Monthly Archives: August 2012

Just Ask

As shocking as it may seem, if you can get your staff to ask for the sale, you are doing better than 90% of your competition.

How do I know this?  Years ago (8 yrs), I was part of an experiment where we called agencies throughout the country and did mystery shopping.  Here’s the setup.  We called looking for full coverage with decent liability limits of 100/300.  The idea was to be an ideal customer so the agent would have some interest in us.  We were trying to learn about agent behavior, and see if we could pick out some success markers of the best agents that we could use in training.  We had a checklist of questions that we were looking for the agent to ask.  Most of the questions dealt with basic underwriting questions.

The last question we looked for was whether the agent asked us to buy the policy.  We were not looking for any hard sell tactics.  Merely asking if we wanted the policy, or when we could come in would have been sufficient.

90% never asked.  Most ending the call by giving the rate, and saying something like, “Call us when you are ready” or “Was that good?”

One reason to ask for the sale, is to stop the customer from shopping.  Who cares if you are the fifth agent they have called, as long as you are the last!  A simple assumptive close could work wonders to close rate, because I guarantee your competitors are not asking.

Make sure everyone quoting in the agency is asking people to buy every time.

Ask!

Do Something for Growth

Warning!  Short post.

One is of the greatest secrets to business, life, and growth is to just do something.  In my own life, I have often waited for something to happen rather than make it happen.  Unfortunately, I see this behavior in a lot of agencies I work with.  Complaints are raised about the economy, the do not call lists, the direct companies, etc. all while they sit waiting for the phone to ring.

Do something.  Call your best customers, and sell something else.  Ask for a referral.  Have a referral program.  Call every business within a mile of you.  Ask for their personal lines as well.  Get internet leads.  Put together a marketing plan.  Leave the office.  Join a club.  Be part of the community.  Ask.

If money is the issue, create a plan and take it to your companies.  One or more will find the money.  Just ask for it.

Action is always better than inaction.  A decision (even a bad one) is better than no decision.  Create movement, then worry about tracking, measuring, and managing.

What are you going to do today?

Creating Talent in Your Organization (part 2)

Creating Talent in Your Organization (part 2)

Deliberative practice creates better people on your team.  In the previous post, we discussed this thesis from the book Talent Is Overrated: What Really Separates World-Class Performers from Everybody Else, and how he suggests we create incredible performance for ourselves and our people.  In this post, we will give suggestions of how to apply those models to our industry.

Let’s look at how each model can be used with our organization.

1.  The Music Model.  The may not be applicable to our personal lines staff because of the high level of phone work they do, but anyone in the staff doing sales presentation to large groups could benefit.  Presenting in front of another in the office, and then spending time analyzing each idea could be extremely effective.  Hopefully, sales people are giving these presentations often, and it would be burdensome to do this with each, but one session per month could be sufficient to improve skills.

2.  The Chess Model.  This piece is especially effective for service situation.  Create problems that a service may encounter whether they be billing, claims, angry customers, coverage issues, etc.; and work through how to address the various scenarios.  For a group have individuals solve each problem and then come together to discuss the pros and cons of each persons approach and then create a group solution. Common issues and solutions could easily be setup in a best practice manual.  While not extremely fun, it could make for much more effective team meetings.  I know of some agencies that monitor and record every sales call their people take.  Random calls could be selected and listened to in a group.  Analysis can be given looking especially at ways it could be done better.

3.  The Sports Model.  Role playing is dreaded by everyone I have ever encountered, and it qualifies as not fun under Colvin’s definition of deliberative practice.  Yet, there is almost nothing more effective.  Practicing sales calls and phone consultations again and again in front of groups is a perfect way to hone skills.  This is uncomfortable, and in my experience worse that real-life situations, but this is precisely why it works.

One of the huge benefits of constant training is that it makes you much more conscious of your own business behavior and you begin to self correct and critique which enhances performance.

Have you used any of these ideas in your office?  How could you implement for yourself and staff?

