For the last 23 years, I have been observing the "The Good, The Bad and The Ugly" among agency producers. This month, I would like to share with you the 10 most common mistakes I see insurance sales people continue to make.
WINNING STRATEGIES
By Roger Sitkins
For the last 23 years, I have been observing the "The Good, The Bad and The Ugly" among agency producers. This month, I would like to share with you the 10 most common mistakes I see insurance sales people continue to make.
Common Mistake #1: Not Qualifying Your Prospects
All too often we see that producers will quote anyone who can "fog up a mirror." They literally will work on accounts that have said to them: "Sure you can give me a quote. I'd like to keep my current agent honest."
This results in a ton of "Practice Quoting." I define practice quoting as "the art of providing a quotation to an unqualified prospect in order to force the incumbent agency to lower its price while retaining the account."
To solve this problem, the agency and agent must clearly and quickly determine the "Rules of the Game." That is, they need to ascertain exactly what it will take for the prospect to move its account. What are the problems that need to be solved and what are the Value Added Services that need to be provided? In addition, they need to determine a mutually agreed upon targeted premium range.
Once all of these "rules" are discussed and agreed upon during the first meeting with the prospect, the producer must send an "As we agree ..." letter. This letter spells out the agreements you have made.
The thought process here is: "The best day to lose the sale is the first day."
Common Mistake #2: Empty Prospect Pipelines
I am often asked why producers will waste time working on accounts they know they'll never get-- why they "shoot themselves in the foot" so many times. My response is simple. The reason most producers work on bad accounts is that they don't have anything better to do!
Because producers have empty pipelines, they will work on anyone who is willing to let them "quote." What you wind up doing is giving a "Free Estimate."
The bottom line is that producers need to build their careers around their best clients. They need to do those things that earn them referrals from these best clients. A strategy I teach is "one equals two." Every great client you have will eventually lead you to two new clients!
Earning and generating referrals and filling up the pipeline to the point of having more opportunities than time must be viewed as a Non-Optional Behavior in your agency!
Common Mistake #3: Not Listening to Your GUT
How many times have we heard or said: "I should have listened to my gut. I knew I was getting used!" I like to think of your gut as "God's Early Warning System." When your gut tells you something, don't be so in love with the potential commissions that you lose all perspective. Learn to listen to your gut and use it to your advantage.
Listen to your gut, it's always right!
Common Mistake #4: Too Much Time in Service
Our studies show that the average producer spends less than 25% of the time in true sales-related activities. The vast majority of producers' time is spent in service work. If you recall from an earlier article, I have developed The Ten Great Plays(TM) for insurance sales. The first play (strategy) is making a strong division between your sales and services activities. Until that happens, your producers will always be buried in service.
Your agency needs to understand the power of the account manager's (CSR) function and clearly define the roles. Producers should focus all of their efforts on the four key money-making activities--Sales, Proactive Renewals, Client Relationship Management, and Referral Generation. All day-to-day service, everything that happens in between renewal dates, is the responsibility of the account manager.
From a producer's point of view, 90% of what they do out of the office is better than 90% of what they do in the office!
Common Mistake #5: No Minimum Account Size
Most producers have the Godzilla Attitude--they'll kill (write) anything that moves. When we complete our Critical Indicators analysis on our clients, we always review the Revenue per Relationship on the producers' "A" Accounts (Top 5%), "B" (Middle 15%) Accounts and "C" (Bottom 80%) Accounts.
A typical producer's book will result in the "A" Accounts averaging $10,000 of commission income each, the "B" Accounts averaging $2,000 of commission income each and the "C" Accounts averaging $250 of commission income each.
Producers are always amazed when they see their own numbers. (I challenge you, readers, to look at your own numbers; you'll be amazed.) Think about it; 80% of the clients averaging only $250 each!
The producer must draw a line in the sand. You've got to establish your Minimum Account Size (MAS) and then never violate it! Clearly, the size of your income is directly tied to the size of accounts you personally handle.
