PRODUCER-RELATED ISSUES
Getting clients to commit means
being assertive and proactive
By Michael J. Weinberg
Whenever I hear a salesperson in any industry say, "I delivered the proposal and now I'm waiting to hear whether or not I got the order," I always laugh to myself, unless, of course, it is one of my agents who made such a statement. Then, I cry.
The reason is quite simple. I truly believe that when you are driving to a prospect's office with a proposal in hand you should know well before you get there whether or not you will make a sale. And it has been my experience that if you don't know whether or not you have a sale before you present your proposal, the odds are ten to one that you won't make the sale.
How can I make such a statement? It's simple. If you do your "job" up front, then you will obtain the necessary commitment to justify working on the account. If you haven't, then you are probably wasting everyone's time. And that "job" is to find out what it will take to get the business. Without a firm commitment, you are probably just engaging in an exercise in quoting. And in our agency, we are very efficient at quoting and don't need further practice.
All too often agents allow "the tail to wag the dog" by accepting a directive from a prospect who says: "Take this data and see what you can do. If I like what you bring back, I might give you the business." To me, this is as fruitless as driving down the road with no destination and then wondering why you never got where you were going.
We know from years of experience that prospects love for us to quote on their business to "keep their present agent honest." They also believe that if a competitor presents a lower price, they can use that as a hammer for beating down their present agent and company into meeting or beating the competition's pricing. The problem with this scenario is that the incumbent keeps the business, and we get nothing but "try again next year" for our efforts.
When our agents meet with prospects, we insist that they get three basic commitments and then they must get the final BIG COMMITMENT. Let's examine each of these four in detail.
1. We insist on being able to present to all decision makers. All too often, a secretary or bookkeeper gives out the "package," collects a handful of proposals from several competing agents, and then hands them over to the "boss" who makes a decision without ever meeting the contenders for his/her business. From our perspective, if we can't meet with the decision maker(s), we aren't interested in working on the account. Because without that meeting, we can never get the BIG COMMITMENT. One way around this sticky problem is to say to whoever is meeting with you and handing out data, "Who besides you will be involved in the decision making process?" When they answer, ask to meet with all parties involved. If denied the opportunity, run like hell!
2. We want to know that there is limited competition with market assignments. As a general rule, 88% to 92% of all commercial business renews with the incumbent agent and carrier. Statistically then, a best-case scenario is that one out every eight accounts actually moves on renewal. Those are not very good odds. The only way to protect yourself from "practice quoting" is to make certain that you will be guaranteed the right to go to your markets and, in our case, we insist that there is no more competition than the incumbent, one other agent and ourselves. More than that and you end up with a Chinese fire drill and very little likelihood of getting your markets and even less likelihood of winning the business.
3. We want assurance that the client will not give our work to the incumbent agent. Before you start sending me e-mails asking if I am crazy, I am fully aware of the fact that prospects will lie and sometimes will make this promise without meaning it. I am not naïve. But I do feel that it is essential that you raise this issue up front. Our explanation to clients is that if they're going to pay less money for insurance because of our work, then we deserve the business. We explain that when they take our lower quote back to the incumbent agent who then matches it only because he or she had to, that agent really doesn't deserve the business and we can't afford to do all of that work for another agent/company to keep the business. It still amazes me how many prospects will not understand your position and will tell you up front that they will give a "last look" to their present agent and carrier. While you can express your appreciation for their loyalty (after all, would I expect any less from my clients?), you cannot afford to get involved with those prospects. Once again, run like hell!
And now for the BIG COMMIT-MENT. If you successfully make it through the first three commitments and get satisfactory answers, you must then ask one last question: "What will it take to win your business?" You might have to help the prospect formulate an answer (that's OK--cheating is allowed); but without an answer you cannot afford to waste your time, the agency's time, the company's time or your credibility with your carriers. If prospects can't tell you up front what it will take to write their account then they surely won't have any better idea when you come back with a proposal.
If dealing with a price buyer, peg the prospect to a dollar or percentage amount by which you have to beat the incumbent's renewal pricing. If the prospect is unhappy with his or her present agent's level of service, find out what service you will have to provide to win the business and, most important, what assurances it will take to make the prospect feel comfortable that you can deliver the higher level of service.
A side benefit of this process is the clout you will establish with your carriers. In our agency, our carriers know that we will do our best to tell them exactly what it will take to win an account. They know that if they can provide us with what we ask for, we deliver the business 90% of the time (there is always that 10% that don't live up to their commitments). And most of the time our underwriters will stretch as much as they can to help us deliver the "target" pricing because they know that we are serious about delivering an account. An agency that gives an underwriter a defined target and then delivers the client is always going to be treated better than an agent who says, "See what you can do and maybe we'll get lucky and write the account."
I know how tough it is for commissioned agents to turn down a prospect, but at my agency, we believe that we simply can't afford to work on any business without these commitments.
As always, I invite your comments and thoughts on this issue. Many thanks to the readers who have taken the time to respond to my first columns.
The author
Michael J. Weinberg, nationally known columnist, speaker and seminar leader, is the managing director of Gateway Insurance Agency where he spearheads the agency's marketing/sales and automation efforts. He invites reader participation and feedback through his e-mail address (mweinberg@gatewayins.com).
If prospects can't tell you up front what it will take to write their account then they surely won't have any better idea when you come back with a proposal.