crucial difference between what an agency can do for itself compared to the kind of services that can be delivered by Direct121.
To make the process go in the first place, an agency must define its market as specifically as possible (for commercial lines, that means SIC codes, business size, geographic region, etc.) and have direct mail text and telemarketing scripts available for the call centers. Direct121 provides a variety of letter and script templates agents can customize for their specific purposes.
Each month the agency draws a planned number of leads from the database, inspects and approves them, and then passes them on to the direct mail/telemarketing process. If the agency expects to handle 20 appointments each month, it could ask for 5 per week, with the sales manager handing off the prospects to one of more producers.
Once the lead is assigned to a particular producer, the producer can download the contact information into Outlook or ACT!. Direct121 can support download into other contact managers and even agency management systems - and will as the demand materializes. It's up to the producer to update the status of the prospect on the Direct121 site. If this doesn't happen, reminder e-mails automatically go out. With further lack of response from the producer, the Direct121 system can turn off the leads spigot. The sales manager in the agency has access to all the information about the leads and their status, both specifically and on a rolled-up report basis.
By the way, prior to each appointment, the Direct121 system sends a reminder e-mail (or FAX) to the prospect and another one to the producer that encourages him or her to confirm the appointment by telephone. The prospect reminder should also includes a link to the agency Web site, which encourages integration of agency Web site content into the sales and marketing process.
While making sales may be an art, appointment generation is a game of numbers and largely mechanical. Therefore it can make sense to use an automated, hosted, outsourced service.
Audio prints
One clever element of the Direct121 service is the availability of audio prints; that is, recordings of the conversations between the telemarketers and prospects when the appointments were being set up. The producer can listen to the recording dialog before going out on the sales call, gathering both information and nuance that might not be evident from a text-based call report. The audio prints can be heard through the Internet and the producer's PC, but they can also be accessed by telephone, sometimes a more convenient method, especially for producers on the go.
Lead/appointment scoring
I mentioned above that Direct121 scores all leads/ appointments, and (as an option) will guarantee that they meet or exceed a scoring floor. Scoring is based on a number of categories, e.g., periodicity of shopping, imminence of expiration date, business detail update, relevance of contact, willingness for an immediate appointment, and active response (or lack of it) to the direct mail letter. It makes at least some sense to think that some sort of scoring process makes sense and is a better predictor of success than an unscored mish-mash.
Mail-A-Check
Direct121 allows agents to order its services and pay by credit card - just what you'd expect an e-commerce company to do. But what if the agent doesn't want to pay by credit card, for whatever reason? Direct121 has an answer - called Mail-A-Check.
In this case, when the agent orders services and wants to pay by check, the order is held but suspended. The agent prints a remittance form from the Web site, attaches a check, and then mails it to Direct121. With the check in hand, the vendor notifies the agent via e-mail that the campaign is now available for execution.
Track record
Direct121 is scheduled to become available to individual agents in September 2001, but the service isn't new. It's been in use for some time by The Hartford and its agents selling its Spectrum small business product. In this case, The Hartford supplies the database and then monitors the sales process agency by agency.
The service is free to (qualifying) agents (The Hartford sponsors it), but can be used only to sell Spectrum. Thus far, according to Meyers, the results have exceeded the carrier's expectations, and The Hartford private-labeled version of the Direct121 service is available to 6000 agents. One advantage Direct121 has over past carrier-sponsored sales systems is that Direct121 provides complete transparency into the process. The carrier can see exactly which agencies are doing what. In the past, that kind of insight into agency activity was very difficult to achieve.
Though Direct121 can be used by agents for one carrier and one product, not a few agents would probably benefit from using it in a broader, multi-carrier way.
Size doesn't matter
Technology and especially the sorts of services being offered independent agents by ASPs can level the playing field. Even small agencies can use tools and services heretofore available only to carriers and large brokers with multi-million dollar IT budgets. Direct121 puts itself squarely in the category of offering high-ticket services at an affordable price.
Some background
Direct121 was founded by Barth Meyers, an industry marketing technology veteran. In the early 90s, he was involved with AIM (Automated Insurance Marketing), a part of AMS that provided contact management, sales force automation, and campaign management software to independent agents. Meyers also worked with Applied Systems and some of its e-commerce and marketing initiatives.
Observations
I can't say whether Direct121 will really work for every agency. It seems to be a good fit for The Hartford and its efforts with Spectrum. I do know from personal experience that the hardest part of consistent sales success isn't the sales calls - they're fun. Rather, it's the mechanical work to generate the lead and appointment in the first place, and then the monitoring and management of the sales effort. That's the area Direct121 addresses. It might make sense for an agency to try out the service at some modest level to test the service and the agency's ability to profit from systematic Internet/call center assisted sales process front ends.
For more information, see www.direct121.com.
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