Five Elements Of Insurance Agency Growth: How The Performance Management Process Just Got Better

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A good performance management process is no longer enough to ensure insurance agency growth. What can ensure it, though, is a good performance management process rooted in the five core elements of commitment, business process, sales training, skills training and accountability. Before we review these core elements, let’s first look at what is status quo in the industry.

If company owners and agency principals were asked to define their performance management process, not a one of them would agree or have the same understanding of what those three words mean. Furthermore, very few of them would see insurance sales as the cornerstone of performance and how they manage that process of selling as a key determinate of agency growth. Many insurance agencies operate on the firmly held belief that the insurance business “is what it is” and that’s how “we’ve always done it”. They haven’t committed their agency to any concrete goal and don’t really have a goal-setting process in place for their producers. There are no performance standards set either and no real consequences for not meeting those standards.

Many agency principals have only a linear view for producer and agency growth. Write more policies, book more business, grow and make more money. Write less policies, lose accounts, don’t grow, make less money. Proof of this limited mind-set toward growth is found in the number of 50+ year old men in agencies who have been there for years and are still just making $40-$50K a year in an industry where they could be making double that because the money in insurance sales is there to be made. These agency principals are content with the status quo. They’re okay with how things are working and don’t want to change a thing. They claim they’re too busy to implement a new process to improve the performance of their producers or help them better their performance management process.

Then there are those agency principals who want to grow. They want to create an agency that’s motivated, focused and productive and one that fosters a sales culture that puts more money on the bottom line, revolutionizes growth to the top line, creates wealth for the shareholders and provides the mechanism, the process, the system that generates better income for themselves and for their producers.

I believe there are five elements to extraordinary growth and they center around the following precepts: 1) commitment; 2) a business plan or process; 3) sales training; 4) skills training; and 5) accountability: I espouse to this belief because it delivers on its promise. These core elements create extraordinary, unprecedented growth in the agency.

Commitment. Commitment starts with the agency principal. If the agency is to grow and prosper, the agency principal must be willing to make a commitment to the agency itself and to every producer who works there. Start by making a promise to your producers. Make it a powerful one, a dramatic departure from the way things have been. Think outside the box. Create a commitment that’s concrete, measurable and compelling enough to drive both you and your producers to greater growth. Tell them that you are committed to helping them double their income rapidly. Not only would you motivate the bottom 80% of your producers, but your passion for helping them grow financially would fuel the drive toward greater growth for you, for them and for the agency.

Business Process. Most insurance agencies don’t have a business process. They have a process for how policies get underwritten, how prices are quoted and how client billing procedures are set up. They have a system to keep track of their book of business. But what most of them don’t have is a process by which new business gets generated and new opportunities for growth emerge.

In order to grow, agency principals have to have a business process, a flight plan, a playbook that spells out step by step who is going to play the game, who needs what to play it and where every player is going to be on every play. The playbook defines the rules of play and teaches agency principals and their producers how to play by the rules. And it starts with the prospect. When you develop a rock-solid business plan like this, it is reliable and repeatable.

Sales Training. Of the five core elements of extraordinary growth, none is more important than training. Nothing gives a greater return on an agency principal’s investment than training producers to master the skills that will better equip them and the agency to reach its goals and experience real growth. Without training, how can you execute the plays in your playbook? How effective can you be with the business process?

So what do you train them on? First, teach them how to meet with their best clients and ask for those introductions. Give them the ability to leverage all the people in their book of business and all the people they know. People are the hidden asset an agency has to generate new business, make more money and create a greater net worth. Secondly, train them in pre-call strategy. Teach them how to develop rapport with the client and build a relationship with them. Train them to differentiate themselves and their proactive services from the competition or “incumbent”. Teach them how to wedge out the incumbent on a consistent basis so that they improve their closing ratio and win more business. Lastly, train them on how to negotiate a written service agreement with their clients. And, do all this, not only to give them a high level of competence, but also the confidence to go out and use these skills effectively.

Skills Training. Skills training is about converting sales skills into action, into learned behaviors. The best vehicle an agency principal has to bring that conversion about is a sales meeting. But not the kind of sales meeting we’re all accustomed to, not the kind that starts with the agency principal going through last month’s numbers and the sales manager calling on producers to share success stories. It’s not the kind of meeting where everyone discusses what’s new in the pipeline and the sales manager asks what the chances are of winning that account. In these sales meetings, producers learn how to work introductions, do pre-call strategy and figure out how to bust the incumbent. They learn to use agency resources to quote a piece of business, prepare a presentation and create a written service agreement and they learn how to develop contingency plans.

Accountability. There are two elements of accountability. First, agency principals have to be able to count. They have to have a system to keep track of both prospects and existing clients. They have to be able to create pipelines for their producers. Secondly, there must be consequences. If they don’t have well-defined consequences for things like high performance and low performance, it will be hard to create accountability, and without accountability, nothing gets done.

The biggest problem agency principals have in creating accountability is fear. They are afraid to commit. They are afraid to set up consequences. They don’t want to commit because they fear it will upset the status quo and ruffle feathers. In order to grow, however, producers have to be held accountable for their performance and agency principals have to adopt a mind-set that speaks to the belief that they are creating accountability for the greater good and for the bigger cause — helping producers double their income and creating greater profitability so that with those profits, the agency can invest in new producers and in proactive services that will continue to give it its competitive advantage.

As I’ve said, a good performance management process is no longer enough to ensure insurance agency growth. A good performance management process rooted in these five core elements can, however. Mastering the elements of commitment, business process, sales training, skills training and accountability takes the performance management process in an insurance agency to a whole new level and virtually guarantees not just growth, but extraordinary growth, for the agency and for the owners, managers, and producers who work there.

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