Communication Sins…

Good to see you!” The smiled greeting came to me and my boss, Fred Wilson, from the president of the national industry association. The occasion was the official opening of the association’s new office, located in one of the city’s shining high rise towers. Fred was the manager of our insurance company’s downtown branch. As the company’s senior marketing representative I was familiar with many of the people we’d meet at today’s opening.

We quickly circled the impressive new quarters, then found our way to the boardroom, where trays of cheese and crackers had been laid out beside pots of coffee. As we made our way inside we recognized two of the figures helping themselves: Bob Davies, co-owner of a successful midtown brokerage, and Al, who ran a well-automated and thriving insurance office in a small town about 160 kilometers from the city. “What brings you two along for this opening?” Al said shaking our hands. “Did you come to see what your company’s annual membership fee helped to buy?” Fred smiled back at him, and said, “just showing the flag, old boy. And of course, Dave here is along to make sure you small town brokers don’t get too rowdy.”

Bob took a sip of his coffee and looked around. “Nice place the association has moved into. But I do wish they’d sort out their communications glitches.” Seeing our questioning looks, he continued. “My invitation for this event misspelled my name, and they only sent one invite to me. They forgot to send one to my partner. And no invitation for my office manager who probably knows more than I do about what goes on in our business.” He shrugged his shoulders. “Maybe it’s a small point, but last week when we got invitations from one of our computer software suppliers to see a new product, the invitations came personally addressed to every key person in our office, hand signed.”

Broker Al grunted. “That’s one of the deadly communications sins. I call it ‘the scattergun approach’. In other words, take rough aim at your target, blast away and hope for the best. We all have mailing lists in our offices, but you have to be aware that people move, people get transferred or remarry, people die. Unless you update your mailing list it quickly becomes stale, then it becomes obsolete. Don’t depend on your customers to do the job for you by calling in with changes. Give someone the task of reviewing your mailing list, renewing it, and even personalizing it with the first names of principals, partners, and other key people, particularly for your commercial business.”

Fred Wilson set down his coffee cup. “Fair enough. Now then, somebody, give us another communications sin.” I was the first to speak up. “I think there’s a special place in hell for the ‘say nothing school’. You know the sort of people I’m talking about. They’re the ones in our business who believe that the least you say, the better. That way, so they think, you won’t be likely to get into trouble. But, the fact is, you can’t say nothing forever – and if you don’t ever meet issues head on, people will assume that you’re either indifferent or arrogant, or both. Now, I think you all know that our company has worked hard at polishing its communications effectiveness over the years. We have a communications director who sits on our executive team, and we have a “communications manual” which sits on every one of our managers’ desks. The manual sets out a whole range of communications imperatives and one of those is titled something like ‘tell it like it is…’.”

“Can’t that be dangerous when rates are shooting up, as they were a couple of years ago?” Al queried, but before I could answer him, my boss jumped into the fray. “A whole lot less dangerous than saying nothing, then facing the anger of customers who suddenly find themselves looking at a 12% or 15% premium increase,” Fred said steadily. “You’ll never convince some individuals of course, but in my experience, if you are upfront and honest, most people will give you the benefit of the doubt. They may not like it, but at least you’ll have laid the plain facts in front of them. Once you start ducking the issue, or fudging the facts, you have to keep on doing that – eventually people see through it. Then you’re really in trouble!”

There was a momentary silence, then Bob Davies spoke up. “I agree fully. And I don’t think you can over-emphasize this basic communications question of openness with your clients. For example, I wonder how many brokers show all the quotes they get for renewal of a good piece of commercial business? I do, even when I find I may have to justify a substantially higher quote because that company is where I feel the risk should go. It’s not a question of a higher commission, it’s a question of placing the risk with the best insurer. I’ve moved accounts to a company quoting less, and sure it meant a lower commission for our office, but you can’t allow commissions or fees to drive your business decisions.” He paused for a mouthful of coffee, then carried on. “Now here’s my nomination for another communications sin: I call it ‘bring on the bafflegab’.” He glanced around. “You know what I mean. In this business of ours we sometimes take cover behind some pretty deadly bafflegab. We churn out statements like, ‘a combination of adverse weather-related occurrences particularly in personal lines’ underwriting, together with the current negative equity market has hastened the decline in industry operating results’ – blah…blah…blah. It may be factual, but to me it’s pure boilerplate bafflegab. Give me simplicity and directness every time. Couldn’t we have said instead something like, ‘more car accidents, bad weather and poor stock market returns have hurt our bottom-line’?”

As Bob finished speaking, a figure materialized at his shoulder. I recognized the face of Willard Jackson, the senior information officer at the association. He was a smooth and affable veteran who had served in the corporate communications’ field before making the jump into our industry’s trade association several years before. “Did I hear something about a hurting bottom-line?” he said cheerfully. “Don’t tell me your company is singing the under-performance blues, Fred. Why, the industry is positively awash in profits these days!”

Fred Wilson smiled back and drew the communications executive into our small group. “We’re just talking about the sins of miscommunication, Willard, but you wouldn’t know anything about that, now would you?” Willard put his hands up to his head and pretended to frown deeply. “Um, let me think carefully about that…” Then he looked around and chuckled. “Hey, I think I’ve probably seen and committed every communications sin in the book. Tell me the ones you’ve listed so far.”

