THE 1,200 INDEPENDENT AGENTS and their guests who attended Safeco Corp.'s two-wave annual incentive program in Banff, Alberta, this spring expected they'd have a great time golfing, hiking, biking, river rafting, and basking in the beauty of the Canadian Rockies. But one thing they didn't expect was to be greeted at the baggage claim area at Calgary International Airport by Safe-co's senior-level execs. “Definitely not your usual welcoming committee,” said one agent at the second-wave opening reception.

And that was just the beginning of top-brass involvement. There they were again meeting the buses in front of the elegant Fairmont Banff Springs, where the meeting was held. And again at the opening reception, where Safeco's divisional heads greeted qualifiers at the door, sat down and ate with whomever was nearby, and got just as big a kick out of a hilarious Queen Elizabeth impersonator, an oxygen bar, and a birds-of-prey exhibit as everyone else did. You might have seen the president of Safeco's personal insurance division on a hike-and-bike, or its life and investments president on a float trip down the Bow river. These guys were everywhere — by design.

“Part of our overall strategy is that we depend on the independent agency distribution channel, so this meeting has become very important to us strategically,” says Kent Kawaguchi, who heads Safeco's corporate travel and incentives department. “We structured the program to encourage mingling between our executives and the qualifiers. We put a Safeco host with each golf foursome and at each table at the final gala.” Unlike many companies, which typically send in their execs to give a talk or two, Safeco involved its corporate leadership in every part of the incentive. And for good reason.

An Uphill Climb

“Safeco used to be the last bastion of the starched white-shirt brigade,” says Bruce Allenbaugh, senior vice president of marketing, of the 80-year-old firm. “It reflected the discipline and precision of which the company was proud.” But when the company found itself losing $1 billion four years ago, it decided the time had come to make some changes to reverse the trend. The decidedly unbuttoned atmosphere of Banff is just one manifestation of the company's new strategic direction.

Safeco's real turnaround began in 2001 when it hired its new chairman, president, and CEO, Mike McGavick. He brought a firm belief in the value of face-to-face interaction between Safeco staffers and the company's 8,000 or so independent agencies, along with new business practices and ideas. McGavick and the other top execs put in a lot of personal time with Safeco's independent agencies — especially its top producers — both to build loyalty and to communicate the corporate business message. Last year, for example, they met with 3,000 agency representatives all over the country in 30 days.

Strong executive involvement at Safeco's annual incentive, called the Conference of Champions, is also part of Safeco's strategic plan to build agent loyalty, according to Allenbaugh (whose department also includes the meeting planning division). And execs take it very seriously. How seriously? The company's senior vice president and CFO, who had given a talk to the first wave of attendees three days before on the company's bottom-line issues, had to leave Banff to fly to London to attend her niece's wedding. But she bounced back to Banff in the wee hours of the morning to get there in time to talk with the second wave of producers.

So far, the plan seems to be working. In 2002, Safeco made a profit of more than $300 million, and 2003 was shaping up nicely by the time of the conference despite this spring's many weather disasters.

Hold the Fluff

The 2003 Conference of Champions in Banff was the first time in a number of years that Safeco didn't kick off the opening general session with live entertainment, like the cast of The Lion King singing “Circle of Life” for Safeco's 2001 “In Concert” — themed conference in San Diego. But as it turns out, they didn't need bells and whistles. CEO McGavick, who could take up speaking for a living if he ever decides to exit the insurance business, opened the general session by thanking the agents for sticking with the company over the past four turbulent years. “You are the ones who have achieved the rare service of turning Safeco around,” he said, then launched into how the firm planned to continue its upward business spiral.

But he went even further: “From 9/11 to Iraq, there have been challenges to this industry,” he said, adding that the industry went from excluding terrorism coverage to urging Congress to pass the Terrorism Insurance Act. “But the most profound risk-management assignment we have is to stamp out hatred in our lifetimes. Each of us has a role to play.” In short, his message went way beyond “atta-boys” and into some real substance about business — and life — in 2003. And it's still on-message, says Kawaguchi. “Diversity is an important part of where this company is going — both Safeco and its agents have to mirror the changing demographics of our customers.”

Some of the “blue-taggers” (first-timers) were a little surprised by the depth of the business meetings. “I've gone to other company trips where it's kind of understood that no one expects you to actually go to the business meetings,” said one first-timer after the first morning's sessions. “These are usually more ‘pretend’ kinds of things — I almost didn't come to the sessions this morning, but I'm glad I did.” Many of those who'd been to a few Safeco conferences before came prepared with notepads and pens. Several participants were planning to write up reports on the sessions to share with others in their agencies when they got back home.

