In the real world, many producers and agencies are average (average being the best of the worst and the worst of the best). Ironically, in our business, being average is not necessarily a detriment to financial success.
The fact that average producers can still make really good money should be a good thing, right? But on the other side of the coin (so to speak), it's also one of the major challenges facing the insurance industry. When producers reach whatever they define as a successful income level, many times they become complacent and plateau. Ultimately this isn't good for their book or for the agency.
Avoiding natural tendencies
One reason that so many high-earning producers reach a plateau is that we all have a natural tendency to take the easy path. Overcoming a plateau in one's career takes a lot of thought, deliberation and effort. Here's a short list of some of the natural tendencies that can derail a producer's journey to continued success.
* Taking best accounts for granted. When you look at the top 5% of accounts that generate 50% of the commission income-or the top 20% of accounts that are 80% of the income-these are often the accounts that are taken for granted. Typically, producers will assume that they "own" an account because they've had it for a long time or have a good relationship with the company owner.
The unfortunate consequence of that assumption is that it encourages producers to over-service the wrong accounts because most of their time and energy winds up going to the "squeaky wheels." These are usually small to medium-sized accounts that require a disproportionate amount of time and effort compared to the income they generate. Coupled with the fact that they rarely have a specific plan in place for their best accounts, many producers are unpleasantly surprised when they lose their top accounts to the competition.
* Playing "me too." With most areas of the country experiencing a soft market, many accounts are in play. Increasingly, producers are discovering that the competition is targeting their larger accounts. Usually, their competitors will promise a plan to reduce costs while providing value-added services. In turn, this forces the current producer on the account to react defensively ("Well, we can do that, too"), often prompting a bidding war. This is not the way to build your business.
* Treating all accounts the same. We firmly believe that every account deserves the level of service it's paying for-no more and no less. For example, an "A" account that's generating $10,000 to $20,000 or more deserves a different level of service than a "B" account that's generating $1,000 to $2,000. While they all deserve good service, they deserve the level of service they're paying for. You can't treat them all the same. You must have a specific plan for your "A" accounts vs. your "B" and "C" accounts.
* Focusing on great reactive service. Producers often lose sight of proactive service, which is what they should be providing. With a proactive approach to service, producers outline for their clients exactly what they have to offer and what they are going to do for them.
Reactive service is quite different because it gives clients only what they ask for. Reactive producers will gladly provide products and services, but only "on demand" or "upon request." Just don't expect them ever to take the initiative to call you with suggestions tailored to the specific needs of your business.
It's easy to offer great reactive service to clients who have a claim, for instance, or who need to make a policy change. However, the best producers are the proactive ones who recognize why it's important to always be in front of the account, not behind the account.
Keep in mind that most agencies get overpaid for the actual reactive service they provide. Therefore, if you're not offering proactive service, you're not doing anything to differentiate yourself or your agency from the competition. You're also not doing much to help your client.
* Having part-time clients. This is another tendency that successful producers should avoid. These part-timers are the clients who don't write all of their insurance with you, resulting in low revenue per relationship.
Here's a litmus test for determining full-time vs. part-time clients within an agency's commercial book of business. Full-time clients have their property and casualty, life/benefits and personal hues with you. The litmus test is whether you have at least 25% of your agency's total revenues coming from benefits accounts. If not, you have a lot of part-time clients, which leads to low retention.
* Practice quoting. It's tempting to give practice quotes, particularly in a soft market. In fact, in times like these, agencies see a surge in calls from people questioning the cost of their commercial premiums and shopping for better rates. Don't succumb to the urge to go out and give them quotes. All you're doing is practice quoting and giving away a free consultation.
* Diluting your set offense. I recently got a call from an agency that had done a really good job of implementing a strong offense, only to have their producers dilute it. This happens when producers "tweak" certain elements of an agency's selling system by doing things their way. When the producers go back to their old way of selling (look, copy, quote and pray), they are reverting to what feels comfortable. But in the process, they're removing the power of the offense.
As we all should know by now, if it's not uncomfortable (i.e., if you're still selling the same way you were 5,10 or 30 years ago), you haven't kept up with the market changes. The market has passed you by. Without a doubt, your competitors are much more professional than you in terms of putting together plans for their clients and providing value-added services. If you're comfortable, then it's time to change your strategy and overall approach.
It's important to remember that "what got you here won't get you there." What I mean by this is that what got you to the $300,000 level as a producer will not get you to the $1 million level. So in reality, what got you here will keep you here, unless you change your attitude, confidence level and thought process.
* Practicing and rehearsing. Do you practice and rehearse your client presentations? If so, you're in the minority because it's a natural tendency to "just wing it." But all too often, producers won't practice and rehearse because they're too afraid they'll look stupid in front of their peers. (On the other hand, if you're going to look stupid, wouldn't you rather it was in front of a co-worker and not a prospect?)
Another common excuse producers use for not practicing and rehearsing is that they don't have the numbers they need from the insurance company yet. Well, if you're rehearsing based on a number, you're selling on price only. Instead, you should be able to practice based on what's really important to that account. For example: What are the things you have found about the account that you can fix? What is the plan you've created to reduce the client's total cost of risk?
It's interesting to me that most producers who golf will spend more time practicing to improve their game than they'll spend practicing and rehearsing to improve their career. Are you one of them?
* Saying "no" for prospects. Producers frequently quit the game before it even begins.
The challenge is to stay in the game until it's over. It's easy to give up when prospects don't call you back after the first couple of tries, but then you forfeit the game. The worst part is, they haven't said "no" yet! So stay in the game until it's over. Persistence usually pays off.
In a single day, one of our young producers wrote $1 million worth of new business on two different accounts. That producer had called the smaller of the two accounts a total of 17 times and left 14 voice mails before he got a return call! How many of you would have quit sooner?
* Focusing on reactive referrals. Producers will tend to say that they work on referrals "almost exclusively." While that may be true, what's relevant is whether their so-called referrals are ones that the producer has asked for or whether they're actually just call-ins. There's a big difference between them-the former is proactive and the latter is reactive.
With a proactive referral, a producer will identify a prospect whom he or she wants to be referred to and figure out a way to get an introduction. If I ask you for a referral and you give me the name of a prospect to call, that's also a proactive referral. However, if someone happens to call me, that's a reactive referral.
So the key question is, what are you doing to earn and generate referrals? If your answer is that you're waiting for the phone to ring, then you might as well be waiting for the roast duck to fly into your mouth!
Producers and agencies have a choice to make when it comes to natural tendencies. They can give in to them and do what average people do. In other words, they won't rehearse or practice (other than to practice quote); they won't ask for referrals and, in general, they'll exhibit rather than avoid all of the above behaviors. As a result, they'll find themselves with too little time and too many accounts paying too little each. Ultimately, these producers will plateau.
Of course, it doesn't have to be that way. You can avoid the producer plateau by creating your own new set of natural tendencies and become the competition that is feared! Or you can choose to do what everyone else does and get the same results that everyone else gets.
As always, it's your choice.
© 2007 Rough Notes Co., Inc. Provided by ProQuest LLC. All Rights Reserved.
Source: Rough Notes