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Agency-Insurer Productivity Scratch my niche Today’s successful producers must go beyond a generalist’s proficiency By Scott M. Primiano
During any given year, I’ll be approached by a number of producers hoping to bid and write our insurance program. Most will come armed with a smile, a warm greeting, a basic BOP, and a statement about finding the best rates. Consequently, most will be shown the door. How come? Had my producer friends done a little homework and prepared a little better, they would have discovered that our company is much more than a standard business class. They would have learned that we have multiple employees and contractors in multiple locations across the country. They would have learned that the nature of our work requires us to have rigorous professional liability coverage, travel accident protection, a unique employee benefits program, and coverage for our fleet of high-end company vehicles. As a rapidly growing company, our retirement and equity sharing plans seem in need of constant updating … and the list goes on. Any producer with a working knowledge of our market segment would be aware of these things and certainly know to ask about them. Most critical, this producer would also know what I don’t know and be able to advise me accordingly. You see, what keeps me up at night is not what I have insured or the price I’m paying for the coverage. Instead, I worry about what isn’t covered and what I might have missed. So, generalists, stay away. Property and casualty-only agents, be gone. Take your benefits-only and financial services-only brethren with you. I want to work with an expert—someone who knows my market segment and expresses an interest in learning more about my business than cursory underwriting information. Someone who can bring in other specialists to investigate and make appropriate recommendations about all of my lines of business, not just those within his comfort zone. Someone who has taken the time to at least scratch the surface of my niche. Am I unique? Mostly yes, as any business owner will profess to be. However, what I have in common with every business owner, and every buyer for that matter, is a strong desire to work with an expert who specializes in my field. Look around: we’re surrounded by specialists in nearly every sector of every service industry—and for good reason. Specialists become experts, and experts provide better service and counsel than generalists. The entire medical industry is built upon layers of specialists. Ask a trial attorney for help with a merger or acquisition and you’ll get an immediate referral. Specialization is the way of the world except, in too many cases, in our insurance world. Thankfully, making the transition from generalist to specialist is not a daunting task for any producer or agency. Normally, all that is required is an interest, an education, and a declaration. For those of you who have been kicking around for a while, take a look at your existing book and you’ll probably discover that you have clusters of clients already segmented into specific classes. This a good start. For those of you who are new or have a broad client base, consider business segments for which you have an affinity, an interest, or some level of past experience—for the obvious purpose of selecting a target market or markets that you’ll enjoy working with. Now it’s time to qualify your choices. It’s not enough to specify just the class of business; you should also identify the size and scope of your specialty within the class. For instance, rather than simply stating that your chosen specialty is consulting firms, you’ll go on to clarify the segment of the industry that you work in. In our example, this would sound like: “Consulting firms with a national or large regional client base, 12 employees or more and generating $2 million to $10 million in annual revenue.” This declaration cuts across the normal industry band and acknowledges the inherent nuances of clients at different levels of the spectrum. It also allows you to pre-screen your prospects and establish minimum and maximum premium levels. Carrier partners Next, let’s make sure you have two or more carrier options for your specialty and that the targeted segment or segments exist within a large enough population in your geographic area to provide enough business to make the effort worth it. With your carriers, you’re looking for more than just an off-the-shelf program—you want a partnership. This partnership would include market research, client education initiatives, risk management and loss control assistance and, at some level, a joint business plan for co-production and mutual support. In short, you want carrier partners that can specialize (or have done so) and have a value proposition that says so. You must work with underwriters who understand the risks you’re submitting and will help you understand the prospects you’re calling on. Speaking of prospects, all is for naught if there aren’t enough prospects to call on. To check on the “prospect population,” do a little digging online or use a market mapping service. If you’re worried that your target market is not large enough, you can move up or down the industry band, and you can decide to specialize in additional target markets—for instance, consulting firms, corporate training companies, and marketing firms. Once you’ve selected your target markets and secured your carrier partners, it’s time to get educated and to make your introductions. I would love to believe that you have the time and the patience to really study the industry segment before calling on prospects, but you don’t and you won’t. Thankfully, the majority of your education will come from the people you meet and the work that you do. This is not to imply that you shouldn’t do some preliminary research such as checking prospects’ Web sites, reviewing their trade journals and associations, and learning as much as you can. You definitely should. However, most of what you need to know about any particular client will come from the client, and, with few exceptions, you can learn as you go. The key to this kind of experiential learning is to simply acknowledge that no client exactly fits into a “cookie-cutter” program and each will have unique needs and expectations. Your job is to gather enough information to enable you, the client, and the underwriter to make educated decisions about the right fit. To do this, I recommend that you conduct a thorough needs assessment. Your needs assessment (or risk management assessment, or strategic fitness assessment, or whatever you wish to call it) should be as specialized as you are and is normally “custom-fit” for the size and complexity of the client. A complex risk requires a more comprehensive assessment, whereas a scaled-back version can be used for a smaller client. If you don’t have an industry-specific assessment at your fingertips, I recommend that you investigate using The Rough Notes Agency OnLine program. It offers an abundance of industry- and segment-specific information that will provide ample fodder to create your first assessment or update an existing one. Additionally, your carrier partners will help create and actually facilitate such an assessment if the client is large enough. Regardless of size, every client should be appropriately assessed before you submit any recommendations. This critical discovery step, most often missed by the generalist, is the single greatest differentiator you will have. With it, you’ll be learning; without it, you’ll be guessing. Had any of the previously mentioned producers approached me with this additional step in the insurance buying process, he or she would certainly have gotten my attention, if not my business. Some additional advantages of specialization and client assessment, advantages that far exceed the effort of taking the additional step in the sales process, are: New producers get a jump start. No longer forced to be “product experts,” they become client focused and segment experts—an immediate credibility builder. They “sell” themselves, their process for client discovery, its benefits and impact. No more bidding contests. The client becomes rightfully focused on the process and the impact, not the price and the product. You work much more efficiently and effectively, closing over 80% of your prospects and retaining over 95% of those. Your carrier partners love you. They can trust your submissions and they adore the fact that you are willing to pre-select the market and co-develop business. This saves them an enormous amount of time and qualifies you as a preferred partner. Client cultural compatibility. The assessment acts as a prospect pre-screener, enabling you to quickly determine whether the client is a value buyer or a price buyer. Service expectations, intentions, and manageable plans can be determined proactively. After conducting an assessment and developing a program, you know exactly what your level of visibility and viability should be with each client. It’s an easy and natural step to completing and managing a proactive, value-added service plan. Cross-selling becomes cross-servicing. You are an insurance consultant, not a product peddler. The assessment allows you to consult on every facet of the client’s insurance world and to match them up with like-minded consultants from other lines within your own agency or networking group. A winning formula. You are doing the right thing, in the right way, for the right reasons, with the right people. How’s that for making our world a little better than you found it? And so, a specialist is born. Each assessment leads to heightened levels of awareness and information about the unique needs of each market segment. Armed with this advanced knowledge, you, the specialist, become further embedded within your selected market. As your expertise grows, so too do your impact, contribution, and reputation within the circles of influence that matter most in every industry. Your “insider’s” perspective allows you to reach beyond common coverage and match unique needs with custom-developed solutions. Your ability to build a book of carefully selected clients based upon referral and networking opportunities is greatly enhanced, and you find yourself consulting rather than bidding. Best of all, I get to sleep at night because you cared enough to scratch my niche. * The author |
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