Three agencies we visited had problems so similar that we decided to see just how many agents have the same experience, and the same problems. The key issue for each agency owner was extreme frustration. When probed for a better focus on the issues, each owner expressed the same sentiments:
- They don't know how to get new customers without seeming to degrade themselves to their existing customers, and without selling on price.
- They don't know how to deal with customers who seem to care only about cost.
- Their producers aren't motivated, and they don't know how to instill that motivation.
- Their CSRs appear to be processors rather than professionals.
- Their carriers are demanding, but not cooperative. The company reps who see both sides are cynical, unrealistic in their expectations, and unhelpful in solving agents' problems.
The result of this frustration is the demotivation of agency principals, which only accelerates agency mergers, acquisitions, and other associations (clusters, service centers, virtual insurance agencies, and so on).
None of these problems are insoluble. Agencies around the country have attacked and solved each one of the issues. The solution lies in how to view the problem!
For some people, the problem causes less pain than the solution-so they continue to complain about problems without taking the actions necessary to solve them. No one can help agents who are so deeply rooted in the past that they can't adapt to the insurance industry's changing conditions.
No, carriers are no longer blindly loyal to long-term agents. No, your producers with existing books of business might not be as motivated as you were when you had to scurry and sell policies to feed your family. No, prospects and clients no longer look to you for insurance advice with as much trust as they look to their physicians for health advice.
But if you have the fortitude to change your agency to meet the public's needs, each of these issues can be addressed. Here's how some agents have solved these problems:
PROBLEM: I know I can help the prospects but they don't understand that. They think I'm just another insurance salesperson. It feels degrading trying to 'sell' them on using my services.
ANSWER: The prospect or customer probably isn't trying to degrade you. Your feeling of being degraded is just that: yours. The problem is your own perception. The answer is to act as a good insurance professional. Your sales job is to get the customer to view you the same way that you view yourself. It's easier to change someone's mind if you know you're a winner. Imagine being in a baseball game and facing a pitcher who you know will probably strike you out. What are your chances of being a successful batter? On the other hand, imagine knowing that you 'own' this pitcher and that you have gotten hits nine of your last 10 outings against him. Do you think that your chances of hitting have risen? What has changed between these scenarios: the pitcher (prospect, customer) or you?
All those hokey 'positive thinking' and 'visualization' exercises really work as long as you have the experience and expertise to back up your confidence.
2. PROBLEM: My producers and I keep falling back into the habit of selling on price. It seems to be the only way to get through to prospects-and even clients. Their only buying consideration seems to be price.
ANSWER: Those who sell price fall into one of two categories:
- Those who don't know enough about their and their competitors' products to differentiate them (selling benefits and differences)
- Those who don't know the professional sales skills that differentiate salespeople from order takers with nice personalities
If ignorance (or laziness) is the problem, you must drill yourself and your producers with product benefits and differences between your products and those of your competitors. Your carriers can help you to some degree. You can also gather intelligence by reviewing other's policies and compare them against your own products.
If you realize that you and your producers-experts though you may be in insurance-have never been trained in sales, get the training. Knowing insurance products is a far cry from selling them. Professional salespersons might not know as much as you but will establish relationships and trust between themselves and the clients, and will therefore close more sales than the technical expert who relies only on the facts. Fortunately for you, most insurance salespeople are as ill prepared to sell as your producers are. Successful agencies have learned this bitter lesson and have spent time and money on continuous sales training. Some have also hired experienced salespeople and trained them in insurance, feeling that the people skills of sales are harder to develop than the fact-oriented, technical skills of insurance.
PROBLEM 3: My producers sell only enough to keep them at the compensation level that meets their needs. They complain that they aren't making more money, but they're not doing anything to improve their earnings capability. Not only do I have to hear their financial complaints, but the agency's profits are stalling.
ANSWER: Money may seem to be a motivator, but for most producers, it isn't-it's only a measurement device. Some salespeople need many material possessions and a strong financial base, and money is a motivator to them. But most just want enough to support a normal lifestyle.
The problem lies with the producers who reach a position of comfort and then 'tread water.' The best agency response includes annual objectives with rewards for achievement (money, stock ownership, titles, perks) and penalties for shortfalls. The rewards should always surpass the penalties, but penalties need not be meager. An example of a penalty that works if implemented even-handedly: a modest reduction in renewal commission. Producers should participate in creating their objectives.
PROBLEM 4: My CSRs have turned into drones. They were motivated when they were hired, but now every problem becomes a crisis that I must solve. I don't have time to do their jobs and mine.
ANSWER: It's always easier to let someone else do your job than to do it yourself-especially when the boss always second-guesses you anyway. Is that how you appear to your employees? Unless they respond to a problem exactly as you would, do they feel subject to your criticism? If so, their easiest decision is to make none at all. They come to you with the problem knowing that if you solve it, they won't be subject to your criticism.
To reverse this trend, every time people bring you a problem, ask them how they would attack it, and then agree with their solution. remarking that they didn't need your input after all. It won't take long before they realize that you're not going to shoulder their problems. This works only if your employees are knowledgeable and can make sensible decisions. If they can't, retrain or replace them. Of course, you can't be a control freak whose only acceptable decision is one that you made!
PROBLEM 5: My carriers drive me crazy! They're unrealistic in their expectations and are not helpful. They ask for business, and then refuse my submissions. But I can't live without them.
ANSWER: First, realize that many of the carrier edicts you get from your field staff come from the home office without their input. Their job is to bring you the company line, whether they agree or not. Field representatives and underwriters who do only as they're told sometimes turn cynical, and there's little you can do to resolve their issues.
But here's a relationship-building exercise that usually results in much better interactions with the carriers at the field office level. When you create and implement your strategic plan, include the carriers you want as your business partners. By including the underwriters, marketers, or field officers in your plans, you merge your goals with those of your favorite companies. The proof comes in the implementation-for both you and the companies. If you 'walk the talk' and your results meet your and your companies' expectations, you'll find them much easier and more cooperative next year. The risk is if you plan to do much but enjoy scant success; relationships with carriers can deteriorate when commitments are made and not implemented. You're challenging the carriers to participate with you in your mutual success. If you do what you say you'll do, but they don't perform accordingly, you'll know that your relationship issues are theirs-not yours. If that's the case, go shopping for companies who can meet your agency's needs.
SUMMARY
It's your decision whether to stay on that comfortable, but boring treadmill. After all, you're making a living and, regardless of your frustrations, being an agency owner is not the worst profession on earth. When the frustrations get big enough, agency owners may weigh the advantages of change against those of retirement. If the pain of change is more ominous than the pain of retirement (or merging out of existence), the decision is obvious. But agency owners must be aware that their contemporaries have met each challenge that they're experiencing and have gone on to break through to profit, growth, and greater professionalism.
Plenty of help is available to attack the frustrations and problems of running your agency-if you're up to the challenge and would like to see your agency continue and perpetuate internally.