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What Makes A Great Firmr> ...5-6565, Fax (707) 935-6515, e-mail catherine@oakandassociates.com, or visit www.oakandassociates.com. ...
https://completemarkets.com/Article/article-post/2061/HOW-TO-BE-A-HIGH-PERFORMING-FIRM/
How To Be A High-Performing Firmr> HOW TO BE A HIGH-PERFORMING FIRM by Catherine Oak, CIC, AAI The more effectively you sell, market, and service, the more valuable your agency. The secret to peak performance is employing the right people, in the right positions, based on their talents and the needs of the firm. Every firm must perform four major functions regardless of revenue size or number of employees. These functions are sales, marketing/placement, service, and accounting/administration. Any firm that wants to achieve its growth and profitability objectives needs to manage these functions properly to operate at a high-performance level, which in turn leads to high value. Let's explore how a successful firm should manage these four key functions. MANAGING SALES New sales, which are the key to growth, are measured by new customers, not additional commissions that materialize from renewals. New customers are necessary to replace business that's lost through circumstances both within and outside of the firm's control. People die, move, or go out of business every day. This natural attrition is inherent in the book of business and, for the most part, is outside its control. The rate of attrition in any firm usually ranges from 8% - 20% annually. On the other hand, attrition can come from factors within the firm's control, such as dissatisfied customers, uncompetitive pricing, and lack of technical expertise in meeting the client's needs. Do high-performing firms use different sources than anybody else for new business? Not really. They simply go after new business more aggressively. Often, they don't even depend on the source of new business favored by most independent insurance agents/brokers: referrals. Instead of waiting for new business to knock on their doors, producers and CSRs in high-performing firms vigorously seek out prospects. Everyone working in the firm has a sales personality and is motivated to bring in new business. The producers in these firms are not being paid 'out of sight' commission splits (such as 40% or more for new and renewal business). A producer compensation plan is established that is reasonable for the services performed and affordable so a profit can be realized. Generally, a well-run firm can't afford to pay an average Commercial commission of more than 30% if it hopes to generate a 15% - 20% profit. Some firms pay more than 30% for new business to motivate producers to bring in new accounts. Top producers are carefully coached and given the tools they ...counts, it should be decided who will service the medium to large Commercial accounts and how best to organize this. There are two common options to servicing these accounts in a firm: an alphabet split or the producer/unit concept. Smaller firms generally use the alphabet split concept, especially if there are few producers and if the CSRs are equally competent. In managing an alphabet split for Personal and Commercial lines, it is essential to keep the workloads for the CSRs as evenly balanced as possible, especially if the CSRs are equally experienced. Assistants handling clerical activities should be shared among the CSRs. The producer/unit concept, (in which CSRs are assigned to service and market the accounts of certain producers), is more common in larger firms and very common in national and public brokerage firms. There can be a problem, however, with the producer/unit concept. Often, 'firms within a firm' can develop, resulting in a lack of team spirit. CSRs might be reluctant to help producers in other units if there is turnover or someone is out due to illness or vacation. Producer/units can work quite effectively if either an office manager or Commercial lines service manager is involved in the managing, training, hiring, and firing of all CSRs employed by the firm. PERSONAL LINES ACCOUNTS In Personal lines, we often see the supervisor or manager also handling the firm's VIP Personal lines accounts. The only organizational structure that works effectively in Personal lines is an alphabet split. PERFORMANCE STANDARDS What are acceptable standards of performance of CSRs in the average (versus high-performing) firm? The average commission per account in both Personal and Commercial lines greatly affects the amount of commissions a CSR can handle. In Personal lines, there isn't as wide a spread in average account size as there is in Commercial lines. In Personal lines, it is more common to judge performance based on the number of accounts as opposed to commissions handled. The employee productivity table (at the end of this article) shows the commission and number of Personal and Commercial accounts handled by a CSR employed in the average firm. The table also shows overall revenue per employee, per producer, and per CSR. Our definition of CSR includes managers, assistants, claims people, and marketing personnel, since their number varies greatly from one firm to the next. The key determinant of who is a CSR is whether that person deals directly with the firm's clients. Servicing costs in a firm can be analyzed best by looking at the CSR payroll and operating expenses relative to commission. Typically, firms have servicing costs ranging from $ .30 - $ .45 per dollar of commission. Obviously, the lower the servicing cost the better, leaving more dollars available for selling and administrative expense, as well as compensation to owners and non-owner producers. <
https://completemarkets.com/Article/article-post/873/Pulling-New-Clients-To-The-Professional-Services-Firm/
Pulling New Clients To The Professional Services Firmr>
PULLING NEW CLIENTS TO THE
PROFESSIONAL SERVICES FIRM
by John Graham
It's taken long enough, but the professional services field has discovered marketing or, perhaps more nearly accurately, the value of marketing. So if you're waiting for word-of-mouth to attract new clients, you have a long wait ahead of you.
