By Roger Sitkins
THE PRODUCER’S BEST VERSION POSSIBLE
Finding ways to drive net new revenue
In last month’s “Winning Strategies” article, I introduced The Agency’s Best Version Pyramid (BVP). It was so well received that I’m expanding on the concept this month and applying it to the all-important role of your producers (or you, if you’re a producer). Net new revenue may not solve all your problems, but I firmly believe that it solves most of them!
I continue to be very concerned about our distribution system, the Independent Insurance Agency channel. Even with organic growth rates climbing from 4.5% in 2017 to just above 6% today, there’s still so much unrealized potential among independent agencies.
[N]othing changes if nothing changes! Your best version possible is … waiting to emerge. Once that happens, you’ll be able to look back on your career with no regrets.
“Potential” is a word I hesitate to use because I’ve always disliked it. No matter the endeavor—sports, music, theater or sales—that word is almost always attached to those who have fallen short of success or missed some great opportunity. Often, the word is associated with someone past their prime and usually is prefaced by the word “oh.” “Oh, they had so much potential,” suggests they haven’t done all they could have or should have. They’re going to have regrets at the end of their career unless they make changes now.
If you’re an owner, why not create a culture in your agency that prides itself on overachieving? If you’re a producer, why not constantly do those things that not only increase your potential, but also help you exceed it? The Best Version Pyramid can help you do just that: achieve more than you ever thought possible.
One of the things I always stress is that your numbers (results) are the outcome of the behaviors and strategies you make normal in your agency. The Producer’s BVP focuses on those behaviors and strategies that create predictable and guaranteed results.
The 10 building blocks of the producer’s BVP
As with the Agency’s BVP, the Producer’s BVP consists of 10 foundational stones. For each of them, rate yourself on a scale of 1 to 10 (with 10 being the best).
- Future Ideal Client Pipelines. I know you’ve heard this before, but it bears repeating: You want to work exclusively with future ideal clients—not suspects or prospects. This means you’ve notonly determined what a future ideal client looks like for you, you’ve also identified the specific people or businesses that match that profile. Next, you implement the Reverse Referrals Prospecting system that begins filling up your pipelines. The goal, of course, is to have pipelines that are overflowing with more opportunities than time. Who’s in your pipeline and what are you doing to keep your pipeline overflowing?
- The Ultimate Marketing Strategy. Round Out, Retain and Replicate your A&B clients (the top 20% that generate 80% of your income) while trading down your C clients (the bottom 80% that generate only 20% of your income). Note: This doesn’t mean the agency gets rid of the bottom 80% of its customers! Obviously, the agency should and can make a profit on every account. However, the producer is the one who must systematically trade down their C customers. As a result, these customers either go to a new producer who’s being mentored or to a service center. Incidentally, I’ve never had a producer make less money by trading down accounts.
Rounding Out: You or your agency writes 100% of the clients’ insurance policies.
Retaining: You keep 99% of the clients you want to keep.
Replicating: You provide a world-class experience for your clients, which wows them to the point that they gladly give you referrals and introductions to accounts similar to them.
By implementing this strategy, the producers we work with can expect to grow their books of business by 60% in three years, while reducing the number of clients they have by 60%. We refer to this as the +60% and -60% Strategy.
For example, let’s say a producer has $1 million of commission on their book of business and 100 accounts. If they replicate the top 20% of their customers, they’ll grow by 80%, so their book of business will grow from $1 million to $1.8 million, and from 100 to 120 accounts. At the same time, they must trade down the bottom 80% of their customers, which means they’ll lose 20% or $200,000 of their revenue for a total of $1.6 million of commission vs. $1 million. In the process, they’ll have to eliminate 80 customers, leaving them with 40 customers vs. 100.
- Relationship Management. Yes, it’s still a relationship business. You’re not in the insurance business; you’re in the relationship business! The best producers have pivoted from the day-to-day transactions, which are all getting digitized anyway, and focusing on relationships. What’s more, they understand the five types of relationships that need to be proactively managed: Clients, Future Ideal Clients, Insurance Carrier key people, Team Members, and Centers of Influence.
- SHO and HPT. This stone represents the strong division between sales and service known as the Service Hand Off (SHO) and the High-Performance Team (HPT). The purpose is to facilitate the agency’s exclusive focus on Retaining and Obtaining Ideal clients (ROI). Establishing this clear division enables producers to invest 80% of their time in sales and sales-related activities.
