The Lost Business Log: A Simple Customer Retention Tool

Don’t Let Quiters Ruin Customer Retention

The “Lost Business Log” is an easy tool you can use today that will help you get a handle on your customer retention.

not this type of log

This is a back-end tool that allows you to track customers leaving your agency.

You may be thinking, “How can counting my losses help me keep more business?”

The Lost Business Log does several things that will improve customer retention.

  1. It never lets you forget that customers are being lost and need to be replaced.  Even if you are only losing customers through death and moving, it is important to track because while there was nothing you or your companies did to send them away, they are still gone, and you need to replace them.  

  2. It forces you to change your marketing before it is too late.  Think about our first example.  If death and moving were the only reasons people were leaving, what does it say about your book?  Your demographics could be old or full of transitional type customers.  How does this change your marketing?  Reach out to younger customer or look for a more stable demographic.

  3. It gives you a crystal ball on at-risk customers. What are reasons people move: price, customer service, claims service, etc. The log forces you to ask these questions.  Perhaps it causes a followup call because they left without telling anyone.  You can send out an exit survey on why they left (email makes this easy). You can get them to commit to becoming a prospect again when things change. If possible find out their x-date, new company, and pricing. Then they become a prospect again.

  4. It can help you redirect referral sources.  If a particular lead source, whether outside like a realtor, mortgage lender, car deal, etc. or inside like a customer is the source of a lot of lost customer you can stop the lead sources.

  5. It can help you pre-qualify new business.  You may find in looking at your lost business that there are certain characteristics they all have in common.  They be monoline customers, multi-incident, single car, single driver, etc.  If you find these to be true, it can change how you quote and sell.

Here’s how to set it up.  You can use or paper or something like Excel, and include the following columns:

Customer name         Policy type         New company         New price         Xdate         Reason   

Don’t over-complicate the process.  Place a spreadsheet on everyone’s desk, and review as part of your month end checklist.

You will find this simple task will make a big difference, and help everyone feel the pain of losing customers, leading to conversations about how to keep them longer.

Theron Mathis


Google Reader and Your Insurance Office

Google Reader can be a powerful tool in your agency’s marketing arsenal. RSS Feed

Unfortunately, last week, I logged into Google Reader, and the unthinkable occurred.  A message appeared that Google was shutting the service down effective July!  Horror of Horrors.  Suddenly the internet was filled with a buzz over Reader’s demise.

Why is this a big deal?

First, many readers of Productive Agency, subscribe to the content through Google Reader and need a replacement (recommendations below).

Second, over the past several years, Google Reader is how I have read news regarding the Insurance Industry, Sales, Marketing, Agency Management, my favorite Sports Teams (Go Cards!), etc, then sharing it with agencies, peers, and social media.

Google Reader lives off of a technology called RSS.  RSS is computer code called a feed that website designers can use to share and publicize their content.  The feed for this website is .

Every site on the web with changing content has a feed, and rather than coming back to that site again and again to look for new material, you can subscribe to a feed through a reader, visiting the reader for updated news.

Currently I subscribe to over 400 websites.  Some never or rarely update, but this saves me a tremendous amount of time.

If you don’t currently use a Feed Reader, but want to stay current on industry news, then a you will be well served. Not convinced?

Do you need content for weekly sales meetings?

What about material for your agency newsletter?

Are you ever asked to provide insurance info for local papers?

Are you struggling for content for Facebook, blogs, or other Social Media outlets, a reader can help?

So with the demise of Google Reader, what are the alternatives?

1.  The Old Reader

2.  NewsBlur

3.  Feedly

4.  Netvibes

5. Pulse

Each one of these have their own benefits, and shortcomings.  Currently the Old Reader is having trouble processing all those trying to migrate over from Google Reader.  Eventually this should be worked out, which will be good, because it has the closest feel to Google.

Depending on how you access the web is a consideration as well.  Are you always at a desktop?  Do you use a Mac or PC?  What about an iPhone, iPad, Droid, or Kindle?  Some readers have special apps and their readability may vary on each device.

So far, I like Feedly the best!  It was easy to move over my current subscriptions, the look is great, and there are a lot of features that make it easy to share information among other platforms such as Email, Facebook, Twitter, LinkedIn, etc.