Cut the Budget, Keep the Quality

As with virtually every other insurance company, the current market is still causing some lean times at Safeco, despite its gains. “Our budget is actually a fairly constant percentage of our earned premium,” says Ken Pickle, CPCU, CMP, Safeco's manager, incentives and conferences. “But the dollar value changes based on how well we're doing.”

The meeting department is always looking for ways to decrease costs without decreasing quality. Says Kawaguchi, “We did increase the qualification requirements this year because, like many other companies, we were in a cost crunch, and our expenses got a little out of control.” Increasing the requirements so producers now have to be in the top 5 percent to 6 percent, instead of the 7 percent to 8 percent of a few years ago, helped the planners do more with less.

This has been the strategy for the past several years: Safeco's Conference of Champions has gone from four four-day programs of about 650 attendees each, to three groups of 650 each last year, to two 600-people waves this year, including guests and spouses. In 2004, the company is pursuing a slightly different tactic: The top 100 qualifiers and their guests get to go to Barcelona; the next 200 top producers and their guests get a trip to Lake Las Vegas. The top 300 agents of 2002 were already buzzing about Barcelona before they even left Banff, thinking of ways they could beat out the other 200 to get to Spain, though, as one qualifier said, “Lake Las Vegas is a heck of a consolation prize.”

Safeco also adjusts each year's qualifying rules. “We take each year's production figures and run them through a simulation program to make sure that, if the market turns, we don't have more qualifiers than the hotel can hold. Luckily, we've been able to write the rules just tough enough,” says Pickle. The company learned this lesson the hard way with a program back in the 1970s, when they thought they'd have 750 agencies qualify, then the big commercial market surged and they ended up with 1,200. Safeco qualifies agencies on a credit system: If they earn the credits, they win the trip, though there was a ranking component as well for this year's conference. “If you just qualify the top 200 agencies, you'll know how many you'll get,” says Pickle. “But the downside is that an agent on the cusp could think he's won the trip, then get aced out in the last 30 days. That's pretty negative P.R.”

The More Things Change …

The increased focus on business isn't the only change Safeco has made to its Conference of Champions incentive, which has been around for more than 40 years. Up until now, it was a joint program for multi-line and life-only distribution channels, says Kawaguchi. “This is the first year we held a separate conference for the life-only distribution channels, such as banks and financial institutions.” These 120 invitees and their guests attended the meeting, called the Summit, at the Ritz-Carlton Half-Moon Bay on the Northern California coast in April. “We initially wanted independent agents to sell more life products. But as we grew and got more life distribution channels on board, we decided to do something special just for them,” says Kawaguchi.

The firm's also doing something else new this year: online post-conference attendee evaluations. “I know the response from our Summit life and investments meeting was higher than what we've gotten for the paper evaluations we used to do,” says Pickle. And that's important, because the planners use the satisfaction ratings to improve the next year's conference. Another change, which again is designed to increase communication between the company and its independent agencies, is the creation of an agent advisory council that meets regularly to discuss agency issues and interface with the company's employees — which last year spawned another 35 meetings around the country.

… The More They Stay the Same

But no matter what changes Safeco goes through, one thing will remain constant: A beautifully turned-out program. While the final evening banquet in Banff — where singers and acrobats from Cirque Fantastique whirled, swirled, and seduced the crowd into entering a world of magic — capped off the event in style, it was the closing general session that really brought it all home. Harvard Business School Professor John Kotter, through examples, video clips, and his own down-home style, mesmerized attendees with an interactive presentation on redefining management and leadership. He urged the audience to think about what it is they really do: “What you sell is a whole lot more than insurance contracts,” he said.

It could equally be said that what the program was selling was a lot more than a reward for good sales behavior: It was a sense that everyone's in this together, and that together, just about anything is possible.

The results of the official post-con evaluations weren't in at press time, but an informal survey of qualifiers at the Banff trip revealed nothing but universal raves. Seems like Banff was on a lot of lifetime to-do lists for these agents, and having multiple opportunities for some face time with Safeco executives was definitely an added draw. “I really shouldn't have taken the time away from the office right now, but how could I resist this?” asked one agent, gesturing at the grand hotel architecture with majestic Mount Rundle rearing up in the background.

Words like “seamless” and “amazing” abounded, even though the planners just laughed when asked if everything really ran as perfectly as it appeared. “But I'm sure glad it looks that way,” says Pickle. As one attendee summed up, “I've been coming to Safeco incentives for years, and each year it's better than the last. I really liked that I could run into one of the company executives in the bar and just shoot the breeze about the business. I go to a lot of these things, but these guys really pull out all the stops.”

