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 Why on earth would agency principals pay a consultant to tell them that to sell insurance, they must contact many people whom they currently do not insure?
For today's agencies that aren't growing and consequently are watching their profit margins decline or disappear altogether, that's exactly what's happening. Once the owners' compensation is affected, they turn to consultants like my company. Commonly, they request us to 'jump-start' the agency and make them grow and become profitable again.
In our analysis of agency operations, we commonly review financials-not to ferret out any improper financial transactions but to determine whether they're conducing to growth. In many cases, we find agencies perfectly aligned for a slow decline. When times get tight, they cut expenses. But instead of cutting the perks that many agents take, they cut marketing, advertising, and production-oriented activities. Presumably, the agents don't see any results that justify those expenses. Unfortunately, cutting the source of potential new business slows the decline of the business in the short term but accelerates it over the long term.
Cutting off marketing and advertising makes as much sense as trying to save money by simply not paying any more bills. Or trying to lose weight by ceasing to eat. Obviously, the first 'solution' will bring you to court, and the second will kill you!
We don't recommend continuing to pay for advertising and promotions that fail to work-but most agents simply don't know whether or not their advertising is paying off. They advertise in the Yellow Pages in self-defense (everyone else does it). But if they send out calendars, magnets, pens, or other promotional material, they do nothing to measure results in either client retention or new client growth. As a result, it's easy to cut those items in tough times-and if those marketing methods were working, the agents have cut their own throats by eliminating them. If the marketing efforts were not keeping prospects aware of the agency's identity and inducing new prospects to inquire about the agency's products, they should have been replaced with better tools.
If you're working at a drowning agency, cut the perks-not your lifeline.
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