Strategic Partnerships/Joint Ventures to Build Your Business

[joshril]

Haven't posted in awhile, but I'm curious if any of you are utilizing strategic partnerhips/joint ventures in your insurance business to make more money?

I'm working with a couple of insurance agencies right now to help them find strategic partnerships, and the opportunity to add additional profit is huge.

Essentially, there are a couple of angles to this...

Partner with a business or another agency that doesn't compete with you to send you leads/clients...

-OR-

If you've got a solid client base, leverage that by endorsing another business/non-competing agency for a percentage of the profit.

Obviously, you don't want to spam your customers, and that's not what we're doing, but if you're sending out birthday cards, calendars, all the normal stuff that a lot of agents mail out, don't you think your customers would appreciate a solid recommendation and possibly a gift certificate/special deal to a reputable business (steakhouse, golf clubs, travel, jewelry, professional services, etc.)?

Not only does it create client loyalty and separate you from the other agents mailing calendars and stuff, but it can be pretty lucrative financially for everyone involved.

In many cases, the deal can be worked the other way around as well; a non-competing business or agency sending clients your way.

Just curious if others are doing this?


Joshua

 

[TRSecurity]

This has been our most successful way to grow our business and the income of our agents. We partner with other agents or agencies. We do work with competitors and actually even create competitors...but overall we make out well.

Here is an example:

We form a partnership with an agency or agent that has success selling medicare plans. We team those agents up with our agents that are great at annuities or final expense, etc.. The medicare agents bring our agents with them on meetings with existing clients, any new business is split.

The medicare agent can learn from this and eventually do it themselves, or they can stay focused and continue with partner(s). Usually the medicare agent experiences a big increase in income and stays with us. If they do decide to work alone after a time, they often contract through our agency anyway.

This scenario can also occur for any other combination of specialists (P&C, LTC, Life, etc.). It simply comes down to bringing together agents who are willing to work with others and share in commissions. Not everyone fits this model.

These strategic partnerships have evolved over time, some lines become blurred, others remain very strictly separate. Some agents become "exclusive" partners and don't work with anyone else...we are okay with this since they are always making money when this happens.

One thing of note - our top agents (income), by far, are ones who work with others and not on their own.

I'd be interested in hearing how other agencies are working along these lines.

 

[Bertolinoins]

Since P&C is a renewable product, I am extremely careful about giving endorsements to other service providers. I will endorse my own CPA, financial planner, attorney, etc and a very high level life agent... but I am always very careful about these "partnerships" as the are often one sided.

 

[LGilmore]

"but I am always very careful about these "partnerships" as the are often one sided. "

Same here. Agents always wanted to partner up when sales were strong for me. Never felt the same way during a down period.

 

[joshril]

"but I am always very careful about these "partnerships" as the are often one sided. "

Same here. Agents always wanted to partner up when sales were strong for me. Never felt the same way during a down period.

This type of thing should never be done if the partnerships doesn't create the same benefit for both sides. It just doesn't make sense and isn't worth risking a reputation.
- - - - - - - - - - - - - - - - - -

Since P&C is a renewable product, I am extremely careful about giving endorsements to other service providers. I will endorse my own CPA, financial planner, attorney, etc and a very high level life agent... but I am always very careful about these "partnerships" as the are often one sided.

"Vetting" your partners is crucial. If they have any negative reviews or anything like that out there, it's just not worth it. Also, making things a win/win is the key to making something like this work.

Most people feel "ripped off" on strategic alliances because they aren't setup correctly from the beginning or adequate tracking mechanisms aren't put into place.

For example... I've talked to a couple of agencies that had very loose cross promotion systems in place. "We'll send the life/health guy leads and he'll send some back to us." This is almost always going to be one-side, which might be ok if it's helping the clients out and creating goodwill, but not ideal.

You mentioned you felt ok referring to your CPA, attorney, etc. When you've done it in the past, were you compensated for your referrals in some measurable fashion? I'm working with an agency now where we're endorsing a local jeweler and providing a special offer (gift certificate) to his customers only.

The profits that come from that are split between the agency and the jeweler. It's a win/win scenario...

The jeweler gets new customers and the conversions are very high due to the existing relationship. The insurance agent wins because instead of sending out another crappy calendar he's able to provide something of real value, a gift certificate to local jeweler with a great reputation and great service. Of course, the insurance agency also gets to add pure profit to his bottom line with virtually no effort.

The keys to success with a campaign like this are:

-Solid tracking system in place
-Both parties are reputable and provide the highest level of service/products to their clients
-Both parties get a fair percentage of the profit generated from the campaign
-The offer or endorsement provides something the target audience would benefit from or be interested in

A lot of agents/agencies discount the value of their customer list and by endorsing a REPUTABLE, high-quality product/service, it adds value to the relationship, creates customer loyalty, and can potentially create a new profit center for the agency.

Of course, these deals can be setup the other way as well (referral to the agent/agency).

Joshua