The power all these bring to your Agency is that they can help you become a content expert among peers and customers.  To get a sense of how I use Feeds to share information, check out my LinkedIn page.  I post at least two pieces of Insurance/Sales information daily, and I don’t spend a lot of time scouring the web for the info. I let my reader do the work.

To Your Agency Success,

Theron Mathis

P.S.  What are your favorite sites and sources for Insurance Content?




Picking a New Pope and Your Insurance Agency

smoke signalsYesterday the world witnessed the election of a new pope. 

It’s not often that announcements are made with smoke signals in today’s wired age.

We like tweets, Facebook posts, emails, or the old-school newspaper ad, but not a smoke signal!

Smoke is intangible.  You can’t catch it and it dissipates quickly if you are not looking.  But don’t think your employees aren’t looking for your smoke signals.

Ask your staff in a moment of unfiltered honesty and see what they say.

Every day the office staff waits for your arrival looking for the white or black smoke trailing in your wake.

I see it all the time.

The staff is laughing, happy, positive, enjoying their work and communicating that joy to the agency customers.  Then the boss arrives, and a black cloud settles over ever desk.  Mouths turn down, shoulders slump, and everyone settles into the grind.

But it’s not always so dark.

I have seen the opposite.  The staff is gossiping, looking at each other bitterly, complaining about the person two cubes over, and griping over stupid customers.  The owner walks in with full fanfare, almost skipping into the office, smiling so hard you could swear the corners of his mouth are touching his ears.  He greets everyone with such joy, that you immediately feel the room lift.  The dark clouds part and the sun shines.

Within seconds, the tone of the whole office changes and work becomes a destination not a dungeon.

As a leader, you will never imagine how your attitude affects your office.  Yet, it is more powerful than any word you can say.

Not only will it impact your office, but it will trickle down to your customers.

Next time you make an entrance, notice the change in tone, and it might give you a good idea what smoke signals you are sending!

How to Survive A Book Transfer (And Grow)


Book Transfers Happen!  (see the last post)  

Here's my book of business...what can you do with it?
Here’s my book of business…what can you do with it?


Insurance Agencies look upon them with dread and fear.  While they will save you when a company goes bad, they feel like an unexpected E/R visit.

Thoughts of gloom race through your head:  This will overload my staff with work.  We will lose customers.  We will lose money.

Don’t get lost in the weeds of negativity.  There are kernels of truth in the fears above.  It won’t be all rainbows and unicorns, but you will survive and can grow your agency in spite of the challenges ahead.

If you think of the transfer process in three separate phases, you can attack it in smaller pieces.

Phase 1:  Negotiating

Phase 2:  Processing

Phase 3:  Growing

Phase 1:  Negotiating

There are more options here than you realize.  First ask yourself, what is more important to your agency at this moment: extra compensation or workload relief.  There are other factors you can negotiate, but these are the big ones.  You can probably get extra money and help in moving the book, but usually if you get more of one you will get less of the other, so decide about this up front.

Compensation:  Compensation is usually based off the profitability of the book.  The company will want to know at minimum: 3 yrs of loss performance, premium, and policy count.  Breaking this up by line of business helps your case as well.  The more data you can give your companies the better.

Compensation will usually come in the form of an override.  Some will pay this monthly, quarterly, or even the end of the transfer period.  I have seen examples of overrides growing over time based on how much business gets moved.  Also consider any commission differences that might exist between the carriers.

Workload:  Workload relief is often worth more than compensation.  Technology has been a big help here.  Gone are the days of printing mountains of apps, bundling them in boxes, then shipping them to a company far away.

Management systems allow a lot versatility.  PDFs of apps can be generated and emailed.  Some companies even have the ability to remotely access your system and extract the data.  If the company is not doing the data entry, most systems allow you to bridge data into company raters simplifying the process somewhat.

Decide up front who is going to do the quoting and who will do the issuing.  If a company does both, the most you will do is contact the customer with the new offer.

Rate:  Companies have gotten creative with rate on book transfer.  There’s very little difference between new business and renewal underwriting anymore, but depending on the regulatory environment in your states, companies can often match rates of the expiring carrier.

Rate matching has two components.  One option is the “meet”.  The new company will meet or match the expiring rate, and then over a determined period of time will move the customer to their own natural rate.  This varies from 1 year to indefinite.  Sometimes it be capped at a percentage, and other times it won’t.   These are questions to ask.