Creating Talent in your Organization

What’s the greatest need in your insurance agency?  One thing I see time and time again especially in personal lines, is the need for further training.  The independent agency channel does a really good job with product training.  There are multiple courses and designations that help get better and better understanding coverages and how they apply to various situations.

Ongoing sales training and customer relations are really the areas of need.  How do we create these programs within our agencies to be more effective at closing sales and improving customer retention?

This answer to this questions lies partly with a book I just finished that gives pertinent insight into training.  The book is Talent Is Overrated: What Really Separates World-Class Performers from Everybody Else.  His thesis is that superior performance in all areas of life is not ultimately governed by inborn talent.  The real key to performance is “deliberative practice”.  He defines this in five ways:

1.  It must be designed to improve performance (preferably by a teacher).

2.  It must be repeated a lot.

3.  Feedback must be available.

4.  It is highly demanding.

5.  It is not much fun.

He gives three models for this type of practice and applies it to business in multiple ways.

1.  The Music Model.

A student practicing a composition repeatedly is the paradigm for this.  It is rote practice of a static form.  In business, practicing for a presentation or speak would qualify.  Taking a presentation and analyzing it idea by idea, striving to communicate each main idea most effectively further enhances the deliberative nature.  The presenter could also search for examples of others who effectively communicated the same idea, and study and glean from their content.

2.  The Chess Model.

Anyone who has played chess understands this example.  The instructor sets up the board and forces the student to find solutions and maneuvers in multiple situations.  In business, this manifests itself not in move selection but decision making.  The difference between this and the music model is that each situation is different and you are not responding to the same composition everyday.  What it teaches is the abililty to make clearer and quicker decisions.  Business schools focus almost solely on this as they make student study and work through case studies throughout their curriculum.

3.  The Sports Model.

The athlete strengthens areas of his body that are required to complete his assignments most effectively.  He routinely goes through the motions of certain skills to enhance their efficiency and power.  Picture the basketball player shooting thousands of free throws and syncing his arms, wrists, fingers, and legs to provide consistent successful movement on each shot.  In business, this can be accomplished by going back to our basics which often include writing skills and basic math abilities.  In sales, role playing is the most effective way of increasing people skills.

In the next post, we can explore how these apply to ourselves and the staff we manage in our offices.

Pull these levers for growth

Personal Lines insurance growth can be boiled down to three levers that can be pulled for growth.  By maximizing these three, you can help effect increases and change in the agency.

The three levers are Retention, Close Rate, and Quotes.

Here’s an example.  This year you want to grow your 100K revenue shop 20%, which means your target is now 120K in revenue.  How does that happen?

Currently you are at 80% retention and you close about 30% of all quotes.

Each policy you write generates about $100 in revenue.  So over this year, you want to increase income by 20K, does this mean you need 200 new policies?  The answer is yes, if retention was at 100%.  We said your retention was at 80% so you are going to have to make up 20%.  In policy terms this means you are going to lose around 200 policies this year.  So instead of needing to write 200 new, because of retention you need 400 new.

On a monthly basis, you need to be writing about 33 new policies.  So how many quotes are you going to need to do if you want to hit that number.  Your close rate is 30%, so you will need 110 quotes a month to hit that number.

Because of the three levers, you now know exactly what you need to do each month to hit your goal.  However, this strategy is really based on driving quotes.  What if you improved retention or close rates?  Whatever you do to one lever will affect the others.

Let’s say you are able to increase retention from 80-85%.  How does that affect your targets?  Instead of having to replace 200 policies this year, you now only have to replace 150.  Your total new business target becomes 350, which is 29/month; with a require 100 quotes a month at the 30% close rate.

Look at the close rate lever.  If we could improve from 30-40% close rate, what impact does that have?  Take the original example of 33 new policies a month.  At a 40% close rate, you will only need around 80 quotes a month.  That’s dramatic.

Combining the two examples show real power.  Let’s improve retention to 85% and close rate to 40%.  You only need 29 new policies per month, and that will only require 70 quotes.

Each lever has real power, but by improving upon all three you can generate growth at a much greater rate.