Facing the Future: Can Independent Agencies Keep Up?

Exploring the Growing Divide Between Consumer Expectations and Agency Performance

Is the gap between agency performance and consumer expectation too big for the industry to jump?

Whatever generation they represent, alert agents declare their own vexing anxiety that the gap between agency behavior and what the world expects, and demands is big and getting bigger.

Further, there’s a sense that the dark mysteries that lie around the corner – more changes in technology, consumer behavior and competition – might hold nasty surprises the independent agency channel is simply not prepared for.

It’s possible that both the nature of the trends affecting the industry and the very speed of those trends represents a new form of threat for which many agencies are unprepared.

Are the challenges of today fundamentally different than the challenges of earlier eras? Surely, that’s been true for many other industries.

It’s worth remembering this isn’t the first possible phase change the industry has suffered. In the early 1980’s industry observers estimated the number of independent agencies at roughly 80,000 – a number that quickly shriveled to about 40,000.

Why? Many were simply unprepared or unwilling to negotiate industry pressures to adopt the new technology of the day – agency management systems – or they were unable to endure the long soft market of the 1980’s.

While turbulence often causes harm – industrial ‘winter kill,’ so to speak – it also clears the field for the strongest, fastest and smartest.

Will your agency be among those that not only survive but thrive in these testing times? Equip yourself with the tools and insights to stay ahead. Dive into strategies that can help bridge the divide. Don't be left behind.

How to Prepare for Change (AND WHY ‘TRICKS ARE FOR KIDS’)

Inspired by a $40 late fee for an overdue video, Reed Hasting started Netflix in 1997.

Blockbuster chose not to react. After all, it was the 800-pound gorilla in its field. In 2003, their revenues topped $5 billion.

In 2008, Jim Keyes, Blockbuster CEO famously declared that Netflix ‘is not even on our radar’ as a competitor.

By the time the company chose to react, it was too late. In 2010, Blockbuster declared bankruptcy.

How could they have saved themselves?

Not with tactics – more stores, more movies, more discounts…more of the same.

Netflix beat Blockbuster with strategy. And, Blockbuster could only have beat Netflix with their own strategy: by knowing what trends to pay attention to, and intelligently reacting to them on time.

Strategy guides tactics.

Strategy aligns every behavior, action and task – so they all go in the same direction. Minimal waste. Maximum output.

As Richard Rumelt stated in Good Strategy, Bad Strategy, ‘Good strategy works by focusing energy and resources on one, or a very few, pivotal objectives whose accomplishment will lead to a cascade of favorable outcomes.’

In other words, good strategy creates leverage: the ability to gain such measurable advantage that you generate higher input with less or equal output.

Crudely put, more money in less time. In turbulent times, it’s easy to get seduced by the ‘shiny new thing.’ Or, to follow a ‘guru with a gimmick.'

“Tactics without strategy are tricks – and, ‘tricks are for kids.’”

They may be good tactics. But, tactics without strategy are tricks – and, ‘tricks are for kids.’

The challenges facing the independent agency channel are ‘grown up’ challenges – and place the response directly in the lap of agency leadership.

Nobody said it was easy.