The Sales Center: Systematic Marketing and Selling

Many marketing managers and representatives may ask: "Why is a sales center important to me? Isn't it designed for niche- or target-marketing? How would this fit into my company, that wants Main Street business?"

Having a marketing-representative background provides me with a unique perspective on sales centers. I know that the marketing representative is much more than a "go-for" problem-solver, running down endorsements, acting as portable shrink between underwriters and agents, or being "the official news agency TAS," spouting party line. I know that marketing is the precursor to selling.

In the carrier-agency relationship, the company is interested in obtaining the best selection of business from the best classes of business the agency can offer. This means the carrier must know the type of business it wants to write. By knowing what you want, you can market that position to your agency in a consistent manner. Here is an area in which you can assist in planning, without being seen as an intruder or dictator. If you truly help agents sell more profitable business with concise and simple marketing plans, you will have a loyal business partnership.

Some claim that target marketing doesn't work for the long term because of market swings. On the whole, however, target marketing is the only way to effectively plan for, and defend against, market swings. It simply requires pro-active planning, rather than reactive responses.

How does all this tie into the sale center concept? The sales center is a system of controlling the variables that impact insurance sales. Put another way, the sales center controls time-wasters that impede selling.

Major time-wasters are:

• Prospects who use the agent to leverage existing relationships; those for whom the agency doesn't have a fit technically or with the right carrier; and those who manipulate.
• Carriers that are elusive about what they actually write; that don't reveal all the risk information they need, making it impossible for the agent to collect it on the first prospect call; that have turnaround time for new business, changes, and renewals that's greater than the time to build a new home; and that have procedures that ultimately reward agents who are incomplete or inaccurate, by handling submissions based upon the effective date, rather than an early submission date that would provide ample lead time and complete information.
• Agencies that have submissions that are incomplete and inaccurate, leading to the "boomerang game" of paperwork between agency and insurer; that haven't determined their prospects; that have support staffs who see new business as an increase in workload; that have turnaround times that rival the release of Middle East hostages; that won't fire non-performers; and that haven't modernized operations to include automation for marketing and selling.
• Producers whose selling skills are determined by the cheapest price; who try to force agencies/carriers to fit prospects; who aren't complete and accurate in fact-finding surveys and applications; who don't qualify prospects; who don't sell accounts with enough revenue for agency profit; who don't see enough of the right people; who haven't updated their product knowledge; and who refuse to invest in their future via sales-skills training.

THE SALES CENTER MITIGATES TIME-WASTERS

If you question the destructiveness of time-wasters, ask your underwriting manager what percentage of time is spent quoting. Then calculate how expensive time-wasters are, including rating, paper handling, mail handling, and underwriting. (From our consulting business, we've discovered that smaller agents simply don't have time to waste, and typically don't play time-wasting games.)

How does the sales center mitigate or eliminate time-wasters?

• First, by predetermining what accounts would be the best clients of the agency/carrier. Agents/carriers have limited time and money to sift through prospects to discover clients. The underwriter can only skim the best opportunities. Since agencies have limited sales hours available for solicitation, they likewise must skim their best opportunities. Consequently, by predetermining the best opportunities, the sales center allows the players to focus on the best prospects and perform with the best opportunity for success.
• After the prospect-identification process is complete, time-wasting is eliminated when the company clearly identifies all the information needed on those prospects. (This is not limited to target marketing. An agency could identify 50 new prospects to approach during the next six-month period.) The underwriting and engineering managers should get together to review the applications on which the business will be submitted, then refer to their own guides for necessary information. By informing the agency in advance of all the information needed, submissions will be complete the first time.
• Time-wasting is further eliminated from the agency side because the placer or customer service representative (CSR) can now police the submission process for completeness, accuracy, and necessary lead time. This ultimately prevents the boomerang syndrome.
• Fourth, producers know in advance the most optimum prospects, the information that is absolutely necessary, and the companies that want to write this prospect. (Producers also know that the prospective accounts can provide the income they need for their families. Profit in an agency is a function of the average commission dollars per account. Thus, producers know in advance that account-selling is necessary, rather than simply writing the problem line.)
• Marketing in advance, with direct mail and telephone follow-up, eliminates the worst prospects from the solicitation process. Telemarketing in the sales center qualifies prospects for further action. This prevents the producers from doing much work with no sale, which in turn prevents companies from running the quote machine with no real chance of writing the account.

The marketing process can also manage the producer's time by making appointments. This insures the proper amount of activity occurs with the size and type of business the agency wants, and for which they have a market. In turn, the process increases the hit ratio for both the agency and carrier, thereby reducing the costs of doing business.

