In order to successfully sell policies through the independent insurance agents who make up your sales channel, you have to be able to fight through the clutter to engage those agents. Insurance companies might find themselves competing for mindshare with dozens of competitors. And that’s not even taking into account the sales calls, meetings, risk analysis, and research that quickly fill up the calendar of the average agent.
While this can seem like a daunting prospect, insurance companies do have tools at their disposal. Effective insurance agent incentives give companies the ability to:
- Present agents with an easy-to-understand value proposition.
- Engage and communicate with agents more effectively.
- Use gamification strategies to capture mindshare.
- Structure strategic incentive promotions to maximize the profitability of independent agents.
- Gain more complete data about their indirect sales force.
Insurance Agent Incentives: An Easy-to-Understand Value Proposition
Wait, don’t independent insurance agents already get paid in commission? Will providing rewards really make a difference? If you’re unfamiliar with the argument about commission vs. incentive, these blog posts will get you up to speed:
- “Why Are Non-Cash Rewards Better Than Cash?”
- “What’s the Difference Between Commission and Incentives?”
In short, for independent incentive agents, there is nothing to differentiate the commission they make from selling your policies from the commission they make from competitors. Beyond that, there is nothing in paid commission to make an emotional impact. For independent insurance agents, commission is baseline pay. Commission is expected. It’s what you owe them for selling your policy, instead of a positive bonus they’ll associate with your brand.
Studies in behavioral economics have shown that non-cash rewards result in longer-lasting changes in behavior, at three-times the cost effectiveness of cash. Moreover, humans understand rewards. Incentive rewards are easily communicated and help to differentiate your company from the competition. To see how these factors measurably impact insurance sales, check out this case study.
Engaging and Communicating with Agents More Effectively
Once agents are enrolled in your incentive program, you have new tools and opportunities to communicate with them. Touchpoints for these programs include:
- Content on your insurance incentive program website or mobile app.
- Site announcements.
- Automated reward program emails.
- SMS and push notifications.
All of these communication platforms can be integrated with your existing agent portal and business management software. Moreover, this communication takes place in an ecosystem where insurance agents are being rewarded for interacting with your brand. This makes them more receptive to your messaging.
Using Gamification Strategies to Capture Mindshare
It’s important to keep in mind the fact that independent insurance agents are busy and easily distracted. While the appeal of rewards might spark initial interest in your incentive program, it’s up to you to keep your program top-of-mind and to turn that interest into investment.
Incentive program gamification – the use of points-scoring, rewards, competitive platforms, and other game-like elements – is an effective way to keep insurance agents engaged. Examples of gamification include:
- Creating daily trivia to drive regular engagement.
- Designing quizzes to help agents learn key selling points about your policies.
- Using interactive leaderboards to tap into agents’ competitive side – or to set qualifications for incentive travel promotions.
- Reward unexpected point bonuses with spin-to-wins, scratch offs, or Quick Points
Structuring Strategic Incentive Promotions
If you think about your favorite games, apps, or social media platforms, one thing most of them have in common is that they have a variety of objectives and give players multiple ways to win. If you think about your role within your company, chances are you also have multiple objectives and opportunities that take different priority at different times of the year.
Being able to structure multiple incentive promotions is an essential part of a successful insurance agent incentive program. This not only makes your program more engaging for agents, it gives your company and product managers more flexibility and agility to target strategic initiatives.
For instance, in the spring it might make sense to start running a promotion in California or Florida for motorcycle insurance. During the summer months, you can create special promotions in coastal states for boater insurance. Being able to act on these opportunities helps you maximize the profitability you get from each independent insurance agent who is enrolled in your program.
Being able to respond to your competition’s tactics, including incentive promotions, in a lightning-fast manner is essential to stay ahead of the game to earn authentic insurance agent loyalty.
Additionally, being able to set different award rules for different regions enables companies to stay on the right side of legislation in states that are more stringent about fiduciary incentives, without restricting their program in other region.
Gaining More Complete Data About Your Insurance Agents
Another benefit of insurance agent incentives is that your program provides a vehicle to capture important data about your participants. This could be gaining additional contact data during program registration, gathering demographic data through online surveys, or gaining access to additional documentation during the sales claim verification process. These datapoints help insurance companies and their product managers market to agents more effectively and provide enablement at key junctures.
Additionally, engagement metrics from the program gives you more insight into where you stand with your independent agents, letting you spot opportunities for growth and reengagement. All of these datapoints can be aggregated into 50 free reports and dashboards or integrated with your existing business platforms. With the rise of RFPs and AI, having access to more rich data will become increasingly important for insurance companies to position themselves for success.
Additional Tips for Successful Insurance Agent Incentives
In closing, I’d like to share a few more tips for creating effective insurance agent incentives and selecting the right insurance incentive provider:
- Minimize manual processes to streamline administration – The fewer manual processes, the fewer opportunities for user error and the lower your time costs. From registration to reward redemption, look for opportunities to automate. Doing so will enable you to devote more of your time to strategy instead of fumbling over technicalities.
- Choose incentive software that is scalable and futureproof – Similarly, you don’t want to saddle yourself with software that isn’t equipped to grow with your company. Selecting modular incentive technology with a fast time-to-market and in-house development and support will pay dividends in the future.
- Customize rewards to your target audience – Choose rewards that fit your audience’s lifestyle and that are able to scale to different levels of performance, from attainable to exclusive. Rewards are not only the primary motivator for your insurance agent incentive program, they are a reflection of your brand. The ability to curate your rewards from an extensive selection is a must.
- Team up with a trusted advisor – While it might be tempting to try to manage your program internally or to choose the most affordable incentive program provider, I would advise against it. Beyond possible compliance issues and legalistic concerns, there is always the risk that your program just might flat out not work if it isn’t backed by the the right strategy and support. Choose to work with someone who has a proven track record in the insurance incentive space.
- Begin and end with ROI in mind – An incentive program is an investment. It’s imperative to make sure the return justifies the initial cost. Achieving a substantial ROI begins with program planning and carries through every decision made throughout the lifetime of the program. Identifying and tracking incentive program KPIs can help you make informed judgments and course-correct as needed.
Additional Reading for Insurance Agent Incentives
If you’re interested in learning more about insurance agent incentive programs, I encourage you to check out some of the blogs and articles we’ve published in the past year:
- “Looking to Learn More About Insurance Incentive Programs?”
- “5 Smart Ways Life Insurance Distribution Organizations Can Still Use Incentive Travel”
- “Using KPI Based Incentives for Insurance Agents”
Or, if you’re ready to discuss this topic more in-depth, connect with me on LinkedIn or click the button below to contact us!