Winning Strategies

It's time to kick our "buts"

Move past your “buts” and make the tough decisions that produce results

By Larry G. Linne

The pastor of my church opened my eyes to the real problem in the insurance agency world. He was addressing the reasons why some people have a poor attitude. He sent the congregation into gales of laughter when he said, “Someday I’m going to give a sermon called Everyone Has a ‘But.’”

I couldn’t wait to get started on this article. “Everyone has a ‘but’” is the world I live in.

“We need to sell more business, but…”

“We need to increase our EBITDA, but…”

“I need to make some tough decisions around here, but…”

My favorite “but” is the one I hear when we offer insights into how to sell an agency product that is much more than an insurance policy. Many times we hear the answer, “That sounds like a great idea, but it won’t work in our market.”

Yep, everyone has a “but.” Some have more than others. Too many “buts” can kill the potential of an organization.

I think it’s time to join a gym and get rid of some of our “buts.”

The following “buts” have to go!

“…but it doesn’t work in our market.”

Successful selling ultimately comes from understanding the buyer. Over the past five years, I have done extensive research on the buyers of insurance and risk management. I have looked at large markets, small markets, rural markets, the south, the north, the east, and the west. I have even discussed insurance and risk management with Canadian and Latin American business owners.

The results of my research show that none of the buyers is stupid. None lack the ability to understand sound logic. All of them are capable of understanding an argument about cost that goes beyond the price of the insurance policy.

About a year ago, a prospect called me from a mid-sized market in Florida. He told me a broker of record letter was impossible to obtain in his territory. Buyers wouldn’t give them to any agent. He said it took years to cultivate new business opportunities in his market, and a new business year of $75,000 in commission income was about as good as it gets.

Two hours after that call, a client came to my office. He told me of his incredible recent success. He said he had sold business worth $129,000 of commission income in the first six months of that year. Every deal he wrote was on a broker of record letter. He said his new model of selling was getting to the sale in one to three meetings.

Yep, you guessed it: My client was getting BOR letters that the prospective client should have been getting. I called that first guy back to try and help him out a little. I asked him if he had lost any business recently. He informed me that he had lost “a few” accounts to other agents on broker of record letters.

I asked him about his earlier statement about clients in his territory never giving broker of record letters. He said, “I’ve lost a few on BOR, but I can’t get one.” Hello?

These two producers live 17 miles from each other in the same city. The successful salesperson must be calling on all the smart buyers. How lucky!

The prospect decided not to listen to my advice. He said, “What you’re teaching might work in other markets, but it just won’t work here.”

Buyers in all markets are willing to do something different than the traditional insurance purchase if a good enough argument and product are offered.

“…but our clients care only about price.”

In 21 years of sales, sales manage­ment, and business leadership, I have never heard a salesperson who lost a deal say, “The reason I lost the deal is that I was unable to sell the value of doing business with our firm.” I have certainly never heard a salesperson say, “We didn’t get the deal because I was terrible.” The most common reasons salespeople give for a lost sale are price, relationship, or the client has a claim and doesn’t want to change agencies right now.

Let’s test this theory. Is every item you have purchased this week been for the lowest price you could possibly pay? Probably not. Is the insurance price the only cost a business has in risk and benefits management? Nope. Do you stay with business relationships no matter what? Most likely not. Made any changes recently to stay in business?

CEOs, you are being lied to! Price and relationship are the decision factors only when the salesperson does not effectively communicate the value of what your company can do. My experience has shown me that many insurance producers are so weak at communicating value that it becomes as easy as shooting ducks in a barrel (not that I’ve ever done that) to outsell them.

But (that word again), if you only talk about the insurance companies’ products and your “service,” you’d better have a great price or an incredible relationship. That will be your only hope.

