December 29, 2016
5 Abysmal Business Practices by Agencies
Traditional producer sales goal-setting is a joke because it isn’t based on anything meaningful. It is often nothing more than a nice round number.
We’ve combed through the year’s data of all the reading and liking and sharing that has been done around our articles, and this year a definite theme emerged:
You recognize that the status quo isn’t working any more, and you need to make changes to your business model to remain relevant to your clients.
Part one is about positioning and communication, recognizing that what you say and how you say it matters – a LOT. And here in part two, we’re taking a look at how you’re running your operations.
The consensus is that it’s time for an overhaul because insurance agency business practices are terrible. Continuing with status quo will not keep you even any longer; holding onto status quo is actively moving you backward.
Prospecting, referrals, retention, producers and delivering results may not sound like items that should scare you, but clearly they do. And not addressing those business fears in a healthier manner could put you out of business.
Bottom line: We get how truly terrifying these fears are and how difficult it is to bring significant change to your agency. But you have no choice. If you don’t face the fears, if you don’t bring the change, you are on a dead-end path.
See also: 26 Most Important Words in Business
The short answer is “Generally, no.”
It may seem like an odd question, but if you don’t know why your clients hired you, it’s probably because you don’t have a clear value proposition; therefore, you also likely don’t know what your clients found compelling about you and your company. And it’s pretty hard to deliver effective results against the unknown. “It just feels right” is not a business-building answer that you can replicate to regularly drive new business.
Bottom line: Leaving your fate to the buyer’s gut instinct is inexcusable. It has to be extremely clear as to why anyone should hire you. And the same, tired reasons our industry has been giving for decades won’t cut it.
Insurance agencies have never put themselves in position to control their own pace. Your business growth is being slowed because you have attached your business to someone else’s business (the carriers). And, because you can’t stray too far from the source, you can’t move any faster than the pace they set for themselves.
Bottom line: It’s time to start running your business as the stand-alone business you have always needed it to be; it’s time to set your own pace and grow as much and as fast as you desire.
Traditional producer sales goal-setting is a joke and results in very little confidence – for the producer or the leadership – that it will actually happen because it isn’t based on anything meaningful. The “goal” is likely the same pretend goal from last year, or some percentage variation of it, which was probably originally selected based on a “round number,” such as $100,000.
Bottom line: Successful business years don’t just happen, at least not any more. Nobody is responsible for your success more than you. Set a goal you actually believe in, and it will drastically reduce (likely by half) the number of accounts you need to write.
Do you have any idea of how upside down you are on a majority of your book of business? It’s probably true. Knowing that agencies vary significantly by number of producers, let’s do some analysis on a per-producer basis to find out just how profitable your producers are running their books. This is a great follow-up to the Sales Goals article listed above.
Bottom line: You can’t afford to continue leaving things to chance. Be honest with yourself and evaluate your marketing and sales efforts and then make the tough decisions to make the needed changes – regardless of how difficult it may feel. You HAVE to change the way you’re working.
The industry loves a good “stick it to Zenefits” article or two. Perhaps it’s because you feel they’re really off base with their model. Or you don’t like the disruption they’ve brought to your comfy business. Or maybe you just can’t turn away from the drama they have created. Whatever the individual reason, here is the article that topped our posts for the year.
Bottom line: Regardless of how you feel about them, please note that they continue to add new clients. While they may not be popular in the insurance industry, they more than make up for it with a group of employers who are attracted to what they’re offering. Take notes, and make your own adjustments to your own business based on what employers want today, which is different from what they wanted three years ago. Zenefits started based on this idea, and they continue to make adjustment because of it. You should, as well.
Triple Bottom Line From Q41 2016 Posts
Agency owners need to control their business from value proposition and communicating effectively, both internally and externally; to managing the company in a head-on manner and making difficult decisions that allow them to create the culture and company they want and need to have; to managing the flow of assets throughout the organization from revenue coming in the door to allocation of resources internally.
See also: Why Start-Ups Win on Small Business
Leaving anything up to “the way it’s always been done” or maintaining status quo is putting you and your employees on a dead-end path. Take control of your business and take control of your future.
Can’t get enough of these great insights? Be sure to check out Part I of Top Q4i posts from 2016!
A version of this article originally appeared on Q4i Agency Blog.