ARE YOUR TOP-LINE REVENUE GROWTH SYSTEMS IN PLACE?

Rough Notes, Feb 2007 by Sitkins, Roger

Growth doesn't happen by accident

In order to have acceptable top-line revenue growth-the kind that leads to dramatic increases in your bottom line and agency value-you must have certain systems in place.

Selling system

If you've ever read my articles before, this will sound familiar: You must have a formal selling system that totally differentiates you in the marketplace. One way to do this is to get away from the old system of selling (Look, Copy, Quote and Pray) and also get away from selling based on product and price. That's what the average agencies focus on.

What's worse, average agents tend to give apples-to-apples quotes. That's fine, as long as they understand that there are 56 varieties of apples! You're shortchanging your future client and yourself if you're still giving apples-to-apples quotes.

For one thing, these types of quotes tend to be based on old insurance policies that haven't been updated in years. Further, there probably hasn't been an annual risk survey done on the account, making it impossible to determine what's needed now. Therefore, you're really just opening yourself up for an errors and omissions claim when you accept another agency's risk management plan as the correct plan. The bottom line: When you give apples-to-apples quotes, you're setting yourself up to inherit a bushel of problems-and for a lower price, no doubt.

If you're selling like everyone else is, you've got tons of competition, because everyone has the same message and it's all about saving money. What I'm saying is that you've got to play the game where no one else is playing. Areas where most agencies don't play the game very well are the value-added services and risk reduction plans.

If you want top-line growth, it's imperative that you have an offense (i.e., selling system) that works; a central branded theme. Our theme, for instance, is The Risk Reduction Approach(TM). This trademarked system of selling insurance operates strictly on referrals, preventing SAD (Smiling and Dialing) marketing. Do you have a selling system in place that not only earns but also generates referrals and introductions?

Service system

If you believe, as we do, that it's all about acquiring and retaining clients, then you'd better have a true service system in place. We're not just talking about your automation system, but your internal processes, procedures and beliefs that support the goal of retaining ideal clients. This goes hand in hand with eliminating all caustic relationships (you know, the ones that make you wish you had caller LD. on your office phone lines).

As we've discussed before, your general operating theory should be 80-0-0. This means you've got a strong Service Hand-Off in place, which frees up producers to invest 80% of their time in their four key money-making activities. That won't happen without a great service system in place.

Your system must also guarantee Zero Backlog. The goal is to have 24-hour turnaround. Even if that's not attainable, it should be your goal. Many agencies simply throw more people at the problem, which really doesn't help. What does work is having systems and procedures that are properly used, including a workload accountability process that indicates the degree of backlog on a week-toweek basis. I'll bet that 90% of the insurance professionals reading this column have no idea whether they even have a backlog. The problem is, if you don't measure backlog, you could have an employee who's in trouble or, conversely, an underused employee.

The final component of an 80-0-0 operating system is to have Zero Accounts Receivable over 30 days. The key is to have systems and procedures to ensure that your agency never pays an insurance company a single dollar that hasn't been collected from the insured account ahead of time. I'm amazed at the number of times I've seen agents who will write off huge sums that they've never collected.

Promise keepers. When producers are selling based on valueadded services, they make a tremendous number of promises. That's where the great account managers come in. These are the folks who work behind the scenes, often in conjunction with the agency's business development coordinator, to ensure that the producers keep their promises regarding value-added services (such as implementing a safety program, training the staff on loss control, visiting every quarter, etc.). Although promise keeping is a crucial part of the service system, few agencies have it in place. But without it, most agencies will over-promise and under-deliver.

Proactive. We don't know when a claim will occur, but we can do more pre-loss versus post-loss claims work through education. This means being very proactive when it comes to educating clients about how to avoid/eliminate losses as well as what to do in the event of a loss. After the loss, we must be exceedingly conscientious about following up with the carriers and staying informed each step of the way as the claim is being processed. The time to follow up is not when a client calls you weeks after a loss wondering why he hasn't heard from the insurance company and what's going on with his claim. If you don't have the answers, then why do clients need you at all? They don't.