Common Mistake #6: No Relationship Management
Most producers give only lip service to the concept of relationship management. I believe there are five types of relationships that need to be managed: clients, prospects, insurance companies, team members, and centers of influence. Each type of relationship needs to have a formal program in place. You need to determine, in each type of relationship, "The Vital Few" vs. "The Trivial Many" relationships and then have a laser-like focus on improving the relationship.
The goals in each are simply:
* Clients become advocates for the producer and the agency, and the producer is a member of the clients' Trusted Advisor Team.
* You have a formal list of your Top 20 Prospects and are running an MVP (mail, visit, phone) program.
* Your best insurance company relationships are identified and you have a "Buddy System" in place.
* All of your team members (employees) feel they are part of a high-performance team.
* Your have identified at least 10 centers of influence and proactively market to them.
Common Mistake #7: Focusing on Product and Price
Many producers still focus all of their sales efforts on product and price. They set themselves up for "price only" selling by saying things like, "I'd like to give you a quote; I think I can save you some money."
Any average producer can sell based on product and price; it takes a true professional to sell based upon Value Added Services and Solutions.
The best agencies and producers have a clearly identified list of the Value Added Services (VAS) they provide to their best clients. All of their sales efforts and renewal efforts focus on providing the VAS, not products and price.
Common Mistake #8: No Renewal Process
I am often amazed at the almost total lack of renewal process in the average agency. One of the great joys and benefits of an insurance sales career is the ability to get paid each year from your clients. Yet, I see way too many agencies and producers stumble through the renewal process.
The real key here, I believe, is to follow the strategy that says, "We do not renew accounts; we continue relationships!" In the May 2000, Rough Notes issue, this column addressed the need for the establishment of a "continuation process" in your agency.
It starts at policy delivery by asking the client, "What has to happen over the next 12 months for you to guarantee me that we'll continue our relationship again next year?"
The answer to that question becomes the "Renewal Rules of the Game" and should be documented to the client in a follow-up letter.
Common Mistake #9: No Sales Process
The average agent's sales process can best be described as hysterical activity on the way to the grave! I see most agencies still following "The Old Way" of selling--look, copy, quote, get lucky.
They come in to look at the current policies, take copies of the policies, shop the account to the marketplace, provide a quotation, and then get lucky on about two or three out of 10.
The sales process and strategy we teach is based upon a specific four-step formula:
1. Referral Generation--Become a referral-only producer
2. Diagnostic Appointment--An off-season visit to super-qualify the prospect
3. ProView Appointment--Your data gathering appointment
4. Presentation of Solutions and Services--Not a quote, a presentation of the solutions to the mutually agreed upon problems.
This process is designed to either get out early (super qualify) or open a new relationship (close the sale) and nothing in between.
Common Mistake #10: Center of Influence Network
As was mentioned above, one of the most important relationships that needs to be managed by the producer is centers of influence. When you get to the point where you have 10 centers of influence each of whom is each sending you one great referral a quarter, life is great!
Make the deposits that continue to "WOW!" these centers of influence. Have a quarterly breakfast with them, keep them advised about all the changes happening in the industry, put them on your newsletter list, refer clients to them. Do whatever you can to earn referrals.
Remember, a referral from a center of influence almost always carries a 100% closing ratio!
Those are The Ten Most Common Mistakes that I see. How do you stack up and what changes are needed on your part?
As always, it's your choice. *
The author
Roger Sitkins is the president of Sitkins Group, Inc., Fort Myers, Florida. Sitkins Group has provided services to more than 2,000 independent insurance agencies, helping them to "force vertical growth" in their sales and marketing arenas, while quantum leaping profitability. Sitkins is the inventor of The Vertical Growth Experience, which calls for agencies and their producers to experience growth of 15% to 25% or more in the closing ratios, revenue per relationship, revenue per employee and operating profits. He can be reached at (800) 647-0966.