Take a look around at who's marketing what.
Business consultants are marketing mavens. In fact, some of the largest advertisers in the Wall Street Journal are consulting firms. The number of business books authored by consultants keeps climbing. For example, a popular book on the value of chief executive officers is a thinly-veiled promotional piece for a major financial-services firm. A book-length quarterly journal published by a big management consulting company presents an intriguing and attractive mix of fact and opinion to position the company as the expert.
Several of Boston's largest law firms have gone to casual dress codes. Rather than hide this not-so-subtle change, the firms made sure they got national news coverage to recruit eager young lawyers and attract laid-back technology clients. Some more aggressive personal injury lawyers are abandoning their high-priced high-rise offices for shopping malls to be more approachable and accessible to prospective clients.
The walls of restraint are tumbling down. To be sure, stodgy tombstone ads still announce the appointment of partners in law and accounting firms. The debates over 'the ethics of marketing' are mostly irrelevant and marginalized, though.
Some professionals of all types - accountants, lawyers, financial planners, dentists, doctors - believe they're a little above everyone else in business. Some believe the quality of their work is the only marketing that matters.
Actually, marketing is perfect for professional services. That sponsored book has one goal: to make believers out of readers, some of whom will recommend hiring the financial-services firm it touts. The title of the book names the targeted reader - the CEO, the decision-maker who says, 'Let's get this company in here.'
By definition, that's good marketing: creating customers who want to do business with their company and no one else. Effective marketing harnesses the customer creation process.
Successful professional services marketing can be summarized this way: Be perceived as the solution to the problem when the customer has a need. The principles of marketing professional services are all the same for the international firm and the small local company alike. Here are the objectives:
Marketing lets a professional services firm pre-establish a relationship with a client. For example, referrals are rarely based on detailed inquiries into a particular firm's competence. Usually the selection of a lawyer, doctor, or accountant is a low-involvement decision. Someone says, 'I know a great CPA firm,' and that's recommendation enough. Whether the firm has the necessary expertise fails to become an issue.
How many times do people engage a law firm to handle a particular problem without even asking if it has expertise in that field? This process is inefficient and often brings in less-than-optimum clients.
The basic marketing task is to pre-establish a relationship with a prospect to become their professional of choice. Without recognizing it, the prospect has made a buying decision, often long before they have a specific need.
Marketing builds the perception that a professional services firm is the leader in its field. Marketing can be extremely powerful in this area. Clients gravitate to successful professionals. For example, a dentist specializing in implants has impeccable credentials but is less than successful. Another dentist who lacks the experience and credentials of the first one has an extensive implant practice. Why the difference? The second dentist, who has made a commitment to marketing their services, is perceived as the leader in the field.
In professional services, it's essential to be recognized as the expert, the cutting-edge leader.
Marketing pulls clients into the professional firm's orbit. The goal is to be perceived as the professional of choice by client and prospect both. Clients like to act as if they have a close relationship with a professional services provider, regardless of whether they actually do: They refer to 'my' doctor, lawyer, accountant, insurance broker, and so forth.
Marketing helps cement the client relationship. This is essential because professional relationships are more vulnerable now than they were in the past. Accounting firms can't depend on keeping the same client companies for decades, and other professionals have the same problem. To retain your clients' business, you must keep making them feel that engaging your services was the right decision.
The quality of your work is important, of course. But competence alone doesn't build relationships. Client relationships must be reinforced continually, or the client will eventually make a change. Marketing lets you communicate the reasons that selecting your firm was wise.
These techniques can help a professional services firm best utilize a marketing strategy:
Marketing helps create the right identity.Many professional services firms cling to a dull, stodgy identity. Massachusetts attorney Thomas Montminy, whose firm specializes in collections, wanted to ...ic and doesn't get updated often. One firm received an e-mail asking why the usual rotation of articles on its Web site had stopped. The person who wrote the message said they looked forward to the articles and was disappointed not to find them. Of course, the firm began a proper rotation schedule.
An effective Web site carries helpful information, tells visitors about a company, and encourages interchange and requests for information.
The most pressing marketing issue when it comes to Web sites is promotion. A major source of advertising revenue for The Wall Street Journal, for example, is from companies spending millions of dollars attempting to attract customers to their Web sites. Any cost of a Web site must include an adequate promotional budget.
These are just a few of the effective marketing techniques that professional service firms can use successfully. As part of a consistent, unified marketing effort, they attract prospects to you.
Today marketing isn't a luxury for professional services - nor is it an option. It's a necessary element for building a stronger professional practice.
More importantly, an effective marketing program frees professionals to do what they do best - give clients top-quality service instead of squandering time looking for new business.
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