WINNING STRATEGIES
To reach the top, agencies must be willing
to take risks and scale new heights
By Roger Sitkins
Why would anyone want to have an "OK" agency that is achieving only average results?
Being an optimistic person, I have always assumed that every agency owner wants to build a great agency. Why would anyone want to have an "OK" agency that is achieving only average results and not providing true financial freedom to the owners and key team members? Other than the fact that average agencies obtain average results and the owners are not committed to, nor have the passion for improvement, I am not sure there is an answer to that question. Maybe they don't have enough "pain." Maybe they are simply too comfortable!
If you have no "pain," are truly comfortable and have no passion for improvement and true financial freedom, save yourself some time and stop reading this article now.
However, if developing a GREAT AGENCY appeals to you, read on.
Drawing from my 24-plus years of agency performance coaching, I've been creating a list of the factors that help create a great agency. In this first part of a two-part article, I'm going to review some of the things I see in the Great Agencies. Compare your agency's operations to the great agencies and look for some immediate improvements you can make.
Let's review them:
Never Graduate. Clearly the best agencies, the best sales people, and the best service people have the attitude that they "never graduate." They are constantly involved in getting better; they are always looking for the newest, latest, and greatest piece of information or strategy that allows them to gain unfair advantages over their competition.
Ongoing training and education is a way of life in the best agencies. We see the best agencies investing in the neighborhood of 5% of their revenues in "getting better."
How about you and your agency; are you "Great" in Never Graduating?
Central Focus And Theme. The great agencies create a central focus or theme that is constantly communicated and shared with all of the team members. Two examples of these come from our The Vertical Growth ExperienceTM training programs: The Ultimate Marketing StrategyTM and The Four R's FocusTM, both of which I have discussed in other issues of Rough Notes.
As a reminder, The Ultimate Marketing Strategy helps round out, retain and replicate your "A" and "B" relationships. The Four R's Focus (Results, Relationships, Retention and Referrals) provides a true central theme for the total agency.
How about you and your agency; are you "Great" at having a Central Focus and Theme?
Set Offense. Great agencies have decided on the "offense" they are going to run and follow it on a non-optional basis. What do I mean when I say deciding on your offense? The great agencies choose the "selling system" or the sales processes they are going to follow--then train, practice and monitor that system. There's no room for certain team members to choose to run their own "plays."
Within The Sitkins 100TM the "offense" we run is our unique selling process known as The Risk Reduction ApproachTM. It consists of a very specific, four-phase selling process: Referral Generation, The Risk Reduction Workshop, The Risk Reduction Plan and The Risk Reduction System.
How about you and your agency; are you "Great" in having and following a Set Offense?
Great Defense. Similar to a set offense is a great defense. This great defense, better known as agencies' client service system and processes, is aimed at providing legendary customer service. The great agencies have established HPTs--High Performance Teams--comprised of producers and account managers who have the responsibility for providing the legendary customer service while retaining and rounding out the clients.
How about you and your agency; are you "Great" at providing legendary client service and having a Great Defense?
Value-Added Services, Not Product and Price. The great agencies focus all of their efforts on providing Value-Added Services. Their focus is not on product and price. Their attitude is that if they sell only product and price, they can be beat. If they focus on providing value-added services over and above the mere passing through of an insurance transaction, they cannot be beat!
How about you and your agency; are you differentiating by being "Great" at Value-Added Services?
Referrals Only. Average agencies and producers do tons of SAD (Smiling and Dialing) marketing and are very guilty of "practice quoting." The great agencies allow themselves to work on referrals only! They pursue referrals from existing clients and centers of influence. Because they are working on referrals only, the great ones have a closing ratio well over 80% and have absolute WAP--Walk Away Power.
How about you and your agency; are you "Great" at earning and generating Referrals?
Excellent Internal Communication. The great agencies have excellent internal communication. They have the central themes and focus discussed above and make sure they are constantly reinforcing the cultural behaviors that support their desired results. They hold on-going communication/focusing meetings, which include weekly sales meetings, weekly HPT meetings, and monthly state-of-the-agency meetings. The goal is to keep each team member informed and focused.
How about you and your agency; are you "Great" at Internal Communication?
Vital Few In Everything You Do. A central foundational theme to The Vertical Growth Experience is to use the power of the 80/20 rule. Also known as Pareto's Principle, as you probably know, the 80/20 rule states that the top 20% of your clients will generate 80% of your gross commission income. I am still amazed at how many agencies and producers never evaluate their books of business under this rule.
One of the outcomes of the power of the 80/20 is to focus on the "vital few" relationships, vs. the "trivial many." We take this even further and say that in everything you do (business, pleasure, etc.), determine the 20% of your efforts that generate 80% of your results, then do the 20% at least 40% of the time!
How about you and your agency; are you "Great" at using the power of the 80/20 rule and focusing your efforts on The Vital Few in Everything You Do?
The Power of Practice. This one is almost too obvious, but it bears repeating. Great agencies use the Power of Practice. Probably everyone reading this article has been involved in something that required practice. When you were involved in sports, plays, music, or anything else where you went to "play," didn't you always practice before the big event? Didn't you practice to get better? Agents have chosen a career which could lead them to financial freedom, yet the concept of practice eludes 98% of them. Unfortunately, the first time most producers give a sales presentation is live in front of a prospect. I submit that is the wrong place to practice! Of course, average agencies are too busy to practice, to get better.
Holding regular low-risk practice sessions is a way of life in great agencies. Don't you think Tiger Woods practices to get better at his career?
How about you and your agency; are you "Great" at using the Power of Practice to get better?
Behaviors, Not Numbers. Great agencies know that you cannot manage numbers! You can manage only the behaviors that create the numbers. Clearly, the agency's behaviors and habits must support the desired results. The great ones constantly review their behaviors, their "WINs" (What Is Normal in our agency today?) to make sure they are leading them towards their long-term goals and objectives.
How about you and your agency; are you "Great" at focusing on Behaviors, Not Numbers?
Relationship Management. Great agencies and producers, those not focused on the commodity-based sale, realize that it's all about relationships. They have formal relationship management programs for the five types of relationships. As I have discussed several times in the past, you need a program for clients, prospects, insurance company key players, fellow team members, and centers of influence.
How about you and your agency; are you "Great" at Relationship Management?
Operating Profits. Great agencies realize that they must earn an operating profit. This of course means that you earn an acceptable profit without considering contingency income or interest income. Our goal for our members is to earn a 25%-plus operating profit. This allows us to never live in a false world of security. The data I look at shows that the average agencies would be in "deep weeds" if it were not for the non-operating revenues of their agency.
How about you and your agency; are you "Great" at earning an Operating Profit and viewing your additional income as a bonus?
How does your agency match up against the traits I see in the great agencies? What improvements can you make? Do you have a passion for creating a Great Agency?
As always, it's your choice! *
The author
Roger Sitkins is president of Sitkins Group, Inc., of 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. Sitkins offers a one-year Producer Training Camp and a CEO Training Camp.
Author's personal note:
My mother, Olga Sitkins, who along with my father taught me the property/casualty business, passed away on May 11, 2002. She was a truly professional insurance woman and inspiration. Thanks, Mom, for the foundation you provided.