Winning Strategies

Stop pretending!

Tough times call for tough choices

By Roger Sitkins

Producers and agency owners alike often are pretending to be something they’re not and are not reacting quickly enough to current economic times. In case you haven’t noticed, times are tough, which means it’s time to make some tough decisions.

In other words, it’s time to:

Face reality. Reality: what a concept! Unfortunately, many agents are living in the past, reminiscing about how great things used to be just a few years ago.

Tell yourself (and your team) the truth. Where are you as an organization? You need to come to terms with where you want to go and what you’re going to do to get there.

Realize you must stop pretending! It’s time to stop being what you no longer are or never were in the first place.

Many people are pretending to be something that their results prove they are not. In his latest book, author Jim Collins (who wrote Good to Great: Why Some Companies Make the Leap and Others Don’t, among other books) talks about the “the hubris of success.” This is what happens to companies that become successful and start believing their own press. They quickly forget how they got where they are and begin to regress, ultimately undermining their achievements.

What I see in so many independent agents and brokers is a pretense of greatness juxta-posed with reality. In many ways, it’s like watching the “American Idol” auditions. Far too many contestants think of themselves as undiscovered superstars, when the reality is they’re absolutely awful!

Similarly, many agents are delusional about their agency’s performance. Instead, they pretend to:

• Be a proactive and aggressive sales organization. That may be what they tell you, but in reality, they’re not growing at all. In fact, fewer than 10% of agencies have any sort of set offense or established method of going to the marketplace. Instead, every producer has his or her own way of doing things. That’s one of the many reasons they have no net new growth, unimpressive closing ratios and other problems.

• Be in The Sales Game. Very few producers actually live up to this claim. In reality, most producers spend more than 75% of each and every day in The Service Trap, not The Sales Game.

• Be value-based sellers. Many agencies promote value-based services and pretend to provide them, yet continue to lead with and focus on “price-only selling.” Their producers may say they really want to provide some value when all they actually do is quote a price. Ultimately, it all comes down to practice quoting.

• Be a totally automated, paperless agency. It’s rare to find an agency that is using most of the capabilities of its automation system to be more efficient and productive. Instead, most have a glorified accounting system and use less than half of the capabilities of their automation systems. As a result of their inefficiency, they are overstaffed for their workload and unable to create enough new sales to increase revenue per employee. If those same agencies were to use their available automa­tion features, they’d dramatic­ally increase their productivity and revenue per employee.

• Have the “best people.” It’s a standard line of agency owners and managers: “We’ve been in business a long time and we have the best people.” But the reality is, they spend very little time and money on the education and ongoing training of their staff. Sure, they may send their employees to a one-day seminar or so-called “educational experience” from time to time but, typically, they have no schedule or program for ongoing employee training.

• Give excellent customer service, yet provide reactive service at best. Most agencies have no formal relationship management program in place. Most CSRs sit and wait for the e-mail to show up or the phone call to come in before they start servicing, rather than proactively reaching out and touching their clients in ways that will facilitate an excellent customer service experience. That’s why people so often complain that the only time they hear from their insurance agent is when they have a claim or their agent has something to sell.

• Give great claims service. The truth is, most agencies will take only initial reports of claims and have little or not contact with the client after a major claim is closed. They rely on the insurance carrier to follow up with the client to see if they were satisfied with the way the claim was handled. Of course, there are exceptions. The CEO of one of our Sitkins Members agencies personally calls his clients after every major claim is closed to discuss their experience. That sort of personal attention from a CEO leaves clients with an extremely positive impression of the agency and goes a long way in boosting its business.

• Be concerned about agency profitability. Everyone wants to make a profit, yet most agency owners do nothing about the 50% of their accounts that are unprofitable. Some of you who are reading this may disagree with me, but our studies continue to prove this. Are there ways to profit from these customers? Absolutely! I’m not suggesting that you get rid of them. But you’d better stop pretending that every account is profitable because it’s not. Have you ever lost one of your top accounts and found you couldn’t reduce expenses quickly enough to make up for the loss of income? I rest my case.

• Want to build the value of their firms. The average agent or broker will tell you that their agency or brokerage is their largest personal asset, and yet they’re not demanding improved profitability. They’re pretending to care about the value when, in fact, their actions and results don’t support it.

• Want to perpetuate internally. We firmly believe that there are two types of perpetuation for an organization: Leadership and Financial. However, most owners have no plan in place for financial or leadership perpetuation, despite professing a desire to pass on the agency to the next generation rather than sell out to large conglomerates. But without a formal plan, internal perpetuation is nothing but a fantasy, and unless you have a five-year transition plan in place, you’re behind.

• Want to maximize contin­gency income. Agency owners understand that they’ll make more money if their loss ratio is low, and yet they do very little up-front underwriting of their business and little or nothing to track the results with their carriers on a month-to-month basis. Instead, they wait for year-end results to see what happened.

Summing up

You may be a legend in your own mind, but do your results back you up? At some point, you’ve got to decide what you really want to be, and you’ve got to stop pretending that you’re already doing what it takes to achieve your goals. You can’t succeed unless you start demanding excellent results of yourself and others.

The bottom line: If you want your agency to make it in today’s economy, you’ve got to stop pretending and start being proactive. Or you can pretend to take action and let the results speak for you.

As always, it’s your choice.

The author
Roger Sitkins is founder and chair­man of Sitkins International. He is the creator of The Vertical Growth Experience™ programs, which are offered exclusively to the Sitkins private client group. These programs focus on continual improvement of agency/brokerage operations, thus providing members with ongoing development and strategies that literally force vertical growth in the agency/brokerage’s critical indicators of closing ratios, revenue per employee, revenue per relationship, and revenue per producer.