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Winning Strategies Are your top-line revenue growth systems in place? Growth doesn't happen by accident By Roger Sitkins In order to have acceptable top-line revenue growth—the kind that leads to dramatic increases in your bottom line and agency value—you must have certain systems in place. Selling system If you’ve ever read my articles before, this will sound familiar: You must have a formal selling system that totally differentiates you in the marketplace. One way to do this is to get away from the old system of selling (Look, Copy, Quote and Pray) and also get away from selling based on product and price. That’s what the average agencies focus on. What’s worse, average agents tend to give apples-to-apples quotes. That’s fine, as long as they understand that there are 56 varieties of apples! You’re shortchanging your future client and yourself if you’re still giving apples-to-apples quotes. For one thing, these types of quotes tend to be based on old insurance policies that haven’t been updated in years. Further, there probably hasn’t been an annual risk survey done on the account, making it impossible to determine what’s needed now. Therefore, you’re really just opening yourself up for an errors and omissions claim when you accept another agency’s risk management plan as the correct plan. The bottom line: When you give apples-to-apples quotes, you’re setting yourself up to inherit a bushel of problems—and for a lower price, no doubt. If you’re selling like everyone else is, you’ve got tons of competition, because everyone has the same message and it’s all about saving money. What I’m saying is that you’ve got to play the game where no one else is playing. Areas where most agencies don’t play the game very well are the value-added services and risk reduction plans. If you want top-line growth, it’s imperative that you have an offense (i.e., selling system) that works; a central branded theme. Our theme, for instance, is The Risk Reduction Approach™. This trademarked system of selling insurance operates strictly on referrals, preventing SAD (Smiling and Dialing) marketing. Do you have a selling system in place that not only earns but also generates referrals and introductions? Service system If you believe, as we do, that it’s all about acquiring and retaining clients, then you’d better have a true service system in place. We’re not just talking about your automation system, but your internal processes, procedures and beliefs that support the goal of retaining ideal clients. This goes hand in hand with eliminating all caustic relationships (you know, the ones that make you wish you had caller I.D. on your office phone lines). As we’ve discussed before, your general operating theory should be 80-0-0. This means you’ve got a strong Service Hand-Off in place, which frees up producers to invest 80% of their time in their four key money-making activities. That won’t happen without a great service system in place. Your system must also guarantee Zero Backlog. The goal is to have 24-hour turnaround. Even if that’s not attainable, it should be your goal. Many agencies simply throw more people at the problem, which really doesn’t help. What does work is having systems and procedures that are properly used, including a workload accountability process that indicates the degree of backlog on a week-to-week basis. I’ll bet that 90% of the insurance professionals reading this column have no idea whether they even have a backlog. The problem is, if you don’t measure backlog, you could have an employee who’s in trouble or, conversely, an underused employee. The final component of an 80-0-0 operating system is to have Zero Accounts Receivable over 30 days. The key is to have systems and procedures to ensure that your agency never pays an insurance company a single dollar that hasn’t been collected from the insured account ahead of time. I’m amazed at the number of times I’ve seen agents who will write off huge sums that they’ve never collected. Promise keepers. When producers are selling based on value-added services, they make a tremendous number of promises. That’s where the great account managers come in. These are the folks who work behind the scenes, often in conjunction with the agency’s business development coordinator, to ensure that the producers keep their promises regarding value-added services (such as implementing a safety program, training the staff on loss control, visiting every quarter, etc.). Although promise keeping is a crucial part of the service system, few agencies have it in place. But without it, most agencies will over-promise and under-deliver. Proactive. We don’t know when a claim will occur, but we can do more pre-loss versus post-loss claims work through education. This means being very proactive when it comes to educating clients about how to avoid/eliminate losses as well as what to do in the event of a loss. After the loss, we must be exceedingly conscientious about following up with the carriers and staying informed each step of the way as the claim is being processed. The time to follow up is not when a client calls you weeks after a loss wondering why he hasn’t heard from the insurance