Gamification – What Is It and How Can It Help Agencies?

My last post concerned the use of raffles by insurance agencies and agents to promote the making of referrals.  I thought it was an innovative idea, and one that makes use of the insights into human behavior that are the basis for what is known as gamification.  Gamification is the application of the principles and techniques used by game makers to develop popular games to encourage desired behavior in non-game activities.  Research has shown that creating a competition among a group of people for a reward for desired behavior increases the engagement of those people in the desired behavior beyond just offering the reward.  This is due to our natural desire to compete and the joy that comes with winning a competition.

Staging sales contests among salespersons with the winner receiving a reward of some type (e.g., bonus, trip) is a long standing practice among sales oriented businesses.  However, there is nothing to prevent the application of such a strategy to an agency’s other employees or its customers or potential customers to encourage them to engage in a desired behavior.  Holding a raffle is a very simple application of gamification research, which has confirmed that most people would prefer to gamble on getting a bigger prize than take a sure thing if the prize is something they value.

In the case of the raffle described in my last post, the agency could have opted to give a gift card or other reward with a relatively small value for every referral made, but the research indicates more people would participate (i.e., make a referral) if the potential reward for doing so was desirable enough.  In this case, that reward had a value of several hundred dollars.  The nature of the reward can also be used to encourage the members of a specific target market to participate.  In the agency raffle I wrote about, the prize was a much sought after tech gadget.

Even attorneys are not immune from gamification principles.  Just last week, I signed up to make a blood donation to the Red Cross in response to an offer to be entered into a drawing for a $1,000 shopping spree.  I normally make a blood donation every three or four months, but decided to break that pattern and give sooner due to this offer.  These type of promotions have become commonplace in today’s world for the simple reason that they work to engage more people in whatever behavior is desired than other types of promotions.

Earlier this year, American Modern Insurance Group applied gamification principles to a program designed to educate its agents about its specialty residential insurance products.  Instead of holding seminars or webinars, the company created weekly contests that required its agents to answer questions about how its products would apply to unusual situations.  The agents were awarded points for correct answers and the speed with which those answers were given.  Those agents with the most points at the end of the contest period will be entered into a drawing to be named the “Most Confident Agent in the World”, and each successfully completed weekly contest earns an agent an entry into a drawing for a cash prize. (Click here for an article on this program.)

The possibilities for applying gamification principals and techniques to the promotion of an agency, the education and training of its employees, and the improvement of its business processes are limited only by one’s imagination.  If you are interested in learning more about how those principles and techniques can be used for those purposes, click here for a whitepaper that addresses just that topic.

 

Raffles – Can They Be Used to Encourage Referrals? (Updated)

A recent caller to the Free Legal Service program that I run for the members of the Independent Insurance Agents of Georgia asked the above question.  His agency was thinking about running a promotion that gave a raffle ticket for each referral made to the agency during a specified period of time.  The winner would receive a prize having a value of well over $100.00.  With my previous posts on this subject, I thought I had thoroughly covered all aspects of it.  However, I failed to take into consideration the creative ability of independent insurance agents when it comes to thinking of ways to generate more business for their agencies.

The short answer to the above question is YES, if certain requirements are followed.  Those requirements are found in the Georgia Insurance Code and the Georgia Criminal Code.  First, as my regular readers are no doubt well aware, the Georgia Insurance Code prohibits the sharing of commissions with any person or entity that is not properly licensed by the Georgia Insurance Commissioner’s Office.  This means that any fee or other consideration given in exchange for a referral cannot be conditioned on the referral resulting in the sale of an insurance policy or related product.  Under a change to the Insurance Code that took effect on July 1, 2016, agents and agencies are also prohibited from giving “prizes, goods, wares, store gift cards, gift certificates, sporting event tickets, or merchandise” having a value of more than $100 to any customer or potential customer in any one calendar year.