The price of insurance is important. But the cost of preventing and mitigat­ing loss, improving productivity, dealing with compliance issues, training, and so on (this list would fill my allowed word count if I kept going) is much higher than the insurance premium. If your producers don’t understand and sell to these issues, you’d better have all the markets. You’ll need them in order to find the lowest price.

“…but I don’t have time to…”

CEOs don’t have time to lead. Producers don’t have time to sell. The only time managers have to manage is when the employees have gone home.

It’s time to make a fundamental shift in business tactics. We need to focus on results. “We don’t have time” is not an acceptable statement when you’re trying to survive. You don’t have any choice but to make the time. If you do it right, you don’t have to work more hours to get it done. We need to work smarter and be more purposeful about our efforts.

It is my observation that we have trained ourselves to be busy and to get involved in everything except what brings results. It’s time to become results-focused.

The most basic time management programs teach the principle of giving the highest priority to results-focused activities. Most people do the easy things first and the hard things later. Hard things tend to pay better. Right now might be a good time to do the hard but high-paying items first.

One more thing: What is the state of your health? Your health is at the core of your discipline, energy, attention, attitude, and focus. Improving your health will help you boost your stamina, confidence, and productivity.

Working harder may be required, but working smarter and being health­ier will reduce or eliminate this “but,” and maybe the other butt as well.

“…but we can’t invest in hiring new producers.”

Do you ever want to sell your business? I hope you didn’t have to think about that answer. Yes, of course you will eventually sell.

Let’s think about it from the buyer’s perspective.

You have an opportunity to buy an agency. You find that it hasn’t grown in the last few years. You find that other agencies have grown. Will you pay the same amount for the no-growth agency as others are paying for agencies that are growing? Growth is the best way to fund a purchase. It doesn’t matter if you are perpetuating internally or externally; you won’t get as much for your business if you’re not growing. Simply put, a non-growing business is worth less than a growing one.

So how are you going to grow? The independent agency business model is built on and rewards growth. If you’re not growing, you need to find producers who will help you grow. If you are growing, you have to continue to grow in the future and find young people to perpetuate in that ownership.

Hiring productive and successful new producers is not optional for a growing agency. Unfortunately, our industry has done a terrible job of hiring sales talent. We have to quit hiring people who can’t sell. It kills me to hear about an agency hiring a producer who was unsuccessful somewhere else. Great salespeople sell no matter where they go or what they do. We’ve wasted way too much time hiring great account executives who don’t sell. It’s time to find some hunters who will start filling our revenue funnels.

I can see the “but” about not hiring producers being a good argument with this industry’s track record of hiring. This has to change. We have to hire to realize the dream of increasing the value of our biggest asset. We have to do a great job of hiring people who can sell.

“We need to make some tough decisions around here, but…”

Most independent agency consultants could make a living on this issue. Most business executives struggle making tough decisions. They leave poor performers in jobs too long. They don’t pull the trigger on critical investment opportunities. They avoid client conflict issues. They won’t adjust compensation models to fit the market and the profit requirements of the business, and the list goes on. I guess these business leaders think the problems will just go away, or maybe a better solution will come along “someday.”

It is rare that we see anyone benefit from delaying tough decisions. You probably already know what tough decisions need to be made, and you know what you must do. Waiting another day will probably cost you more and make the consequences more difficult to overcome.

Do you have decisions that need to be made about personnel, clients, compensation, investments, cash flow, company relationships, or expenses? Remember that “no decision” is a decision. On most decisions, you already know the answer but are avoiding the conflict or the possible consequences.

It’s time to act. What if you followed through on some tough decisions this week? What if you moved this week on the top three things that have to be done for future success in your business? How would that turn out financially? What would be the return on the investment of your time?

Most of the “buts” identified in this article can be eliminated if we handle the tough decisions that need to be made.

Are you the leader who will kick the “buts” in your organization? No more excuses. No more rationalization of poor results or ineffective people. It’s time to get your organization healthy.

Everyone does have a “but.” Is your organization ready to kick some “buts” and produce results?