According to a study by Conning & Co., small agencies have experienced flat growth over the past five years, with owner compensation down 4% and profit margins off by 2%. Midsized agencies dropped 9% in total revenues as profits dipped by 2% (figures reported in a recent issue of The Weekly Marketeer). Yet some agencies have grown and prospered in that time. Their success comes from a combination of management strategies, hard work and, occasionally, luck.
Navigating through tough economic times, changes in carriers' directions, automation choices, product developments, and competitors' encroachments requires charting a different course from everyone else. An ideal course combines vision with attention to detail.
PRODUCERS PRODUCING
Good producers make new friends for the agency and help it grow. Great service people support your producers' success by keeping the clients enchanted with the agency. Don't expect your producers to be involved in renewals, in maintaining other levels of service to existing clients, and performing other tasks which distracts them from new business development.
As automation eliminates the clerical functions of the agency so that every employee becomes a specialist in their field-marketing, risk management, service, sales, or accounting. Producers sell the agency and its unique benefits. The clients belong-more in an emotional, than financial sense - to the agency, rather than to the producer. This increases the strength of the agency and its equity value. The smart agency coordinates the activities of producers and CSR's and manages the new business process to ensure new clients' comfort with the whole agency team. On large enough accounts, the CSR's personal visit to the client helps establish the CSR as a service professional handling the account. When clients visit the agency, the CSR will be as much involved, if not more, in the meeting as the producer.
COMPENSATE WHAT YOU WANT MOST
Paying producers more for new business than for renewal business encourages new business development. It moves the accountability for renewals to the agency's service staff. It doesn't mean that producers divorce themselves from clients they wrote in prior years, but it lifts the burden of handling both new and renewal business off the producer. Some producers worry that the client won't be as close to the CSR and won't stick with the agency; but it is the CSR who gets to know the client and will develop the relationship through the policy year. As one producer recently said, 'I'm finally happy with where we are with our commercial clients. We're not just their agents. We have a personal relationship. We speak naturally about things other than insurance. They say no to competitors' overtures because they want to deal with us because they like us.'
CSR JOB DESCRIPTIONS SHOULD INCLUDE SALES (...in so many words)
Paying CSRs a per-policy bonus or incentive or prize per rounded policy, over and above their salary, communicates a harmful message that selling is more than their normal job duties. The CSRs job is to manage, please, and protect the assigned book of business. Good service means clients are protected properly. Taking requests from the client happily and intelligently isn't enough. Advising them what other coverages they need is an essential to service. If the client sees the point and buys the coverage, the CSR has sold something-or has the CSR simply provided good service by properly protecting the insured? Both jobs are important.
When can CSR's sell? Every day if the agency creates a new department position of Processing (or Technical or Expediting) CSR. This is a technically competent person who can take all the piles from the other (Contact CSR's) and do the policy-checking, invoicing and follow-up work. They can handle this job because the phones don't interrupt them. The CSR's voices are lighter and schedules more open, allowing them to take a more marketing-oriented approach to their jobs.
If the agency is forced by circumstance to take on interactive interface for the carrier, the Processing CSR does it so the Contact CSR is not taken away from taking care of the clients.
PUT IT IN WRITING
Each employee's sales goals-whether they be new business development for producers or rounding goals for CSR's-should be specified in their respective job descriptions and performance standards. Each employee should review those goals, revise them appropriately with management, and sign off on them. Of course, management must first provide the automation, training, and markets to facilitate achieving those goals.
Performance review time recognizes achievement, not effort. Goals achieved or exceeded means a great raise. Missing goals leads to a poor to medium raise.
TRENDS AND HISTORY
These are sensible tools to help the sales effort and integrate automation to track the sales process and monitor success. Technology will continue to change, but the underlying fabric of success still relies on naming the goals and getting to them in the straightest line possible.