Ways You Are Running Your Agency out of Fear and How To Stop

One of the largest P&C agencies I know does the unthinkable.  They requote every customer at every renewal on personal lines.  Why?  They are scared.  They are afraid their customer will find a better price somewhere.  They are afraid their customer will leave them without telling them.  They are afraid their customer will get angry that they were not being managed properly.

By acting upon those fears, what are they doing to their agency?  They can’t grow.  The amount of work devoted to keeping these customers forces them to work well below capacity.  Even if they can stay PIF positive, they lose WP and therefore commission dollars every year.  On top of this scenario, they grow dangerously close to damaging their profit-sharing by degrading the value of their carrier books and relationships, as well as diminishing the book’s ability to absorb losses.

What is scarier?

Don’t feel bad if you find yourself in this story.  We all do it.  The media, friends, the internet, colleagues, carriers, etc. love telling scary stories and wallowing in fear.  It gives us something to talk about, and injects a level of the dramatic into our lives.

After a while, fear becomes second nature.  Rather than trusting your customer, because they bought from you on trust and relationship, you default to fear.

You think: “They are calling, something must be wrong, I must fix it before they leave.”

Rather than talking with the client, and discussing what they have and why, we run to the comparative rater to give them a cheaper option whether they are asking for it or not.  (By the way, you and your customer can always find a cheaper deal, so remove that worry)

How do we combat fear?  The big way is Trust.  Trust you agency.  You are a professional.  You sold them the best product at the best value.  You have their interest at heart.  You know the value of staying somewhere long-term rather than jumping the customer from carrier to carrier.

Trust your customer.  They need you, and want your advice.  Assume the best from them and not the path of fear.  Develop this relationship rather than becoming an automated vendor they push for a cheaper product every time they dial your agency.

One agency I have worked with did this.  They were in a market where a large percentage of their book of business was skyrocketing and they didn’t have the manpower to remarket everyone.

This scenario forced them to do something different.  They talked to every customer that was receiving an increase, but rather than calling them with a new price proposal.  They shared the increase news, reviewed their current product, and discussed how they could adjust coverages, deductibles, or even provide new products to stabilize the increase.

The results were surprising to the agency, to me, and to my colleagues.  Retention increased, as did revenue, because of the price increase; but also because they sold new product due to the customer contact.  Not everything was rosy and perfect, some clients left, but the rise in price and product dramatically offset any loss.

In a down market, they saw growth and generated company profit-sharing when most agency peers did not.

Run from fear (they can smell it), and trust yourself, your agency, and your client.

The Window to Your Staffing Soul

Every agency owner has goals and objectives for their agency.  Every owner has expectations and ideals for their staff.  The problem is that the rest of the agency doesn’t know them.  Where this is especially insidious is staffing.

Here’s an experiment to try with your staff.  Ask each staff person to write out what their major tasks are each day.  These can’t be things they want to accomplish, but things they actually do each day.  If they need to, they can keep a log for a couple days.  Please let them know that this is not being used to review performance.  Then ask them to write a job description of what they do as if they are the boss.  Finally, get them to rank out their tasks by priority.

I think you will be surprised at what happens.  In most cases, their daily tasks may not be far removed from you desire, but how they rank the task will shock you.

By doing this exercise, you create a dialogue and conversation about what is important in the agency.  This can be a starting point for aligning everyone to the goals of the agency.  You may be able to eliminate or minimize tasks.  You might even find areas of strength and passion that you did not know about before.

If nothing else, it will help when hiring new staff because everyone understands what is important.

Free Agency Consulting

Free is never free.  You’ve heard this before.  It’s true.  What I am about to write is free, but it could be scary and painful.  Risks will have to be taken, trust given, and trust received.

Our industry is full of consultants who charge for advice.  There is nothing wrong with this.  In fact, I would love to have some of your money.  If the the advice you pay for creates change that moves you closer to your goals then it was probably worth it.

But, I have a way of getting free advice.  Have you ever done case studies?  If you went to business school, case studies abound.  They are like those maddening high school word problems in math, but with case studies there could be multiple answers to more complex problems.

Create a case study for your agency.  Detail out your written premium, customer count, quote activity, marketing program, number of staff, pl vs. cl vs. lh, etc.  List internal strengths and weaknesses; marketplace opportunities and threats.  Print our your goals and business plans.  After you finish, package it all up and give it to another agency for feedback.  That’s the hard and scary part.  Find someone you trust that will not use it against you.  Require them to do the same.

In looking at someone else’s agency objectively, you discover many areas of growth and opportunity.  Recommendations will flow like water because there is no emotional history or baggage.  The same will happen with your partner.

Exposing that much of yourself to another agency is scary, but if you find someone who you trust and is willing the benefits are huge.

Or you could pay me to do the same.

Find Your Strength Zones

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I fancy myself a vegetable gardener.  If you visited my backyard, it would look more redneck than zen.  I am afraid I am only one step away from planting in tires or bathtubs.  Even though my sense of gardening aesthetics is extremely lacking, I do understand zones.  If you garden, you understand what I mean.

Zones are geographical areas that have similar climates-mostly things like humidity, rainfall, avg temperatures, first and last frost dates.  You should quickly learn your zone because each seed packet will tell you whether the plant is appropriate for your zone.  This is common sense and non-gardeners understand this.  Bananas don’t grow in the arctic circle, and sugar maples don’t do well in the Sahara.

Your agency has zones.  These are places of deep fertility and abundant production.  Do you know where they are?  If you want to grow and improve, these are the places to start.

Think about what each individual in your office does really well.  Who is your most efficient CSR?  Who does the best job account rounding?  Who has the highest close rate?  That is a zone.  Now find out why that person is better.  Then either help them grow deeper and wider in that area or use their expertise to broadcast their skills throughout the office.

We often try to implement change in places where change is difficult.  It is much easier to become better in the places we are already good.

For example, one agency I know was discussing improvements to their agency.  In PL they had 5 people, we discussed the strengths of each person and they mentioned that one CSR in particular was always ahead in their work.  We went back and examined her behavior and used that to make overall workflow recommendations.  I have seen similar actions where the best closers are turned into your new business people and others are assigned to service related activities.

This is not only true with your staff, but in other places such as your referral sources.  Which ones are most fruitful today, and how can you develop it for greater success?  Are there any behaviors among sources that can be transferred?

Examine your strengths and multiply.