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 Stamp the p word on your brain like a tattoo-p for 'prospects.' If you want to be a super prospector, here's what I recommend:
It goes without saying that top-quality prospects -l arge clients that are somewhat ready to buy - will lead to profits. What might be less obvious is that having top-quality prospects in the pipeline invigorates the productivity of your staff. After all, there's something enervating about low-grade prospects; too many thwarted sales will sap an agency of the motivation it needs to succeed. Great prospects, on the other hand, go beyond the value of their accounts: They actually energize you into being a better salesperson. Great prospects, combined with hot selling, will really make your agency sizzle.
Success in sales is 50% prospecting, 25% managing, and 25% face-to-face selling. Unfortunately, prospecting can be tremendously frustrating. All too often, you wind up irritated, distressed, or tired, especially when your hard work fails to land the account-or you land it at a net loss. To prevent these problems, here's a proven method of evaluating Commercial Lines prospects to improve the chances that you'll make money on the business-if you get it:
- Grade prospects on their willingness, size, placement difficulty, and competition.
- Use a grade of 1, 2, or 3 points, with 3 being best. You're looking for prospects that score at least 10 points out of a possible 12. Think of grades of beef:
10 to 12 points is an 'A' prospect (prime)
7 to 9 points is a 'B' prospect (medium)
4 to 6 points is a 'C' prospect (tough)
Willingness measures the prospect's attitude toward providing the information you need to write the account. If you can't get what you need, the prospect gets a '1'-which means that you should consider walking away on the spot. If you receive the information but not in a timely fashion (because the prospect's records are poor or not readily available), rate the account a '2.' The prospect who gives you what you need right on time deserves a '3.'
Although the size (and commission level) of the prospect's account should be the primary factor in assigning points in this category, but other issues come into play. For example, an account that's smaller than your minimum may generate a number of strong referrals or have a high overall rating. Conversely, you'll need to ask yourself how much time you can afford to spend on a large account with a lower total score.
Placement difficulty depends on four elements: inspection, account loss history, hazardous liability class, and degree of cooperation by management. A '1'-an account with heavy losses, one that operates in a highly hazardous business, or a new venture-should probably be pointed toward the Surplus Lines market. A '2' means an average-to-tough risk-perhaps a slightly older building, with a couple of losses and a few difficult engineering problems. Reserve a '3' for risks that your companies really want to insure.
Competition measures how difficult it will be to land the account. Give the prospect a '1' if more agents are quoting than there should be, the account is price shopping, or the client agent has a 20-year history with the incumbent. Assign a '2' to the average prospect. A '3' means that you know you have the edge-for example, your insurer's strengths and preferences match those of your prospect.
Bear in mind that you must be ruthlessly objective in making these evaluations. Focus on the 'prime' accounts (those rated 10 to 12). Walk away from any prospects rated under 8, telling them, 'I haven't earned the right to work with you this year. May I keep you on my newsletter list, let you know about changes in the insurance market, and keep in touch during this coming year?' And run away from the 'tough' accounts rated 6 or below. After all, would you go to a restaurant and order a tough steak?
Ask your prime prospects to sign your company reservation form giving you permission to contact the insurers you want to write their business. Tell these prospects, 'Insurers usually allow only one agent to negotiate rates and coverage for their accounts. To get the best pricing and protection as soon as possible, I'd recommend that you use this form to advise any competing agents that you've assigned these coverages to our agency.' Agents who want a sample form should feel free to contact me.
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