New Business Development: It's More Than Sales

NEW BUSINESS DEVELOPMENT: IT'S MORE THAN SALES

by Kevin Grant CFP, ChFC

According to The Best Practices Of The Leading Independent Insurance Agencies In The United States, a study commissioned by the Independent Insurance Agents of America, the number-one factor most critical to a firm's success is new business development. The study goes on to point out a number of 'key business practices' that can increase an agency's revenue picture, client service effectiveness, and overall profitability. Used properly, the information in this study is a gold mine.

Several of our Texas clients have uncovered areas in which they could improve, using the Best Practices study as a benchmark. The problem arises when they move to correct their problems. The Best Practices study does a good job of helping agencies spot their weaknesses, but it doesn't go far enough in helping them develop a plan to correct these weaknesses. That's a lot like calling someone's baby ugly. It might be the truth, but it sure doesn't make you any friends.

Most of our clients were aware of the need for new business development before the Best Practices study pointed it out to them. What they really wanted from us was the HOW to increase revenues and profits. We suggest five areas to focus on. When perfected, these five factors combine to produce exceptional new business development.

It's no accident that the factors are listed in the order that they are.

Each one builds on the one before.

Motivating a group of producers, CSRs, and support staff without a clear vision of where the agency is going is like trying to milk a wild cow: lots of hair flying and creative cussing, but very little milk. When people don't have a clear understanding of the agency's goals, along with a belief that those goals make sense, you can't expect them to follow you enthusiastically down the road. Goals, objectives, missions-whatever you name the horse you're riding-need to be two things before they are effective: clear and communicated.

A vision that is clear is one that everyone in the agency is familiar with -- one that they use in daily decision making. It's one that they all believe in as well. Don't expect to have buy-in when the agency vision includes 'tripling revenue production while simultaneously reducing expenses by 25%.' As they say down where I'm from, 'Ain't gonna happen.'

A clear vision does not include twelve-syllable words and obtuse phrases like 'strategic repositioning of capital assets.' What in the world does that have to do with prospecting new accounts or keeping clients happy? The best visions are simple, like the Boy Scouts': 'Be Prepared.' Now, that's one everyone can remember and support.

Finally, an effective vision is communicated. It's not something for managers only, or to be buried in all the rest of those files stacked on your credenza. No, a true vision is a living, breathing, tangible thing that everyone has a part in creating and growing.

With a clear, simple, and well-communicated vision, your agency is ready for the next step in developing new business.

I know, 'client-centered' is the buzz word of the nineties. Despite the fact that everyone and their dog is jumping on the 'client-centered' band wagon, there are actually some useful ideas in this concept.

First, the basic premise of client-centered anything is that you have to focus on what the client wants, not what you think he or she wants. How? A good start is to ask. The best agencies are constantly asking their clients what they can do to be better. Even if the person you're asking is not a client (yet), it's still fair game to ask for his or her input. In fact, this is one of the smarter ways to cultivate prospects.

Second, position yourself as a client-centered kind of person. That means giving serious thought to the unique challenges of your market and spending the time to develop innovative ideas to overcome them. When was the last time you spent the time to work out a truly creative solution for a client's problem? If you can't remember, it's been too long.

Finally, communicate your unique, client-centered ideas and benefits to anyone who will listen. Do you currently write articles that appear in magazines that your clients read? Do you go to their association meetings? How about advertising where they are most likely to see your ad? If you didn't answer yes to these questions, maybe you'll want to consider whether you're really committed to the markets you're working in right now.

Client-centered marketing driven by a clear vision is not enough, though.

You also need:

My grandfather told me 'the road to hell is paved with good intentions.' I suppose that's true, and the corollary must be 'the road to good intentions was built by people in sales.' For instance, how many people in your agency are named Gunna? I bet more that half. Just ask, 'Have you started your new marketing campaign?' 'No, but I'm Gunna.'

Many of our clients did not realize they had hired so many related people. It's mind-boggling. If you are surrounded by people named Gunna, rather than emulate these fine folks, keep the following ideas close to your heart.

First, 90% of success is just showing up. If you show up, ready to make something (anything) happen, you're further along than most people.

Second, it's not enough to plan your work. You gotta __________. If you don't know what goes in the blank, ask the top producer in your office. He or she is intimately familiar with the concept. OK, so the top producer is out of the office visiting clients (go figure). The answer is work your plan. Don't settle for 'paralysis by analysis.' Get out there and do something.

Finally, anything worth doing well is worth doing poorly. Yep, that's our motto. You see, a motto like this has an inherent bias for action. It simply means that you are willing to work at your plan while you perfect it. It's amazing how you can produce so much business while you're working on getting that marketing plan to 'finally come together.'

A clear vision, client-centered marketing, and activity will help you get 'em in the barn. It takes a little more to keep 'em there. It takes:

In his latest book, Raving Fans, Ken Blanchard describes the typical customer service goal of the typical service company in America as 'to be no worse than the competition.' Hoo boy, that's an inspiration to folks everywhere, don't you think? The fact is, disinterested, uninformed, uninspired service is about the fastest way to lose a client. Most will put up with slow claims, bungled paperwork, and even cheap beer. But none of them will put up with being treated like stepchildren.

Why is it that an industry-standard report like the Best Practices study has to mention things like 'promptly return phone calls' and 'meet at least annually with clients?' I thought that stuff was Remedial Business 101 at Dallas County Community College. And yet, these are the kind of suggestions that were made by the best and the brightest.

The best and the brightest know that good customer service is about details. 'It's the little things that matter,' said mom when we forgot (as in, ignored) our duty to write thank-you notes after the birthday party. Mom knew, as do the best in our business, that one of the strongest human needs is to feel appreciated.

Vision, marketing, activity, and customer service are the tough part. If you have these figured out, the last step in new business development is simple:

Did you ever close the barn door after the horse was long gone? It happens every day in our business. We are going to suggest that the 'challenge of client retention' is really nothing more than the back end of the horse. That is, if you're looking at the back end of the horse, it's too late to lock the barn. Similarly, if you're focused on your 'client retention problem,' you're missing the bigger picture.

The fact is, clients don't leave you because your rates went up (OK, most clients don't) or some other single issue. They leave you because they found some one else who loves them more that you do. Proving your love takes more that a few hours of the old 'client retention program.' If you want to focus on client retention, set your sights on perfecting the first four parts of the new business development equation. Do that, and client retention will never be a problem.

A clear vision, client-centered marketing, activity, and customer service. These are the keys to effective new business development. With them, you have a sure win. Without them, well, as the farmer told the city slicker asking for directions, 'You can't get there from here.'