The other is the “meet” or “beat”. The new company matches the rate or beats it, if their natural rate is cheaper.  This can be attractive, but the same rules will apply and eventually the new carrier will get to its natural rate.

In my experience, the profitability of a book drives these alternatives, and in today’s market property is often avoided with a rate match, but auto can still be available.

Extras:  There are small things that can be considered that will help with workload.  New apps and forms are often waived.  No downpayments, discount verifications,  and waiving of inspections can be placed on the table as well.

Final word of advice:  Spend time on the negotiating phase, but don’t get bogged down with all the options.  If you have decided you to do a transfer, give yourself a decision date, look at the alternatives, and pull the trigger.

Phase 2:  Processing

Carrier Communication:  Regardless of how much work the carrier takes, there will still be work for the office.  You can divide it up between all staff  or you can assign the process to one person to be the book transfer specialist.  Assigning it to one person works the best.

The insurance company and the agency contact can develop a relationship and it provides one point of contact for both parties.

The most helpful thing you can do is to set up regular meetings between the company representatives and the agency contact.  A monthly meeting, even by conference call, is crucial in the beginning.  Mistakes and weird processing issues always arise, but these constant meeting eliminate small issues becoming big.

Customer Communication: Send out some kind of communication to customers to let them know what is happening.  Don’t worry about creating something, companies usually have templates for this.

Call customers informing them of the new product, so they are at ease with the changes.  This contact is where growth can begin to occur.

No matter how good your insurance agency is, everyone’s account rounding is less than they think.  Digging into a book of business during a transfer will bring this to your attention.  This is a perfect time to begin x-dating those extra lines of business, and you will be surprised how much you can generate.

Underwriting: Because one of your books is under a microscope, you can use this opportunity to shed any unprofitable or problem customers.

Look for problem generators or claim happy folks and refer them down the street.

This can be an opportunity to increase deductibles and limits as well.

Phase 3:  Growing

The transfer is over.  Everyone is relieved.  The book transfer specialist in the office can breathe again.  Yet, there is still opportunity!

Account Round:  In talking with the customers through the transfer, you uncovered opportunities in missing business.  If you gathered x-dates, now is the time to begin an account rounding marketing strategy.

You may find that the company can help you with this.  If you are on your own, turn this project over to someone in house, and begin mining that gold.

Lost Business:  No matter how good you or the carrier is, people will leave.  Put a lost business system in place, sending out letters or emails, providing quotes with your old data (asking for them to update), then following up with calls.

Many will find the grass was not greener with their new agent, but were too embarrassed to call you back and admit the mistake.

The growing phase is easily forgotten, because you are so relieved to be finished with the transfer. But it can create a lot of extra revenue and help you shine with your customers. The secret is to setup your process a month or two before the transfer ends, so you can launch the day as soon as it is over.

Conclusion:  Transfers aren’t as scary as your mind imagines them to be.  Think through the process, write it down, create a system, stay in contact with your people and company, and you can thrive.


Theron Mathis

3 Reasons for Your Insurance Agency to Do A Book Transfer


Have you ever done a book transfer inside your insurance agency?  If yes, then you will agree with the following:

Book Transfers are a pain in the butt and should be avoided at all cost !


Your company has become unstable.  What do I mean by unstable?  The company is unable to remain profitable and is pulling out of the market.  Warning signs for this are downgrades by the rating agencies.  Massive agency cancellations.  Tightening of claim payouts.  Dramatic increase in rates.  None of these alone are red flags, but multiple ones can be indicators that something is going on.  Like your car’s “check engine” light, it may be no big deal, but it couldn’t hurt to ask questions.

Check Engine

 You have been cancelled.  This is not the death knell it may seem.  I have seen many companies cancel good profitable agencies.  There could be something on their balance sheet that necessitates shedding premium in a market, and you just hit their metrics.  Perhaps you got unlucky with storms or shock losses.  Just because they are CATs doesn’t mean they don’t count, someone still had to spend real money to adjust the claim. Whatever the reason, you felt the axe blow, and have to do something.

