Realism About Social Media and Insurance Agent Productivity

A recent report of social media driving a 22% increase in productivity is misleading, but that doesn’t diminish the value of this emerging technology for agents — the perennial social networkers of the insurance industry.

Recently I was avidly following the LIMRA-LOMA Social Media Conference (##LLSMC) on my Twitter stream and was delighted to see a tweet from my friend Terry Golesworthy of Customer Respect Group (#TerryCRG). Terry reported that Financial Advisers using social media at @Thrivent were 22% more productive than a control group of non-users. Terry seemed to imply that this was just the sort of evidence, to be directed to recalcitrant insurance execs, that social is worth it, that indeed social really does have a quantifiable ROI.

The fact that the 22% stat came directly from Hearsay Social, a company I esteem highly, gave me a nice little lift, too. But if the uplift was sweet, it was also very short. I couldn’t help but reflect back to the early 1990s, when a colleague and I created and produced the intouch client newsletter for New York Life agents. The idea was simple: Supply to agents a soft-sell newsletter that they could use to stay in touch with their clients and prospects. The call-to-action was to “talk to a professional experienced agent.” We also provided a nice little tear-off section that when mailed went directly to the agent who had graciously sent you this newsletter.

Intouch was an immediate success: Within two years we had almost one-third of New York Life agents subscribing to the newsletter program. No other company-sponsored program had ever shown more than a 10% uptake. We were so proud that we quickly set off to prove to the non-participating two-thirds that they should be subscribing, too. To validate the bottom-line impact of the program, we looked at the first year commission (FYC) results for newsletter subscribers versus a control group of established (i.e., at least 4-year) non-subscriber agents. And, guess what? Subscribers to the newsletter produced 33% more FYC than established non-subscriber agents!

I remain proud of what we accomplished with the newsletter. The articles were indeed “soft-sell,” seldom even mentioning, let alone pushing specific insurance products, and always expressing concern on the part of agents for their customers and prospects. However, the 33% figure was essentially bogus.

Once we took a look at our list of subscribers and compared them to the control list of non-subscribers the truth became obvious. Yes, we had made a pretty strict comparison: our control group wasn’t a generic list of present day company agents — 80% of whom, BTW, fall or fail out of the business every four years — but rather a group of established agents. They were professionals who had stayed the course; they had proven to be “successful” and were likely to continue being so. There were even a handful of stars, guys and gals with well-established positions in their communities who simply didn’t see any particular value for them in a newsletter program. But, ceteris paribus, they weren’t the real stars. The real stars, were the existing stars, the guys and gals who were already the most successful agents in the company or reaching their way there.

Not surprisingly it was those stars who instinctively grasped that regular, discreet, non-pushy communication with their clients and prospects was simply an intelligent new course of action. Of course, they produced 33% more FYC than the control group; they always had and they always will, newsletter program or no newsletter program. Or, to adapt the observation to the @Thrivent results, of course they were 22% more productive, social media participation or no social media participation.

Now, while the observation should counsel caution on evaluating the true ROI of social media, it does not mean that either the newsletter of yesterday or the social media of today is without value. On the contrary, I think both tools kept these productive agents on the upswing. Nor do I believe that the Thrivent agents who participated in the Hearsay pilot in social were not smart to do so — or that those in the control group were, shall we say, less smart. Actually, it turns out that the pilot agents were to a great degree already participating in social, and in fact had been were required to have a minimum number of Facebook friends, be on LinkedIn, and have a Twitter feed. These guys and gals were natural social networkers; how could they not want to take advantage of online social networking?

And my second bet is that they were already among the more successful Thrivent agents. It is difficult to quantify how much either newsletters or social media might increase agent productivity, but smart, savvy use of communication media is natural for agents smart enough to understand how they might be used effectively to improve client engagement.

As Terry says, “so many senior execs dismiss social as something their kids do.” Lamentably, this is true. But you aren’t going to convince them with bogus stats that they quickly understand are really just self-fulfilling prophecies: Give our agents permission to do X and the best of them will take advantage of it and (continue to) produce better than those who disdain it and will continue to produce at a lower level.

BTW, there are good, in fact, unimpeachable arguments to convince senior execs and agents to participate in social, and to achieve Digital (not social) ROI. But one of them is not a 22% increase in productivity.

More on the good arguments for using social media coming soon in this forum.

Kenneth Hittel // Ken Hittel is currently Digital Strategy Advisor on the board of advisors to FairWinds Partners, a Domain Name Strategy and Services provider. Prior to joining the FairWinds board, Ken worked in a variety of positions at New York Life Insurance Company for more than 20 years, the last 12 of which involved running the Corporate Internet Dept., responsible for the Company’s Digital Strategy, its Web sites, online lead generation programs, and its portfolio of mobile and Social Media presences. Ken has a Ph.D. in Philosophy and Political Science and a M.A. in philosophy and Economics from the Graduate Faculty of the New School University. Follow him on Twitter: @khittel or email him at [email protected].