company and what’s going on with his claim. If you don’t have the answers, then why do clients need you at all? They don’t. Total Account Development System (TADS). When the account managers are talking to an insured (particularly in small commercial and personal lines), make sure you know whether that insured is a full-time or a part-time client. If you aren’t writing all of their insurance, why not? With TADS, someone will always talk to the insured with the goal of rounding out the account. Otherwise, you’re not maximizing one of the critical indicators of an agency—revenue per relationship. Coaching systems Offensive Coordinator (Sales Manager). This person drives the offense that results in predictable and guaranteed success. An important part of this employee’s duties involves conducting weekly sales meetings and monthly one-on-ones with producers, as well as making joint calls and directing low-risk practice sessions with them. I realize that most people hate rehearsing various pieces of their selling systems and presentations because they fear looking stupid in front of their peers. But isn’t that better than not practicing and looking stupid in front of a great prospect or client? Defensive Coordinator (Service Manager). This person drives the agency’s retention systems and makes sure that the account managers are doing theirs. In essence, service managers are “the promise keeper’s promise keeper.” In addition to conducting weekly team meetings without fail, they are responsible for: producing workflow and backlog reports; ensuring that the automation is constantly updated and fully used; driving the TADS; and conducting desk audits. As a key part of quality control, desk audits are a great way for managers to monitor producer activity, recognize the need for additional support or training, and offer assistance. Relationship management systems When it comes to all-important relationships, there are basically five levels that we’ve discussed before. Keep in mind that in theory, each of the following relationships requires both deposits and withdrawals. 1) Clients. Clearly, the goal is to create advocates and have lifetime clients. 2) Prospects (a.k.a. Future Clients). These should match your ideal client profile. Always have 20 lined up and ready for you to work on. 3) Insurance Companies. Make sure they are your advocates and that everything you do for them falls into the category of TOSS (Top of the Stack Submission). What are you doing to make your underwriters view you in the most favorable light and embrace your business? 4) Fellow Team Members. Have your high-performance teams in place. 5) COIN (Center of Influence Network). You absolutely must constantly cultivate advocates within your COIN, including bankers, attorneys, CPAs and others who will refer you to their best customers. Reporting systems Old habits are hard to break. Without accountability systems, your people will quickly lose the discipline of any new system or procedure that you try to implement and will retreat to their old ways. It seems that all employees have their own old ways, which is why all of the systems I’m discussing focus on creating the agency’s way of doing business—not the individual producer or account manager’s way. We already know that the old way of selling is to Look, Copy, Quote and Pray, but what about the old way of servicing? You know, where you take a phone call, write something down on a piece of paper, then go to your computer and enter the data to send. When it comes back, you print it out (on more paper) and then it becomes part of a backlog. Obviously, this is the antithesis of effective reporting and efficient service. Bottom line So why have systems and accountability? Because without them, people will go back to their old ways, no matter how inefficient they may be. Furthermore, people will hide and evade—hide behind a backlog and evade additional work, as well as any new systems and processes. Consequently, without systems in place, there can be no real gains in top-line revenue and operating efficiencies. You simply won’t get the productivity you need. Another major problem is that you wind up with unproductive employees, including legacy, disengaged and excess team members. While a legacy employee has been there for a long time and is something of the company’s “sacred cow,” the disengaged worker has lost interest in the company and is just going through the motions on the job. Finally, excess employees are simply extra, unnecessary workers who underscore a company’s inefficiency. Surely this is not what you want. If it’s true that Revenue per Employee is your company’s number one economic driver, then you have to have systems in place that will support and increase it. Your goal should be to get your revenue per employee so high that you can’t outspend it. Do these systems work? Among members of The Sitkins 100, absolutely! Here’s what our Best Practices members report: Closing Ratio: 89% So what’ll it be? You can either have systems that define your agency’s way of doing business or you can have HAWG: Hysterical Activity on the Way to the Grave! As always, it’s your choice. * The author |
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