 The AxeYou have too many companies.  Over the years, I have seen many agencies become company collectors, believing the more markets you possess the greater your success.  This may be true for commercial lines, but not in personal lines.  At most, 3 to 5 companies are the most you really need.  If you have more, look at where your premium stacks up and I guarantee that most of it is spread among 3 companies and never evenly distributed among 5 or more.  One of the dangers of too many companies is that you dilute your ability to make profit sharing.  If this is the case, then consolidating some of the smaller carriers can help earn more profit sharing. 

Wall of Awards

 So, have you found yourself in the scenarios above?  What did you do?  Comment below.

P.S.  Next post:  How to Survive A Book Transfer


Theron Mathis

Why I Hate Non-Standard Auto


If you are new agency, new producer, or have new agents in your office, then this post is for you.

I hate non-standard auto and so should you.

Non-standard auto is a dangerous siren calling out to agents with dreams of easy sales and fast money.

Her call is a half-truth, for as soon as you hook your boat to her rock and enter her lair, the sexy veneer wears off as you see the dangers you’ve entered.

As a new agent, you are hungry and need to produce, and the quickest way to find customers is to reach out to those desperate with the greatest need.  They are the customers with bad credit, no prior insurance, chronic cancel-ers, and dreadful driving records, but they are easy.

You can hang up a shingle advertising to the minimum limit customer, and they will find you, then eagerly tell their friends, but the goldmine you’ve found is a mirage.

Within months, you can write hundreds of policies and the cash flow seems miraculous, until the cancellations ensue, and this is but one reason I hate non-standard auto.

In case you are tempted, here a list of reasons to keep you from building your agency on this shifting sand:

1.  Cash.  Rarely do these customers have checking accounts, and they will load you down with cash.  Soon you will find that 30-50% of your time is spent taking payments preventing you from new sales.  You are making change, and multiple trips to the bank.  The amount of cash you have to keep on hand begins to create a fear of theft.

2.  Endorsements.  The non-standard customer, while seeming to have little risk with low limits and fewer cars than the household account, is endorsement heavy.  They change cars and drivers more than the preferred customer.  People are moving in and out of their house, and cars are breaking so new ones need added.

3.  Billing.  These customers are always on the verge of cancellation, and you may find yourself chasing payments.  If you don’t chase payments, then you will be answering call after call explaining billing nuances and payment amounts.  You may spend minutes on the phone explaining billing, and then never see the customer again.

4.  Referrals.  Like attracts like.  Birds of a feather flock together.  This is where this type of business can become really dangerous.  If you have an established preferred agency, then attracting these customers will begin turning you agency into a non-standard shop.  They will send their friends and slowly your preferred customers will leave as these high maintenance clients eat your time causing you to neglect your best customers.

5.  Profitability.  There is a theory that because the non-standard customer carries lower limits, the potential claim payouts are lower.  This may be true on individual risks, but the frequency of claims and potential for fraud becomes the bigger reality.  Over time, agencies focusing on non-standard auto slowly become unprofitable, and create greater risks to company contracts.

6. Value.  One day you will want to sell your agency or book of business, but there will be nothing to sell.  Non-standard auto creates no equity.  The value of a book of business is based on it’s long-term revenue potential.  Another agent will never pay 1-2 times revenue on a non-standard book, because retention is so low that the revenue will not exist in a year.  At most, you could garner 50% of your revenue.  That is a lot of blood, sweat, and tears without any value to sell at the end of your career.

Take this a warning.  Protect your book.  Protect your customers.  Protect your future.

Do you agree?  Share with your new insurance friends and comment below.



How to Get More Money from Your Insurance Companies

Money in the Cookie Jar

Do you need more money in your agency?

Of course!

Even if you didn’t, would you admit?  No!

There is extra cash hiding in the pockets of your companies, but there are a couple tricks to finding and securing it for your business.

So where are these hiding places, and how can you access them?

1. Profit Sharing Contracts.  It’s been my experience working in and consulting with insurance agencies, that most don’t optimize their profit sharing.  The biggest reason that this happens is that most of us are sales people and not accountants, lawyers, or actuaries.

The other reason is lack of standardization.  You have too many companies to keep up with the nuances of contract language.

Make sure you get your reps to explain the details at least twice during the year: when you make stop loss selection (if offered), and mid-year so you have time to adjust focus if needed.

Stop-losses can lose you a lot of money, primarily due to their cost.  Every company is different and some charge against your loss ratio, while others deduct points from your payout factors.