Comments (6)

  1. One issue that arises is: can insurers use social media – or content marketing – to move poorer performing insurance agents up the ladder to become better (whatever that means) performing agents?

    A second issue: is the use of social media – and/ or content marketing – a sustainable capability that will transform poorer performing agents into better performing agents? My opinion – based on starting my career as a Summer life insurance actuarial student for John Hancock in 1966 – and since gaining experience in both life and P&C insurance is “no.”

    • My opinion (perhaps obvious from the original post itself): Agents who intelligently use communication and engagement tools will do better than those who eschew them. But I don’t think it’s because Social is magical — I think Social participation for agents is today pretty much table stakes, not much different than insurance companies in the mid-90s rolling out Web sites (even if they didn’t have a clue what to do w/ those sites). So I don’t really think Social will be a golden key to success for agents, although it certainly COULD help brand new agents get a leg up on the business with their “natural market” marketing and w/ expanding that natural market beyond aunts, uncles, college buddies, etc.

  2. A variety of – probably jumbled – thoughts come to mind:
    1. Insurers need to first have a coherent business strategy before using social media of any type.
    2. Insurers which use social media should do so in support of / alignment with the corporate strategy
    3. Insurers can’t view their agents as a homogenous block when deciding how to use social media or track the success – or failure – of using social media
    4. Insurers have the data to segment their insurance agents by productivity and/or profitability and should do so on a continuous basis
    5. Insurers also need to continuously track the availability, nature, and objectives of the exploding portfolio of social media (e.g. are your agents using Pinterest… should they as only one example) … there will need to be different “content” for each of the social media types used
    6. And to the crux of Ken’s article: the best agents will always find a way to remain at the top of their game … and insurers will need to provide them the capabilities (e.g. in the current mobile digital social marketplace, which social media sites to use and how best to use them) to help them remain there.

    • Barry, no disagreement here. At New York Life, the one question that drove all our Digital activities was: What is the intelligent thing for NYLIC to do (on the Web, in Social, on Mobile, etc.)? You cannot answer such questions w/o a good grasp of overall corporate strategy. And, yes, even a so-called “captive sales force” is still a matter of herding cats. Some agents will automatically gravitate to Social and others will avoid it like the plague. Different strokes for different folks, and different tools then for different folks. And, most importantly, we are indeed talking about a portfolio of media, tools, etc. for both the corporate folks and discrete groups of agents.

  3. Great point, Greg Weiss. Coming from someone that worked with Ken to ramp up the Social Tech outposts for NYLife, you know what you’re talking about. Mad Respect.

    Ken, what you’re talking about here is Content Marketing / Inbound Marketing. The Newsletter back in the day was a great example of how effective Content Marketing can be. And now today, eBooks, Blogs, Videos, Memes, Infographics, Slideshares, Instagrams, etc. are used for the exact same purpose. Content needs to do one or all of three things: Educate, Entertain, and/or Inspire. If the content fits that model, it should serve whatever business purposes are needed – branding, lead-gen, sales, satisfaction, etc.

    The conundrum is as timeless as the human race. Decision-makers in organizations work really hard to get to the top, taking calculated risks along the way, and finally arrive at the goal. At that point, they go into ivory-tower mode – isolation, blinders, caution, protection, complacency, perhaps arrogance. These elements then lead to corresponding decisions that we’re seeing play out in full view today – no or poor Linkedin profiles, no Twitter accounts, no use of Facebook, no Blogs, no idea how to generate media – just satisfied with clearing the in-box. And certainly no vision for the enterprise in how to leverage Social Tech for competitive advantage, growth, financial health, employee morale, recruiting, and retention, customer service and satisfaction, etc. etc. etc.

    At a recent Social Tech implementation session for an insurance client, a top player by any standard, they asked me to do a lunch-and-learn all about Twitter. Before I started the session, I asked the team what sentiments they currently had about Twitter. The most senior person in the room said, with a pleasant-enough demeanor but a somewhat nervous chuckle, something along the lines of, “I don’t get Twitter. I don’t know why I would use Twitter. I’ll NEVER use Twitter. It’s too much information.” So BEFORE we even get out of the gate, he hardened himself to it. That’s the kind of thing that is rampant among insurance executives. The good news? By the end of the session, he said something like, “OK, I can see SOME value. But I’m still not going to use it.” (Well, he can’t use it on company machines anyway. IT has blocked Twitter.)

    It’s funny but it’s not.

    Look forward to hearing from others. Keep blogging, Ken. The industry desperately needs to hear your voice.

  4. People will indeed get hung up on causation/correlation… But at the end if the day, it’s about relationships! And that’s what social is best for!

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