Many independent agents assume that the most effective way to increase personal lines sales and profitability is to sell on price alone; but while this strategy may increase sales temporarily, it is unlikely to help you achieve your long-term goals. There always will be a company that can underprice you.
The independent agent illustrates the need to think ahead, placing the client in a position of a loss, and then selling the need for the best policy as opposed to the best price. As professional agents, we must position ourselves in the marketplace as advisors, much like attorneys or CPAs. The customers with whom we prefer to do business understand there is a price to pay for professional, expert advice.
In order to really penetrate the competitive personal lines market, you must start really selling yourself and your product. The best way to do this is to do it simply, narrowing your sales approach by focusing primarily on two things: why people would want to buy your product/service over that of someone else, and increasing your sales volume.
Why should they buy from me?
You must ask yourself why, among the hundreds of thousands of agents out there, you are the best choice. As an agent, you probably have deeply held convictions about insurance and the products you sell. You understand that insurance can change lives, and you have to convey this message to your customers.
In personal lines sales, your highest priority must be to differentiate your product and service from the rest. The first step in doing this is to believe in that product/service and to reinforce to your customers the ways in which both you and your product stand out.
The majority of customers who purchase insurance via an independent agent do so because they want good claims service and a comprehensive yearly review program (to ensure consistently adequate coverage). As agents, we take time to tailor insurance programs for individual clients' needs. We also provide caring, compassionate claims service, as we are usually the first people the insured contacts following a loss.
I make sure that we convey to our clients how important we find these two services to be. The annual review provides preventive comfort to the insured, and claims service offers assurance of protection when losses occur.
Always make presentations in person
In order to increase sales, it is essential to stand apart from the competition by offering an element of customer service that is above average. The best way to achieve this is always to make your sales calls in person. Never sell insurance over the phone.
Of course, you will encounter a number of logistical complications in pitching only in person. I manage this inconvenience primarily by beginning my appointments at 6 a.m. daily. The majority of our clients are business professionals; these people appreciate that we are up as early and working as hard as they are to run their own businesses. We also make telephone contact calls during the day, which usually guides customers to set their appointments during daytime hours.
In-person sales are extremely important in setting your agency apart. You will find it well worth the added effort and extra time expenditure.
Volume is critical
Maintaining large numbers of prospects is essential to sales success. Not only is it important to maintain a broad list of potential clients, but it is also vital to ensure they are the right people. The right people are those who believe in insurance and who buy for personal service. You must have a large audience, an audience you have targeted with care.
You must have a streamlined system in place for obtaining names of good prospects. I use (and highly recommend that all agents use) an agency contact representative, or ACR, to head up this operation. Your ACR, whose primary duty is to target potential clients, should be a trusted employee who maintains a positiveattitude in the face of failure or when meeting resistance.
The ACR will develop an abundance of pre-qualified leads. In order to pinpoint the right buyers, the first thing the ACR will do is eliminate price shoppers. It is important not to waste time trying to sell to people who would rather buy a policy over the telephone or the Internet. As agents, we do more than provide quotes, and we must locate customers who require more than a premium quote.
Your ACR will quickly identify price shoppers and discard them from the list of prospects. The easiest method for identifying price shoppers is to be aware and to note that most of them request and even demand price quotes over the telephone; at this point, the ACR can simply refuse to entertain their request. If it is clear you cannot help someone, you must be willing to say no, as it will save your agency time and money.
Maintaining and increasing your client base
You must have a routine for establishing your list of prospects, and a process which allows the list to constantly evolve and expand. You will find that your list increases as a result of two primary factors: referrals from current clients, and cross-sales to existing clients.
One way to ensure a constantly growing client list is always to keep an ACR busy scheduling new business calls with friends, family and acquaintances of your existing, loyal clientele. If you are providing an unusually high level of customer service, you will soon have referrals coming to you.
Cross-selling is the second primary way to add to your base. You can target existing clientele with an additional line of insurance; we do this with a "target market," in which we bring the client into the office and educate him/her on a new line. We also provide product information to clients during their annual reviews. Seventy per cent of our sales are generated internally through our review program, and 68% of our clients have multiple lines of insurance with our agency.
My agency, TKS, has grown from a client base of 1,500 accounts seven years ago, to over 6,300 today. We have seen this constant growth because we have consistently applied specific systems that allow us to maximize our time and effort.
Our ACR dials the telephone no fewer than 40 times each hour. Of 160 calls, an average 20 appointments are scheduled a day. The agency averages 80 appointments a week, and 320 appointments a month, resulting in an average 83 policy sales a month.
You must always remember--if you optimize your efforts with specific sales techniques, you will succeed. *
The author
Troy L. Korsgaden has twice been named "Agent of the Year" from among 14,000 Farmers Insurance agents. He is a frequently featured motivational speaker at industry events and has trained nearly 30,000 insurance agents and staff across the country using his industry-specific manual and seminar program, "Achieving Success in Agency Management." His recently released book, Power Your Agency; The Independent Agent's Guide to Sales Success, explores, in-depth, strategies for growing and retaining insurance agency business. For more information, call TKS,(800) 524-6390 or fax the company at (209) 625-1603.
©COPYRIGHT: The Rough Notes Magazine, 1999