By Elisabeth Boone, CPCU
Whether you've been in the independent agency system for two months or two decades, you've undoubtedly heard endless repetitions of the same refrain:
"We have to regain the market share we've lost to direct writers."
Trouble is, no matter how many times you sing that tune, nothing changes--except the amount of marketshare going to competitors, which continues its ominous upward spiral. Without action, the words are nothing more than a lamentation about the bygone days when independent agents reigned supreme.
As we stand on the cusp of a new millennium, the independent agency system faces a harsh reality: its marketshare continues to erode, while the opposing army continues to swell its ranks. No longer composed only of direct writers, the competition now encompasses a host of alternative markets, banks, and other big new kids on the block. What's more, today's savvy consumers aren't unquestioningly accepting the idea that it's worth paying a higher price to deal with an independent agency simply because it represents more than one company. People don't want slogans and shibboleths--they want a painless insurance transaction that provides coverage, service and value, without the high-flown rhetoric.
What's next for independents?
In light of these facts, should independent agents just fold their tents and steal into the night?
No way, says Russell Granger. A veteran of the independent agency system, he is president of ProEd (formerly Insurance Learning Systems), an educational consulting company he established in New Jersey in 1981. Before that he spent 24 years with Kemper as a marketing executive for New Jersey and the East Coast. With all that experience under his belt, Granger knows the independent agency system--and he believes that a joint effort between his company and the Independent Insurance Agents of America offers a realistic opportunity for independents to turn things around in a big way.
Sure the direct writers are good at what they do, Granger says. He should know: his company developed sales training programs that significantly boosted volume for heavy hitters such as Prudential, Liberty Mutual, American Family, and other household names. Working with the Big I, he's created an integrated package of training programs that are designed to teach the same principles and skills to each segment of the independent agency distribution system: agents, CSRs, agency managers and sales managers, and company marketing reps and underwriters.
Sound ambitious? It is.
"The Big I wanted to help independent agents improve their sales production and make everyone in the distribution system better at what they do--and more profitable."Russell Granger, president of ProEd
Allies, not antagonists
Have you ever entertained the suspicion that the various components of the independent agency system are not allies but adversaries? There's not only the sometimes barely concealed antagonism between agencies and insurers...but also the frequently strained relations between agency managers and producers, not to mention the resentment engendering miscommunications between producers and the agency's CSRs, who are supposed to provide sales support but often find themselves doing everything but.
"A house divided cannot stand," said Abraham Lincoln; and the same is true of the independent agency system. That's why a key element in the sales training system developed by Granger and endorsed by IIAA is a top-down commitment to partnership. Each part of the system is vital to the success of the whole system--and each player must know his or her own role, understand how it interacts with the roles of others, and focus on jointly establishing and achieving goals.
Creating a sales culture
A major difference between the hard-charging direct writers and the independent agency system, Russ Granger believes, is that "the direct writers recognize the importance of sales and marketing, and they've done something about it." The independents, he asserts, "need to re-create the sales aggressiveness of the past." Critical to this endeavor, he says, is the establishment of and commitment to a sales culture. "We're not in the insurance business--we're in the sales business," he points out.
What are the specific benefits of establishing a strong sales culture in the independent agency system? Granger cites these key factors:
1. Increased confidence, engendered by the ability to work smarter, not harder
2. Development of the competencies, skills, and behaviors that will give partners in the independent agency system the real-world results they seek
3. A transition from just quoting business to selling it, which in turn will allow the agency owner to:
a. Grow the business
b. Grow profits
c. Grow his or her own income
"Best Practices" in action
In December 1996 and January 1997, Rough Notes published a two-part series detailing the rationale for and elements of the IIAA's Best Practices initiative to help independent agencies identify their strengths and weaknesses; implement improvements where necessary; and move into the future as stronger, more efficient, and more focused sales and service entities. The nine characteristics of a Best Practices agency are reproduced on 28.