I quickly reeled off the ones we had already discussed and he nodded his head firmly. “Yup, they’re leading contenders all right. Now let me give you another one to add to that list. I call it ‘run scared’.” He leaned in towards us, “let’s be honest here. In this business of ours we tend to overplay our bad news and underplay our good news. Look what happened when the industry turned the corner recently and began to make solid profits again. Suddenly we began to get all defensive, as if we had been caught with our fingers in the cookie jar.”

“Yes, now we’re finally back in a profit position, everyone out there is mad at us again,” I observed. “We can’t win, can we?” The communications expert nodded and gave us a wry smile. “You’re right about that, Dave. The way some politicians and consumer advocates reacted to our good news, you’d swear they think it’s a crime for property and casualty insurance companies to actually make money. In their view, if we make any money at all in this business, we have to be ripping people off!”

Broker Al grunted in agreement. “You have to have one of the world’s most challenging communications jobs, my friend. When insurers are losing their shirts they get zero sympathy. People say: ‘Aw, these guys make millions on their investments. They don’t expect to make any money underwriting insuran
ce risks’. But they conveniently forget that the stock market has been in the dumps until quite recently.”

“Exactly!” Willard said firmly. “When underwriting and investments both go sour at the same time there’s a lot of red ink splashing around this business.” Beside me my boss Fred coughed gently. “Willard, I agree with what you’re saying. But I have to ask you this: from a communications perspective, don’t you think that our industry is starting to get a bit gun-shy over this whole issue of profits? After all, most sensible people realize that companies are created and launched for the express purpose of making money, either for the owners or the shareholders or both. There’s nothing underhand, or shameful or dishonest in this. It’s free enterprise at work. And if a company doesn’t make a profit more often that it suffers a loss – well, it’s not going to be around very long.” He looked around and gave us a brief smile. “So, why do we get all anxious and defensive when we run our business well enough to turn a profit?”

It was Bob Davies who answered first. “I think we all know the answer to that, Fred. As an industry we just haven’t done a very good job of telling our side of the story to the people who need us, and use us. Do many people really know anything about how auto insurance rates are set, about accident forgiveness, or about how our industry pours money into safer driving programs? How many of our customers really were aware, for instance, that auto rates have been going down over the past year and a half, and that they’re still going down? We had a strong and positive communications story to tell consumers, but I don’t remember this fact being mentioned in news reports, being stressed by our public speakers, or getting strong emphases in many company annual reports. Did the industry drop the ball on this?”

Willard shook his head gently and held his hands up in front of him. “Remember, you guys, we can’t force our side of the story on reporters, or on our member companies to trumpet. Look, this country’s banking industry consistently makes a richer return on equity than our business. Over the past seven years or so, they’ve produced a return of something over 14%. Over the same period our business barely managed 10%, and of course we have those wild fluctuations that pulverize our bottom-line for years on end. In 2002, our industry staggered in with a measly 1.7% return on equity. I’d be willing to bet that most consumers think we’re rolling in money all the time. You know, we’ve produced scads of material on the industry premium reductions, particularly for auto insurance, but the sad fact is that good news is often no news. People tend to react to bad news. And the media is definitely guilty of this.” He held up two hands in front of him. “Listen, if you saw a headline in your morning paper that said, ‘No Crime In City Overnight’ or ‘No Violence’, you’d skim quickly to the sports news. But if the same headline said: ‘Madman Kills Three in Wild Rampage’ you’d stop right there to read it. I’m afraid the old adage is true: ‘Dog Bites Man’ is a nothing event, but ‘Man Bites Dog’ is news.”

Al nodded his head, then turned to Willard. “Hey, that’s a good point you make, and I’m not trying to put you on the spot here, but there’s another side to this story of sudden industry profitability. Just before news of major industry profits began to circulate in the media, I got urgent fax messages from a couple of my lead companies. They announced that they were indeed about to release news of excellent profits Then they said that while they were happy to be doing well, they were also deeply concerned over the reaction of consumers to this good news. So worried, in fact, that they used most of the message suggesting ways in which I could respond to any customers who might call asking about the good profits being reported by most insurers.”

“What sort of advice did they send to you in their message?” Fred asked. “Oh, the usual stuff,” Al replied. “That overall accident frequency in auto business particularly was down, and that these appeared to have been fewer claims reported.” He shook his head and laughed. “Now I know they meant well, but to me it all sounded very defensive, and it didn’t give me much credit for knowing how to respond to my customers.” At this, Bob Davies took a last mouthful of coffee and turned towards the doorway of the boardroom. “Well, as always, I think I’ve learned a couple of things today,” he said with a small chuckle.

“Amen to that,” Fred Wilson said, turning to me with a quizzical smile on his face. “So I’ll leave it to Dave here, to give us all any last words on communications sins.” I cleared my throat. “Okay. I’m prepared to share one last communications sin with you. One that I’m guilty of from time to time. ‘failing to know when you’ve said enough.’ How’s that?”