• Sixth, the time-waster of inadequate product knowledge is eliminated. It takes several years to attain the CPCU designation and a broad-based knowledge of insurance protection plans. However, it takes much less time to teach a producer the questions to ask, and why the questions are being asked on specific, targeted prospective accounts. Thus, the producer can approach the prospect with all necessary information, such as an abbreviated engineering or safety survey form, addressing the client's most important needs. The agency sales manager, placer, or head CSR can then make the necessary design decisions.

This process teaches the producer integrated product knowledge while he or she works on accounts that are large enough to create the needed income and agency profitability. This point is important to marketing managers and representatives as they work with agents, because it can dispel the myth that it takes three years for a producer to break even!

The biggest time-wasters eliminated here are producers who don't perform. Since prospects are preselected, and since the acquisition of product knowledge is limited to a few target accounts, the only real reasons for producer failure are lack of sales-skills training, discipline, or management accountability. Poor performers can be isolated within six to nine months.

• Finally, the producer problem-solving is eliminated. The sales center maximizes the available time for selling functions. Thus, the producer is out of the office on sales calls, and service or problem-solving calls are handled by the appropriate CSR.

HOW THE SALES CENTER WORKS

You can follow the mechanics as the prospects move through the selling process. They start as "suspects" and move into the marketing (direct mail) and telemarketing process (which is discussed later in this article). When an expiration date is obtained, they become "prospects" and a suspense file is created. The next contact is for a fact-finding appointment, during which the producer completes the survey forms, and provides all information requested by the carrier. The survey form is then submitted to carriers, with appropriate checkpoints to follow. When the proposals from the carriers return, the presentation appointment is set.

If the prospect becomes a client, you can track what happens. The system follows up on that first payment. It sets up various other appointments as the producer directs, i.e., periodic service calls, policy delivery, referral, and cross-sell appointments. The automation tracking of these appointments assures that the activity is maintained, and nothing falls through the cracks.

You can greatly influence a Sales Center by eliminating any process that requires multiple-handling of data. The system maxim is: Do it one time, the first time.

MARKETING MECHANICS

Tracking marketing activity illustrates the suspect-action steps. We see a three-letter series for "warm-up" prior to the original telemarketing call. The warm-up could just as easily be comprised on only one letter-the number of letters is actually determined by the type of prospect, his or her perceived insurance problems, and what works most successfully. The idea is to get the best result for the least cost.

Every time the telemarketer contacts the suspect, a thank-you note is sent. This is important because the intent is to continue soliciting the suspect. Notes establish personal relationships often missing in telemarketing. Here, the telemarketer is the person in charge of controlling the activity so that only 50 suspects are contacted for the first time each week. This process continues for four weeks. During weeks five and six, no new activity is begun. This allows time to catch up on the game of telephone tag.

CRITICAL: Every suspect must be followed-up. None can fall through the cracks. Most business people receive letters that claim that someone will call-yet most never receive that call. This selling system requires integrity.

SALES CENTER RESULTS

What are some of the results the sales center can expect? The nice thing about such a center is that it can be turned on and off as needed. It works just as well for the one-person shop as it does for the mega-shop.

The sales center should generate a closing ratio in the 20%- to 40%-range. A higher closing ratio may indicate that there isn't enough activity. A lower closing ratio may indicate poor marketing, suspect-selection choice, carrier match, or sales skills. Appointments from the expiration dates should be in the range of 65% to 80%. Higher than that may indicate that the expiration date was not qualified enough. Lower than that may indicate too-selective a qualifying job by the telemarketers. Expiration dates from the suspect-contacts should fall in the 50%- to 70% range. Results higher than that may indicate too-weak a qualifying job by the telemarketer. Results lower than that may indicate too-strong a qualifying job, or a lack of sales-skills training.

Why should marketing people get involved in the sales center? Beyond the information already presented, additional reasons are to:

• recapture lost market-share;
• provide an alternative to abandoning small agents;
• increase production, profitability, and fun in the sales side of the business;
• increase sales performance from producers;
• remove mediocre performers who consume space and time;
• focus on the primary objective: selling insurance that protects clients.

HOW CAN YOU HELP?

• Draw attention to, and eliminate, time-wasters.
• Assist the agency in planning for marketing and sales.
• Assist in identifying target suspect groups.
• Push for product differentiation.
• Present to the agency the reasons why it should do business with your company, versus other carriers.
• Promote and assist in sales-skills training-its time has come.