Politics, Pestilence, and Site Selection

Safeco usually picks a beach-and-sun resort for its incentive conference.

But for 2003, they wanted something different. Was it just luck to have picked Western Canada, given the world political situation this spring? “Not entirely,” says Kent Kawa-guchi, assistant vice president, corporate travel and incentives. “We selected the site back in 1999. That year, we were going to send a group to Bali and Singapore. But then that area began experiencing economic and political turmoil, and we had to cancel and move it to Hawaii. So we were a little gun-shy just then about taking it too far from home.”

They settled on the Fairmont Banff Springs — a good choice, as it turns out. “Usually, when we do our orientation meeting a few days before everyone arrives, five to 10 people from the hotel come,” says Bruce Allenbaugh, senior vice president of marketing. “We had 45 staff members from the hotel come to this year's meeting.”

Only one qualifier canceled over fear of severe acute respiratory syndrome, and a few more asked to be rerouted around Toronto, which was under a World Health Organization travel advisory at the time of the trip. While the planners didn't hear any concerns over mad cow disease — a cow in Alberta had recently been diagnosed with the illness — Ken Pickle, CPCU, CMP, Safeco's manager, incentives and conferences, says they did switch a beef entrée at the final gala to bison, and there wasn't a burger in sight at the Western-style barbecue. The bigger issue, Pickle says, was a threatened strike at Air Canada on the changeover day between the two waves. “We immediately began negotiating extended conference rates for qualifiers who might get stranded.” Fortunately, the dispute was settled just before the midnight deadline.

Allenbaugh asked Safeco's sales professionals — whose job is to bring in new, high-producing independent agencies and maintain the loyalty of the entire agency network — to choose between Paris and Barcelona at a sales meeting earlier this year for the 2004 conference. Barcelona won by a landslide — and that was before the war with Iraq caused U.S. sentiment toward France to sour. “Even if the sentiment is totally changed by the time of the conference, the damage would have been done,” says Kawaguchi. “The motivation has to happen now, not next year. This whole business is so fragile. You see how things can change overnight due to outside influences.”

Safeco's 2004 Conference Timeline

2-3 years out (decreased from 3-4 years): Do initial site visit, including interviewing destination management companies and looking at potential properties.

2 years out: Finalize the locale and select the hotel.

1 year out: Visit the site and meet with the hotel staff and the convention services manager. Spend a day with a couple of DMCs, collect proposals, and choose DMC. Choose, book, and block the activities after getting costs from vendors post — site-visit.

6 months out: Choose speakers. “If you try to book an entertainer more than six months out, they may end up changing schedules on you. At six months out, you'll still be able to book them, but their schedules are set enough that they'll most likely stick with it,” says Ken Pickle, CPCU, CMP, Safeco's manager, incentives and conferences.

3-4 months out: Launch campaign with full promotional mailers, including DVD or video with a teaser for top agencies. Establish link on the agent Web site to the Conference of Champions site.

90 days out: Final tweaks on F&B, select final menu. If the CSM or other key employees have left, get to know the new hotel staff and fill them in on any special requirements.

On site, post-con: Review final accounting, process gratuities, pack up shipments.

Immediately post-con: Do post-con attendee evaluations.

4-6 six weeks post-con: Review final accounting again against the backups, pay bills.

Planning Tips

  • Rearrange chairs if you have an exodus after the opening session to make the room look fuller, so that the speaker doesn't become demoralized by seeing a smaller crowd.
  • Truck meeting materials shipments back home rather than flying them to save on expenses.
  • Tell qualifiers that the sooner they send their registration forms in, the better the guest room they'll get. That way, if they're not happy with their room, they have no one but themselves to blame.
  • Bring health and safety specialists to the 90-day-out pre-con site visit. Have them try out the activities and evaluate them for potential problems.
  • Send the full promotional mailers only to the top agencies most likely to qualify — and send postcards to the rest to save costs.

Heard at the Conference

The beauty of being on site at the Banff Conference of Champions was having the opportunity to hear what the agents really thought about the program. Here are just a few of their comments:

“I'm going to sell my *@# off to get to Barcelona!”

“My wife is my main motivator. When we got the mailing for Banff, she just about beat me over the head every day until we earned the credits to come.”

“Yeah, it's our annual vacation, but it's more than what we could ever do on our own. Sure we could plan a trip to Banff, but we wouldn't have the dinners, the receptions, the networking with other agencies and the company — all the extras that we get here.”

“Is this an incentive to spur me on to sell more next year? You betcha! Is this a reward for doing so good last year? You betcha! I'd say it's about 50 percent motivator, 50 percent reward.”

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