2.  New Business Incentives.  Company goals are different.  Some need more auto, others want to build their specialty book, umbrellas may be a focus, and others are looking for demographic targets.  Ask companies where they are wanting to grow and if there are any incentives for specific business, you might be surprised and could end up with a couple extra points of commission.

 3.  Marketing Money.  Whether a company has a formal co-op program or not, they all have budgets to spend on marketing.  First find out what kind of programs your companies.  If there is a co-op program, max it out early.  Budgets can change throughout the year, and will disappear if results deteriorate throughout the year.

 If there is no co-op, ask what their agency budget is.  This will give you a starting point so you know how much you can get.  If their budget is $4000 for their entire territory, asking for a $2000 sign will get you a no.

Here’s the real secret for getting marketing money.  Present a plan: how much you want to spend, how you will measure it, and how much it will return.  If you bring them a plan with real numbers attached with a realistic ROI, then you will get money.

The reason this works because your company rep has to make a business case to his superiors to get money for you, and you have made the case for them.

Remember, if it’s not measurable it will be hard to secure money.

4. Company Loan Programs.  Many companies have loan money, and you can use this to leverage their money for your growth.

What is even better is that many of these loans can be forgiven, if you hit certain production targets.

5.  Staff Incentives & Contests.  Whether advertised or not, companies have money that can help you incent your staff to round out accounts, cross-sell other departments, or sell new lines.

These can come in the form of gift cards, online money, catalog points, etc.

The great thing about these programs is that they allow you to give extra compensation to your staff without having it come from your pocketbook.

This comes with one big warning.  If you want to pool the incentives for the agency, rather than  it going to individuals, most companies will balk at the offer.

Did you notice the secret found in each tip?


Be shameless about asking, and get creative.

What are your tips?





Managing Your Insurance Company Rep for Your Success

As an independent insurance agent, the company/agency relationship is crucial to your success.

Yet, I sense there can be a level of irritation or distrust in this relationship that is born out of fear.

It’s a fear of getting a contract cancelled, exceptions denied, or perhaps money taken away.

On the company side, there is fear.  Fear that new business flow will stop.  Fear that poor quality business will trickle into your company.  Fear that the agency will roll your entire book of business.

But as an agency, if you can get past the fear and the charades that are played between agent and rep, great things can happen.  

Games of charades?  A perfect example of this is the planning season.  The agent sits down with the company person and is asked, “How much can you commit to grow next year?”

The agent says, “Put me down for 10%”.

They both smile, a document is produced, and signatures confirm the exercise.

The company knows this won’t happen.  The agency’s retention is 80% and for the agent to grow 10%, they will have to triple new business production from last year.

The agent knows this isn’t true either, because he was in the middle of losing a producer, and the rates for this company were steadily becoming uncompetitive.

But the charade continues and on each future visit, the rep lays out production sheets and fills the staff with donuts, but nothing really gets moved forward.

This relationship wastes a lot of time on both sides, but the good news is that you can use this relationship for your agency success with a handful of changes.

  1. Don’t let them waste your time!  Be clear that you want to succeed with them but you need tangible, clear items of discussion that accomplish a stated goal no matter how small.  
  2. Ask for money.  Most companies have marketing money, even if there is no formal co-op program.  A lot of this money goes unspent because no one asks.
  3. Use them for brainstorming.  Rarely do you have the time to step back and work on your business.  You are knee-deep in the business, managing renewals, putting out fires, dealing with employees, and diffusing claims.  Use that “company” time to think through marketing ideas, staffing changes, or renewal processes.
  4. Ask for honesty.  Find out what they really think of your agency.  Ask what you do well?  Where do you struggle? What needs changing?
  5. Have them create detailed plans for you.  It is really hard to generate marketing checklists, sales processes, and best practices.  Make them do it for you.  They can be a surrogate agency manager, and you don’t have to pay them.
  6. Make them an accountability partner.  Let them know what you want to accomplish and implement in the agency.  Ask them to hold your feet to the fire on these goals.  At each visit, they can ask how you are progressing on your goals.

To get to this level of partnership takes a lot of trust and honesty with your reps, and you won’t be able to do it with everyone.  But with the ones you can, be honest and use them like you would a paid consultant.