who is the redheaded stepchild of allstate's Distribution system?

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Adage Capital Management, L.P. had this to say: “I guess I just feel a little bit confused. It seems every month or so I see a press release about Allstate adding 25 agencies in this state, 50 agencies in that state. Why are we adding new agencies, which I’m guessing would be small At the same time, we’re trying to consolidate the agencies on the top side” How about a new Map It has been nearly two years since that bold announcement in the April 30, 2010 issue of Allstate’s Sales & Customer Service Roadmap Update for Agencies, which proclaimed, “We’ve declared our commitment to become the number one provider of consumer protection insurance in the U.S.!” The update went on to crow, “Just think about how great it will feel when we achieve it, and State Farm - and every other competitor - looks up to us!” Then in an article published in Crain’s Chicago Business on May 31, 2010, Steve Daniels wrote, “Allstate Corp. aims to topple State Farm Insurance Cos. as the country’s leading insurer of homes and autos within a decade.” Well, eight years to go and so far, not so good. PIF continues its dramatic fall and the troops are on the verge of a veritable mutiny. The big surprise, at least for management, is the number of voluntary terminations. Agents who are seemingly secure in their jobs are heading for the exits. They’re fed up with Tom Wilson’s spurious song and dance routine and are increasingly wary of his endgame. So, what’s gone wrong Wilson and his senior advisors have ignored many of the macro issues and focused instead on micro issues. If you want to beat State Farm, you’ll have to do it in the marketplace – competitively. If you design a clever ad campaign, don’t roll it out before fixing your rates. And if you want maximum growth, don’t fire thousands of your most experienced agents. But of course, they did both. Following are a few of many more items they should have avoided in their quest to become number one: The Branded Retail Environment (BRE): The company might have spent as much as a million dollars or more to inspect and score every Allstate office in the country. Never mind that before an agent can open an office, it must be preapproved by the company. The agents justifiably viewed these inspections with suspicion and considered them intrusive. When they found out their compensation could be adversely affected if their offices didn’t pass muster, many were livid. For brand new agents, or for agents changing locations, the company mandates that their offices include the BRE package, an expense many can ill-afford. “ As of this writing, one post titled “How is your Morale” is approaching 200,000 views. “ woople: While the competition is out there selling competitive insurance policies, Allstate agents and agency staff are spending their days watching woople videos and dealing with technology problems. A degree in woople is called the Good Hands Certification, which is a must for agents who want to earn higher commissions. The commission fiasco: Announcing a 20% commission cut without fully disclosing criteria for the variable component was another sign that the company was desperate to satisfy Mr. Wilson’s demand to accelerate his deleterious plan for the agency force. Agencies have remained in limbo for months without any way to project future revenues, causing them to slow, if not stop, their marketing efforts. Another consequence of this uncertainty, possibly intentional on the company’s part, has been the marked devaluation of Allstate agencies. It is advantageous for the company to keep the price of agencies low so new buyers can afford to buy them without saddling themselves with a lot of debt. But an unintended consequence of the company’s foolhardy snafu has been the voluntary exodus of productive agents who have decided to cut their losses and move on, rather than face the specter of lower commissions and the unpredictability of company management. Many of these agents are taking termination payments instead of selling their agencies in order to solicit their old customers after the 12 month non-compete expires, which is another huge problem for Allstate. The agency community blog: Allstate chose to rally around the social media craze and was eager to start a blog, but it was ill-prepared for the intensity of the agent outrage that soon followed. As of this writing, one post titled “How is your Morale” is approaching 200,000 views. While we commend Allstate for providing this forum, we are disappointed at their lack of response to agent concerns. Could it be that senior management believes only “resistors” are participating on the company blog If so, there are a helluva lot of them. Clearly, Tom Wilson’s initiatives as chairman, CEO and president have caused Allstate to lose policies and revenue. Expecting things to improve under his more-of-the-same leadership is pure fantasy. In part, this is because he tends to use a punitive approach to solve problems. If the loyalty index is down, fire someone or take their 401(k) contributions away. If production is down, fire the laggards and lower the commissions for the rest. The other thing about Wilson is that he expects too much too soon. If something or someone doesn’t perform quickly enough to suit him, heads roll or he changes course, which, of course, serves no useful purpose in the grand scheme of things. When you throw in his propensity to micromanage everything in his path and then pay scant attention to the business of insurance, it’s no wonder the results have been catastrophic. The bridges have been burned and the damage has been done. General Wilson must be relieved of his command and the reconstruction of Allstate must begin with a new leader who understands the agency force, the customer and, more importantly, the business of insurance. But even then, it will take years to rebuild and recover what has already been lost. Ef 28 — Exclusivefocus Winter 2011/2012
Winter 2011/2012 Exclusivefocus — 29
Page 1 and 2: New Facebook Changes Creating Celeb
Page 3 and 4: $ We lend it to Allstate agents. It
Page 6 and 7: president’s letter NAPAA/OPEIU Gu
Page 8 and 9: NAPAA Board of Directors 2011-2012
Page 10 and 11: feature The Redheaded Stepchild How
Page 12 and 13: Letters to NAPAA An agent friend of
Page 14 and 15: list of things and hand me a letter
Page 16 and 17: feature Looking a Gift Horse in the
Page 18 and 19: feature A Brief History of the Alls
Page 20 and 21: sales and marketing How to Create C
Page 22 and 23: SAVE THESE DATES... March 2‐4, 20
Page 24 and 25: to pay our employees to watch it. T
Page 26 and 27: feature One Heckuva Job, Mr. Wilson
Page 30 and 31: careers Figuring out Clusters and N
Page 32 and 33: feature Is the “Reign of Terror
Page 34 and 35: Conference 2012 Back to The Big Eas
Page 36 and 37: feature Gestapo-like Tactics in Ups
Page 38 and 39: feature We, the Allstate Agency Own
Page 40 and 41: social media What You Need To Know
Page 42 and 43: usiness planning Know your Exit Str
Page 44 and 45: careers paths Where are Your Client
Page 46 and 47: feature A Field Adjuster’s Perspe
Page 48 and 49: opinion A Silver Lining Shines Thro
Page 50 and 51: investing Avoiding the Biggest Inve
Page 52 and 53: NAPAA leadership series Renegade or
Page 54 and 55: without resistance. By making an ex
Page 56 and 57: Affiliation with OPEIU It Pays to B
Page 58 and 59: Letters to NAPAA Continued from pag
Page 60 and 61: the NAPAA market place Agencies for
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