Thus, under the Insurance Code, a raffle can be used to encourage people to make referrals to an insurance agency, as long as the referral does not have to result in the sale of an insurance policy or related product and if the raffle is limited to customers or potential customers of the agency, the value of the prize cannot exceed $100.00.

What does the Georgia Criminal Code have to do with the above question?  Under that Code, a raffle is considered to be a form of gambling, like the Georgia Lottery, and is prohibited with certain exceptions.  The one exception that is relevant to the type of raffle proposed by the caller to the Free Legal Service Program requires that the raffle be conducted as an “advertising and promotional undertaking in good faith solely for the purpose of advertising the goods, ware, and merchandise” of the business in question.  In addition, the raffle cannot require its participants (i) to “pay any tangible consideration” to enter it, (ii) to purchase “anything of value” from the business, or (iii) to “be present or be asked to participate in” any type of sales or other presentation, and (iv) the prize awarded must be something other than cash and cannot be awarded based on the playing of a game on a computer or mechanical or electronic device at a place of business in Georgia (this last requirement was omitted from the original post).

The type of raffle proposed by the caller to the Free Legal Service Program satisfies the requirements of the Georgia Criminal Code because the only thing a person had to do to be eligible to participate in the raffle was supply the name and contact information of a potential customer for the agency’s products and services, which were made known to the participant, and the prize was not cash.  Since there was no requirement that the referral made result in a sale by the agency and it was not limited to customers or potential customers of the agency, the requirements of the Georgia Insurance Code were also met.

 

Recording Customer Telephone Calls – A Good Idea But Is It Legal?

In a recent post on his blog, Steve Anderson recommended that insurance agents take advantage of the new telecommunications technology that makes it relatively easy to record all incoming and outgoing telephone calls.   He suggested that making such recordings could become the primary means by which an agency documents its contact with its customers and potentially, its insurance companies.  This would save time by eliminating the need to type information about such calls into the agency management system.  There are software products that will integrate recorded telephone calls with those systems and associate the recordings with the appropriate customer and policy.  If you still want to have the security of an electronic “paper trail”, there are many transcription services available that can create such a trail much faster than your office staff.

Please see his blog post for Mr. Anderson’s thoughts about other advantages to the recording by an agency of its telephone calls with its customers and the steps an agency should take before implementing such a procedure.  However, one very  important aspect of telephone call recording was initially overlooked by Mr. Anderson; its legality.  Under federal law, it is illegal to make such recordings without the consent of at least one party to the conversation.  But each state is free to impose greater consent requirements, and it is the requirements of the state in which each party to the call is located that will govern the legality of its recording with respect to that party.  In checking the laws of Georgia and the states that surround it, I found that all but one of them require the consent of only one party to the recording of a telephone call.  Florida was the only state that imposed a greater consent requirement.  Under its law, all the parties to a telephone call must consent to its recording.

If all your agency’s customers are located in Georgia, Alabama, Tennessee, South Carolina, or North Carolina, there is no need to obtain the consent of those customers to the recording of their telephone calls.   However, if the agency decides to record all such calls, to avoid any potential issues with its customers or other parties over the recording of their telephone conversations without their knowledge, it would be a good idea to include an announcement before any incoming call that it will be recorded. Such an announcement can be programmed into many of the new telephone systems to play when the call is first answered and before any of the agency staff actually speak to the caller. It should protect the agency from violating the law of Florida and any other states that require the consent of all parties to the recording of telephone calls by allowing the agency to argue that the caller’s proceeding with the telephone call after hearing the announcement amounted to its consent to the recording of the call. That is apparently the conclusion drawn by many large companies, as such an announcement is routinely played when calls are made to their customer service centers.

If you want to be able to safely record outgoing calls, the agency staff will need to be trained to begin each such call with an announcement that it will be recorded and ask the other party if that is acceptable.  Such a procedure is advisable as the violation of the law on the recording of telephone calls is a crime, and in Georgia and most of the surrounding states, it is a felony.  Some of those states also give the other parties to such calls a right to sue for damages, if the law is violated.