agency sales audit, The

Rough Notes, Dec 2000 by Sitkins, Roger

Rate your agency on its service capabilities, then determine what changes need to be made to provide outstanding customer service to your clients

Independent insurance agencies should view themselves as proactive sales and marketing organizations that provide legendary customer service. Unfortunately, what I see more often than not are service organizations that do some selling.

In this column, I am going to help you become your own consultant through the completion of The Agency Sales Audit'.

In each of the following headings, I am going to provide you an overview of a specific sales-related issue. You will be asked to rate your agency in each of the areas on a scale of one to 10 (10 being the best, five being average).

1. Producers' availability for sales-related activities-- The internal structure and functions of your agency should be organized around the concept of a strong division of sales vs. service activities. The producers must be freed from all day-to-day service issues on the vast majority of their accounts. They have the freedom to invest 80% of their time in their four key money-making activities (sales, proactive renewals, client relationship management and prospecting).

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2. Ninety percent plus of new business from referrals-- Your agency should become a ROPE agency (Referral Only Production Explosion). All new business should come as a direct referral from the proactive generation of referrals. These referrals come from either your current "A" (top 5% of clients) or "B" (middle 15%) clients. Or, they come from your TAN (Trusted Advisor Network). These are the other trusted advisors in your marketing area that consistently send you referrals.

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3. Formal sales process-Your agency has a formal sales process in commercial lines. This process should consist of four steps: a) referral generation and follow-up, b) diagnostic appointment (off-season super qualifying appointment), c) ProView appointment (professional review and risk survey), and d) presentation of solutions and best options (solutions to the mutually agreed upon problems).

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4. Formal proactive renewal process-You don't renew accounts; you continue relationships! This process allows you to make the renewal a non-event. You aren't working diligently to simply renew an account. You are focused on providing your clients with value-added services aimed at meeting and exceeding their service expectations. At policy delivery, you ask your clients the renewal guarantee question: "What has to happen over the next 12 months for you to guarantee that we'll continue our relationship again next year?" You then send the client a thank you letter that includes a listing of the renewal rules of the game.

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5. Relationship management-The agency has formal relationship management programs in place for the four relationship types: a) clients, b) prospects, c) insurance companies, and d) team members. The "A" and "B" clients are visited on a regular basis. The top 20 prospects are identified and are part of your MVP Program (Mail Visit Phone). Your most important insurance company relationships are assigned through a "buddy system." Your employees (team members) are all part of a specific high performance team.

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6. Management of critical indicators-Although you really can't manage numbers (the only things you can really manage are the behaviors that create the numbers), you do need a profound understanding of certain issues. I call these your critical indicators. From a sales perspective, the critical indicators to be measured are: a) closing ratio (defined as the number of decisions received on proposals compared to new relationships opened), b) revenue per relationship (gross commission income divided by the number of clients), c) producers' books of business (gross commissions on "producer-- generated accounts" divided by the number of producers). It is interesting to view this on an owner vs. non-owner book of business. And d) production per year (gross commission income on a producer's book of business divided by the number of years he/she has been selling to create the book).

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7. Exit barrier strategies-One of the absolute keys to agency and producer profitability is your retention rate. Agencies and producers must do everything possible to force a very high retention rate. One of the main things to accomplish is the creation of and actual installation of exit barriers. These are the strategies that make it difficult for a client to leave your agency. Two of the most important exit barriers are rounding out the account and the formal client relationship management programs.

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8. Walk Away Power (WAP)-This means being in a position where your prospect pipelines are overflowing with Targeted Referred Leads (TRLs) and Trusted Advisor Referrals (TARs). By being in this situation, your closing ratio increases dramatically. Why? Because you work on only the very best opportunities!