This month I’m going to focus on those behaviors and strategies that literally can and will multiply your agency’s results. The reality is that, ultimately, it’s all about results! I believe that every agency owner wants to multiply his or her actual results, with the possible exception of those who own so-called “lifestyle agencies,” in which their personal and corporate checkbooks are one and the same. In those kinds of agencies, it’s less about building an asset than about supporting a lifestyle, which is okay.
The results we look for fall under the category of Key Performance Indicators (KPIs): Total Revenue, Net Organic Growth, Operating Profit, Retention, Revenue per Employee, Spread per Employee, Conversion Ratio, Closing Ratio, Revenue per Relationship, Revenue per Validated Producer, and Percentage of Full-Time Clients, among others.
These KPIs are all numbers and, as I hope you’ve absorbed from this column by now, numbers cannot be managed. They are strictly the outcome of the behaviors and strategies that dominate your agency’s way of doing business. So let’s examine the key behaviors and strategies that will have a multiplier effect on your agency’s results.
Differentiating sales process
Sure, we’ve discussed this before, but what is your unique sales process? I’m constantly amazed at the lack of differentiation in the selling processes of independent agencies. The best ones have a branded, specific sales process that is trademarked and unique to their agency. It drives what they do and how they do it.
Unfortunately, most agencies have no story of differentiation and are still relying on the “look, copy, quote and pray” approach to selling. Their “process” is little more than sporadic activity driven by copious notes on a legal pad. They continue to provide unpaid consulting, practice quoting, and price-only selling, followed by wishing and praying. The crazy thing is that they still do okay!
On the CNBC show The Profit, host and billionaire businessman Marcus Lemonis uses his expertise and cash to save failing businesses. To make the struggling businesses viable, and to make himself a profit, Lemonis constantly stresses his 3 Ps: People, Process and Product.
Similarly, in the ProducerFit Sales Training program, our 3 Ps are Purpose, Process and Payoff. Together they tell the client what to expect from you. For example:
“The Purpose of today’s meeting is…”
“The Process we’ll go through is…”
“The Payoff for you, the client, is…”
At your next sales meeting, ask your producers to name your agency’s 3 Ps. What would you say they are? What is the unique selling process that differentiates you from all other “me too” competitors? More important, what’s in it for the prospect? If the only answer is, “We’ll save you money,” then you’re still a commodity broker. Having a differentiating story helps get you out of the commodity game.
Commitment to preparation and practice
Being relentlessly prepared for every opportunity is a huge multiplier! Another multiplier is always to operate with the attitude that “every event deserves my very best”. How well prepared are your producers for every opportunity? Do they conduct up-front research on every prospect? Do they know the common underwriting problems in the classes of business they’re pursuing? Do they take the underwriter’s view of every commercial prospect? Do they know the first three risk-based questions they’ll ask in the first meeting with a particular prospect? Typically, the answer to each of these questions is “no”. Most producers are simply not properly prepared.
Further, in the vast majority of agencies, practice is either lacking or nonexistent. I assume you know the difference between Low-Risk and High-Risk practice? Low Risk is in the office and High Risk is in front of clients, prospects and centers of influence. Do you demand that all presentations be rehearsed? Is role playing a part of every sales meeting? Do your producers consistently practice their selling skills and telephone skills? I know you’ve heard it here before, but it bears repeating: Hearing and/or seeing is far different from actually doing!
Pipeline development and management
Once you have the basic in place, you should focus on pipeline volume and the quantity and quality of At-Bats (first appointments). This is another huge multiplier and involves the following steps:
- Defining what your future ideal clients look like.
- Identifying specific suspects.
- Marketing to those suspects to create prospects.
- Implementing strategies that create At-Bats. (Note: Aggressively waiting for the phone to ring or the email to arrive is not a strategy!)
How much of your time and resources are dedicated to creating overflowing pipelines? Do you have more opportunities than time? At least once a month, your sales leader or chief revenue officer should review each producer’s pipeline. The reason for this is best summed up in two of my favorite quotes: “What’s inspected is respected,” and “What gets measured gets done”. In other words, accountability is critical to maintaining overflowing pipelines.
Maximize staff productivity and technology
Did you know that the average agency uses only about 50% of its automation system’s capabilities? And that’s not including the other technological tools that are available today that most agencies underuse. The resulting cost is considerable, particularly in terms of productivity. That’s why having the best processes in place, ones that are actually followed, and maximizing the use of technology are powerful multipliers.
Several years ago, I saw a study that showed the average professional services firm had a payroll productivity factor of only 63%. This means that for every $1 million of payroll, the firm was achieving only $630,000 in productivity! If you refer to my previous comments concerning Revenue per Employee and Spread per Employee and then look at the Best Practices Study, you can see how you compare with the average Best Practices Agency. If you have never looked at that, you should!
Exit barrier strategies
We all know that one of these beauties of this business is that your clients buy insurance every single year. So it’s evident that one of the keys is not just obtaining clients, it’s retaining them. What client exit barriers do you have in place and monitor? The basic exit barriers I always discuss include Full-Time Clients, Relationship Management/Client Experience, Continuation Process (not renewal process), and membership on the client’s Trusted Advisor Team. Once again, I know you’ve heard this before, but what have you done about it? If both your Client Retention and Revenue Retention are below 95%, why is that and what are you doing about it?
Planning and accountability
Fewer than 10% of independent agencies have a true Strategic Business Plan (SBP), while 100% of the highest achieving agencies have one! It’s pretty obvious that having a plan and holding people accountable to do what they say and agree upon is a huge multiplier! Agencies that establish a culture of accountability usually have very predictable results that are essentially guaranteed. This theory assumes that you have the right people. Accordingly, a culture of accountability never allows the “this too shall pass” mindset of average employees at average agencies.
Holding people accountable to do what they say they are going to do multiplies your results at the highest levels. Why? Because I’ve never heard any producer say, “I’m going to have an empty pipeline, a terrible closing ratio and retention of less than 80%, write smaller and smaller accounts, not embrace technology and be an incredibly bad team member this year!” Yet when salespeople are left to their own accord, that can and does happen.
Service personnel also must be held accountable. I’ve never heard a service person say, “I’m not going to follow the processes, embrace the new technology or round out my customers, and I plan to provide a terrible client experience and suck the energy out of every team meeting this year.” And yet again, that can and will happen when service people are not made accountable.
Note: If a current employee came to mind as you read the two paragraphs above, I strongly suggest you take immediate action!
The bottom line
Obviously, these aren’t the only agency results multipliers. But as we enter the fourth quarter of the year, it’s vitally important to identify what will become the top three multipliers for your agency in 2019 and beyond. It’s The Better Way to help your agency succeed.
Article by: Roger Sitkins