And what are you going to do about it?
I’m sure you’re familiar with the opening line of Charles Dickens’ A Tale of Two Cities: “It was the best of times, it was the worst of times …” I believe this may apply to today’s independent insurance agencies, as well.
It’s the best of times because agency values have never been higher and the United States economy is doing very well. But it also may be the worst of times for some or all of the following reasons:
- Declining market share in certain areas
- Shrinking commission rates
- Increased competition from direct writers
- The growing challenge to find new sales and service talent
- Anemic pipelines
On top of all that, there’s digital disruption in both commercial and personal lines. Although this is something that was barely recognized a decade ago, there are now hundreds of companies worldwide that are developing digital distribution for the insurance industry.
… growing numbers of agency principals are feeling the pressure and becoming dissatisfied with their business. Many have lost personal freedom because they’re working harder than ever to stay ahead of the escalating competition.
As a result of these and other trends, growing numbers of agency principals are feeling the pressure and becoming dissatisfied with their business. Many have lost personal freedom because they’re working harder than ever to stay ahead of the escalating competition.
That’s why I frequently ask them the following question: “What frustrates you the most in your agency today?” I can tell you, the list is endless! What’s more, the inability to overcome these frustrations is making a huge number of agency owners miserable.
At the same time, too few are willing to invest the time, energy and money needed to improve by resolving the cause of their frustrations. It’s possible they don’t really grasp the long-term effects of doing nothing.
So, my question to you is two-fold: Overall, are you happy or are you frustrated? If you’re happy, that’s great! If you’re frustrated, what’s causing it? For most agency owners, it boils down to one or more of the following:
- Your true organic growth
- Your current profit margins
- The agency’s overall team
- The carriers you represent
- Your agency’s automation system and how well it is utilized
- Your contingency income
- Your professional reputation (Are you a trusted advisor or a commodity broker?)
- The client experience your team delivers
- Your perpetuation plan
- Your day-to-day life
While writing this article, I remembered one of the earliest lessons I learned in this business. A sign on a break-room bulletin board at the office of one of my first consulting clients read: “One of the worst things that can happen to a person is to wake up at age 65 and realize they never really hit their potential and then realize it’s too late!”
As all of you know, this is a great business! You really don’t have to do much of anything I’ve written
about and shared with you over the years and you’ll still do okay. Actually, you’ll do way better than okay and certainly much better than many who work longer hours at more stressful jobs.
Recently, my wife and I took a two-week Mediterranean cruise on the Regent Seven Seas. Thanks to the exceptional accommodations, food, staff and service that the cruise line provided, we enjoyed an outstanding customer experience (one that I plan to repeat in the future!). Our suite was located one deck below and just aft of the command bridge, which gave us a bird’s eye view of the docking process each time we came in to port. We were awestruck by how expertly (and seemingly easily) the captain and crew maneuvered such a massive vessel! This got me thinking about the scope of a captain’s duties.
Besides being responsible for the lives of hundreds of guests and crewmembers, a cruise line captain is responsible for the safety of the actual ship. With so much at stake, I figured that they must make a ton of money. So I asked my friend Siri, “How much does a cruise ship captain earn?” The answer, depending on the size of the ship and a few other factors, was in the range of $150,000 to $180,000 annually! That’s all?! A semi-good producer makes a lot more than that.
Yesterday I spoke with an agency owner who, from a pure business perspective, is doing a very poor job of leading and growing his agency. Even so, between what he takes out in a draw and receives in contingency income, he’s making upwards of $400,000 a year and has fewer than 15 employees!
Sure, it’s coming in the front door and going out the back, but still, he’s making a lot of money! Now compare that to what the captain of a cruise ship makes and tell me who has the better job.
But if these are the best of times, isn’t it time to maximize your revenues, your profits and your agency value? Isn’t it time to stop losing millions of dollars in value? Remember, everyone eventually leaves their business. Why are you leaving millions on the table?
Isn’t it time to stop living on “Someday I’ll”? (“Someday I’ll make this change/ implement this program, but right now I’m just too busy.”) Isn’t it time to finally implement a sales process that changes the game, that changes the conversation from quoting to risk management? One that truly differentiates you from the competition? Here’s my litmus test: When talking with future clients, if you don’t hear some form of wow, you’re playing the commodity and “me too” game.
Are you chasing suspects and prospects or Future Ideal Clients? It’s going to be tough to succeed if you and your producers don’t know exactly what your Future Ideal Clients look like and if you haven’t come up with an actual list of them (not a suspect or prospect list). This is a simple approach (Remember KISS: Keep It Sitkins Simple) that really works. But you have to actually do it.
Certainly, creating a Future Ideal Clients list takes work, but so does practice quoting and chasing prospects that say, “Sure you can give me a quote? We’re always looking to save money and keep our current agent honest.” To avoid that, you need to know exactly who your targets are and how you’ll reach them. This requires things like research, practice, preparation, and developing and following a process. Otherwise, every prospect—even the mirror foggers—seems like a good one. (Of course, you never know; you might get lucky.)
Here’s a challenge for you. Get away from all the noise and activity around you and invest 1/168th of your week (that’s just one hour), just one time, and think about those things you’re happy with and those things that frustrate you. Next, answer a simple question: What are you going to do about it?
This is a very worthwhile exercise that will create some much-needed clarity about the journey you should be on. In fact, I believe this is so important that I’ve created a tool to help agency owners think through this process and create some solutions for their agency. You can receive it, with my compliments, if you’re among the first 100 readers who visit www.sitkins.com/p/roughnotes.
I’ll even include a completed sample for your reference.
You may recall an article I wrote earlier this year about “The Circle of Choice.” It discussed the importance of focusing on the things within our control that drive great results. Similarly, you have a choice to either be happy or frustrated with your agency. I believe that it’s time you chose to make this the best of times for your agency.
Roger Sitkins, CEO of Sitkins Group, Inc., is the nation’s number one “Agency Results Coach.” In addition to establishing The Sitkins 100™ and Sitkins International, he is the creator of The Vertical Growth Experience™. His latest offering is The Better Way Agency, a web-based training program that shows agency owners ways to make significant improvements in all areas of the agency. To learn more, go to www.thebetterwayagency.com.