The Best Practices program was formally launched in 1993, and since then many agencies have successfully applied its principles and procedures to their own operations. "The Big I wanted to help independent agents improve their sales production and make everyone in the distribution system better at what they do--and more profitable," Granger says. "The missing piece was a training system that would meet Best Practices needs and standards."
Granger and the ProEd staff created a fully integrated set of training and performance programs for the entire sales and marketing team in the independent agency system. The programs are known collectively as the Four Corners Training Package. The name, Granger explains, reflects the fact that the programs bring sales "best practices" to what he identifies as the "four corners of the insurance world":
1. Agents
2. CSRs
3. Agency sales managers
4. Company marketing reps and underwriters
The first three programs have been endorsed by the Big I and are being built into its Best Practices series. The programs for agents and sales managers are based on successful training courses developed in the 1980s under the name PRISMS: Productive Results from Insurance Sales and Marketing Systems. PRISMS, a joint effort of ProEd and AT&T, is based on extensive research conducted by organizations such as Prudential and AT&T's University of Sales Excellence. The programs are interactive, using videos, workbooks, and overhead slides. Training can be conducted by the client using materials provided by ProEd, or by ProEd staffers. For those who choose the first option, Granger emphasizes, "The leader materials are idiot proof. Also, the training is portable--it can be delivered anywhere."
Now let's take a closer look at each of the programs offered in the Four Corners Training Package.
Agent
The program developed for agents, PRISMS II: Insurance Selling Skills, is a three-day insurance sales workshop designed to help agents increase premium, policy count, and commission. Producers learn to achieve these improvements by enhancing partnering skills and making more productive use of their time. The program starts with Prework, in which the agent focuses on actual insurance products and real-world prospects. During the workshop, participants develop an Action Plan to sell the account identified in the Prework. The session teaches the following skills:
* Goal setting and planning
* Leveraging sales time
* Prospecting
* Account gradation
* Partnering and teamwork
* Communication
* Needs profiling
* Presenting solutions
* Negotiation
* Objection handling
* Closing
Also included in the workshop is personal skills training that addresses communication skills, time management, and problem-solving issues.
Sales Manager
A one-day workshop called PRISMS for Sales Management helps agency owners, principals, and sales managers learn strategies and tactics for achieving the maximum productivity from agents. Focusing on the sales management process, this session covers:
* Managing vs. selling
* Goal setting and business planning
* Execution
* Evaluation
* Feedback
* Staffing
An optional unit on staffing is designed to help participants define the salesperson's job, identify success predictors, locate and interview candidates, and evaluate their performance potential.
CSR
Designed for customer service representatives, ServiSell is a one-day workshop that emphasizes partnering, persuasion, and selling skills to help CSRs identify and meet customer needs. The program is intended to teach CSRs how to successfully sell renewals, add coverages, and cross-sell policies. Skills taught in the workshop are:
* Goal setting and planning
* Partnering
* Communication
* Presenting solutions
* Objection handling
* Closing
Marketing rep, underwriter
The fourth essential element in the Four Corners Training Package is Marketing to Agencies, a three-day workshop designed to help company marketing reps, underwriters, and marketing underwriters develop quality business from desirable agencies. Organized in three parts--Prework, Workshop, and Action Plan--the program addresses:
* Goal setting and planning
* Leveraging time
* Partnering
* Communication
* Presenting solutions
* Negotiation
* Objection handling
* Closing
* Teamwork and leadership
Also offered is an optional unit on appointing new producers and getting them into profitable production.
The vital ingredient
In the Four Corners approach, Granger emphasizes, there's no room for the kinds of adversarial relationships that sometimes have impeded the success of independent agencies and insurers. Instead there's a strong focus on partnership, and on recognizing the value added by each member of the insurance sales team. Within the agency, the owner, principal, or sales manager works in partnership with producers, who in turn form partnerships with CSRs. The agency as a whole is a partner with each company it represents, and it builds productive relationships with marketing reps and underwriters. Direct writers and other competitors don't waste time or resources engaging in turf wars; and if independent agents are to reclaim lost marketshare, Granger says, they'd better play by the same rules.