- Continuations, Not Renewals. This is a matter of eliminating the dreaded annual renewal process. As we’ve discussed a thousand times, we don’t renew accounts, we continue relationships. Developing these relationships starts at the policy delivery or installation meeting when we identify the client’s specific expectations, and provide a services calendar.
- Unique Selling System. If this sounds familiar it should, as it is part of the Agency’s BVP that we explained in last month’s article. Just as hope is not a strategy, Look, Copy, Quote and Pray is not a Unique Selling System! If that’s your sales method, at best you’re winging it and getting away with it. But as you know, the problem with winging it is that you can’t replicate it, so any success will be sporadic.
As I’ve often asked you before: What are the unique and appealing ideas and things that distinguish you from your competitors? What are the things that get you out of the commodity game?
- TSS and PPS. One of the true performance drivers for producers is their Time Spent Selling (TSS). If you’ve followed me at all, you know about The 12% Factor: 168 hours per week, 40 hours at work = 24% of the week. The goal is for producers to spend or invest at least 20 hours per week in sales-related activities. That’s just 12% of the total week! This low percentage of TSS strongly suggests that most producers are part-timers. The Producer’s Perfect Schedule (PPS) creates a platform for them to have 10 appointments per week with clients, future ideal clients, and centers of influence. It’s really pretty simple.
- Relentless Preparation. This is arguably the ultimate unfair competitive advantage. Those who practice get better; those who don’t won’t. But if you’re still not convinced, look no further than Tiger Woods for proof. The ultimate exemplar of relentless preparation, Woods says he began preparing for his comeback victory at this year’s Masters Tournament six months before. Love him or hate him, you have to admire him for persevering. Just two years ago he was out of the game, suffering from chronic back pain and questioning whether he’d ever be able to play, let alone win again. He knew he had to be relentlessly prepared in order to perform at the highest level and win. His victory in Augusta proves that he was, indeed, prepared.
Now compare his approach to that of most producers, the majority of whom are rehearsing their presentations during the actual presentation. They almost never practice or rehearse in front of their team, and most have never recorded themselves giving a presentation. The goal is to never lose a sale to someone who is more prepared than you!
- Ultimate Sales Playbook. A true playbook is an invaluable guide to follow. Ours consists of three sections—Prepare, Play and Stay—that address the following questions:
- How do you Prepare to play the game at a very high level?
- How do you actually Play the game (e.g., make sales)?
- How do you Stay in the game for the long term (equating to a 99% effective retention rate and more opportunities than time)?
- Personal Accountability. As with the Agency’s BVP, the capstone of the Producer’s BVP is accountability. It’s holding yourself personally accountable to do exactly what you said you were going to do. Who is your accountability partner? To whom do you hold yourself accountable on a daily, or at least a weekly basis? This can be another producer, your spouse or anyone other than you.
The bottom line
To know how you rate on the Best Version Pyramid, first go back and review the 10 stones. Next, rate yourself on each one using a scale from 1 to 10, with 10 being the best. A score of 5 means you’re unequivocally average, and 1 or 2 is absolutely unacceptable. What is your overall Producer’s Best Version Pyramid score?
Here’s how you performed on the Sitkins Scale:
80+ = Excellent! You’re doing a great job, just continue fine-tuning.
60 – 79 = Pretty good. But don’t get complacent and start coasting.
40 – 59 = Mediocre. You’re an average producer with average results; watch out for regrets later in your career.
20 – 39 = Going Downhill. You’re staying busy with Hysterical Activity on the Way to the Grave. You confuse activity with results and, consequently, accomplish very little on a daily basis.
0 – 19 = Come on, really?
Remember, nothing changes if nothing changes! Your best version possible is out there just waiting to emerge. Once that happens, you’ll be able to look back on your career with no regrets. Why would you accept anything less?
Roger Sitkins is the CEO of Sitkins Group, Inc., and developer of The Sitkins Network and The Better Way Agency program. Roger began his career by working in his parents’ insurance agency in Wyandotte, Michigan, and after nearly 40 years has truly become an icon in the industry. He has trained and mentored thousands of insurance professionals. Producers, CEOs, and sales managers with diverse levels of experience have benefited tremendously from his training and leadership.
Roger was inducted into the Michigan Insurance Hall of Fame in 2017 and in that same year also received the Dr. Henry C. Martin Award from Rough Notes magazine. Roger is among only five others to have the honor of receiving this prestigious award.
Recognized as the nation’s top insurance agency results coach and renowned leader for improvement, he believes that if you improve the life of one person, you improve the world. To learn more, visit www.sitkins.com.