What about follow-up?
Almost everyone in the independent agency system has attended a seminar, workshop, or class and learned a dynamic, sure-fire new way to make cold calls, overcome objections, improve efficiency, or otherwise do things better, faster, cheaper. But what happens when the session is over and you're on your own? Often the answer is: Not much. Without follow-up, even the best-conducted training is likely to fail once the participant re-enters the real world.
To combat this tendency, ProEd created a follow-up program for sales and marketing people called SalesCompass. Endorsed and offered by IIAA, this program helps participants stay on track and incorporate the skills they've learned into their daily routine. Users are guided to define three sets of long-term goals--personal, business, and sales incentives--then learn how to schedule their weekly activities to focus on achieving those goals.
For salespeople in virtually all industries, Granger notes, major surveys have shown that the most important issues are time utilization and planned sales efforts. "SalesCompass," he explains, "is a real-world tool to guide insurance salespeople in these two vital areas." Built into SalesCompass, Granger continues, is a condensed review of the sales process that the individual can use before a call to refresh himself or herself on appropriate techniques for, say, closing or handling objections. The program also includes a call plan sheet so that the salesperson can create a blueprint for handling a call, and a call evaluation sheet that provides objective criteria for determining the success of the call.
Company support
The Four Corners program, specifically designed to reestablish and foster a sales culture in the independent agency system, has the look and feel of a winner. With focused, no-nonsense training that has powered the sales efforts of top direct writers, plus the solid backing of the IIAA, how can it lose? Russ Granger's response is blunt: "The key to success is companies. Without company support, the program will die."
By support, Granger doesn't mean money. On the contrary, he believes that the Four Corners program is more meaningful to agents when they pay for it themselves instead of having it subsidized by an insurer. Rather, he sees the companies' role as motivating and encouraging everyone--underwriters and marketing reps, agency owners, managers, and CSRs--to participate in Four Corners as a way of investing in the success of the entire independent agency system.
To help companies advocate effectively for the training, ProEd has created sponsor kits that companies can distribute to agents, highlighting the benefits of participation and listing the locations where training is available. Aetna, Chubb, Kemper, and Travelers already have made a commitment to Four Corners, Granger says, commenting, "When companies of this stature say they're going to support a program, they get their agents to come."
"If you build it, they will come." Sound familiar? Perhaps in the Four Corners program, the independent agency system will truly find its own "Field of Dreams." *
1. Focus on customer service and satisfaction through both formal surveys and informal inquiries about customers' perceptions of how the agency is meeting their expectations and how it might improve service.
2. Frequent customer contact for the purposes of educating the client, building the account, explaining new products and prices, serving as consultant and problem solver, and making each contact pleasant and productive.
3. Valued staff. Employees are given the education, training, and tools they need to do their jobs. They are expected to perform at high levels and to grow personally and professionally, and their accomplishments are rewarded, recognized, and celebrated.
4. Participatory management. Top managers are involved in day-to-day operations. They share financial information and make sure that employees understand profit expectations. Employees have the authority to exercise their responsibilities and have input in planning and budgeting.
5. Vision. The agency has a clear mission statement that focuses on the customer; the mission statement is shared with and understood by every member of the staff.
6. Win/win supplier relationships. Agencies seek partnerships with insurers that share their vision and values. They take part in joint planning and make sure each partner keeps its commitments. The principles that govern agency-company relationships are trust and respect.
7. Efficient processes. With or without automation, agencies streamline workflows for the benefit of both employees and customers, and strive "to do right things right the first time."
8. Total account development by actively soliciting existing clients, as well as establishing referral relationships with other businesses, such as real estate brokers and lenders. It's well known that account development dramatically improves retention of business.
9. Continuous improvement. Always seeking ways to be better, agencies continually measure their performance against past performance, as well as against that of competitors and successful non-insurance enterprises.
©COPYRIGHT: The Rough Notes Magazine, 1998