To innovate or stagnate? That is the question
Can you do what it takes to sell more, earn more, and be worth more?
By Roger Sitkins
For the 32 years that I've been consulting with independent insurance agencies, producers and carriers, my mission has been to transform the industry, one agency at a time.
At Sitkins International, all of the programs and services our members receive are based on a foundation of intellectual capital. We consider intellectual capital to be the knowledge, wisdom, strategies, behaviors and tools needed to transform a stagnant agency into an innovative agency. We bring this intellectual capital to our membership via a model of training, coaching and networking. The results are increased top-line revenue, operating profit and agency value.
It sounds pretty straightforward to me. I mean, what agency owner wouldn't want to sell more, make more and become worth more? Unfortunately, too many agencies are not willing to innovate and do things differently. So they stagnate.
If you really want to win the battle of selling more, earning more and being worth more, what must you do differently?
Leadership Mindset. The number-one change most agencies should make is how the leadership team thinks—big or small? Over the years, I've noticed that small agencies are small for a specific reason: They think small. Long ago, someone told me, "The size of transactions you deal with and the size of the things you personally get involved with will determine the overall size of your company." That's so true!
I'll never forget an agency I once worked with whose leaders seemed to agonize over every little decision they faced (also known as "analysis paralysis"). About 10 years ago, they needed to buy two new color printers. Granted, printers cost a lot more then than they do now, but even so, it wasn't that big a deal, particularly for a large agency. Nonetheless, one of the senior executives spent more than two months analyzing what kind of printer they should buy. He should have been out selling insurance—enough insurance that it wouldn't matter what the printer cost!
We always say that a producer's book of business is directly tied to his or her average account size. Similarly, an agency's growth potential correlates with its principals' ability to handle large, complex issues. They shouldn't be fretting over office equipment and supplies. They should be focused on the bigger picture.
Behaviors. We often discuss how behaviors drive results. If your current behaviors are the same ones you had five or 10 years ago, you can expect the same results. Because behaviors and habits go hand in hand, it's important to emulate the things that successful salespeople do. Are you doing a great job of going out in the community and networking? Are you in the habit of practicing to get better? Do you rehearse your presentations? Those who are relentlessly prepared will always do better, just as the agencies that cultivate and communicate the behaviors and results they want will always excel.
Sales vs. Service Mentality. You must realize that (a.) you are a sales organization that (b.) provides incredible customer service—in that order. More often than not, we see the opposite in agencies that aren't growing. They consider themselves primarily a customer service organization that occasionally makes a sale. Certainly, providing incredible customer service is part of an agency's success, but sales must always come first.
The "Agency's Way." Once and for all, the agency's way of doing business must be documented, and it must be reinforced. That means that employees must be told: "This is the way we do business here. This is the brand we're going to support, and these are the processes we're going to follow." Those who want to be part of your team and aspire to a successful, lucrative career will embrace doing business your way. If not, let them fail on someone else's payroll. Unfortunately, too many agencies make exceptions to the rules. While I believe in being flexible and fair, I've found that after you make the first exception, each subsequent exception gets easier and easier to make.
Price-Driven Sales. You can no longer be just the broker of a price-driven commodity known as insurance. And really, that's what most agents do—they sell commodities based on price. What they must do is bring value well beyond the mere risk transfer mechanism known as insurance. They must bring their clients plans for controlling the total cost of risk.
Business Acumen. Producers who have business acumen possess the knowledge to talk to clients about business strategies—not just the cost of insurance—and that brings value to their clients. As an example, years ago we had a young producer who started as a CSR and then went into sales. She was a single mom determined to make a better life for herself and worked harder to achieve success than just about anyone I've ever seen. Eventually, she had a book of business with about $700,000 in annual commission income; her personal take was approximately $300,000 per year. How did she do it? She created more value for her clients through her business acumen.
In one case, she took the concept of 80/20 (a rule we often discuss) and applied it to one of her clients, a trucking company. By segregating the company's shipping customers from largest to smallest, she discovered that, sure enough, the top 20% brought the company 80% of its revenue. More important, she found that the bottom 80% were actually costing the company a significant sum of money! Later, when a competitor presented a quote for $30,000 less on the account, the owner stayed with our higher-priced producer because she had shown them how to save $40,000 a year by eliminating their small shippers.
People Development Skills. You must have annual plans for each and every employee outlining exactly what that employee needs to do to improve and advance. After all, if your employees want to earn more, they need to be worth more. And the way they become worth more is by developing skills to enhance their productivity. What are you doing to develop your employees? Are you a learning organization?
Brand Management. If you're not managing your agency brand and the brand of your employees, you need to start. First of all, your brand is the clear, powerful thoughts you want people to have about you. Basically, it's your reputation. Regrettably, few people manage their brand, and even fewer agencies have a policy regarding it.
More often than not, agencies have no idea what their employees are posting on social media sites such as Facebook and LinkedIn. Although the two outlets originally had very distinct applications and audiences, the line between personal and professional has become blurred. That's why employees should be careful about what they post online and why agencies should establish policies that spell out what sort of information is and isn't acceptable for employees to share in a public forum.
The bottom line
You're on the way to where you're going—what will you become? You can either innovate and win the battle, or stagnate and watch others succeed. Innovation is about constantly improving and being seen as a professional brand that brings value to clients. A stagnant agency will do what it's always done. It won't change, and therefore it can't improve. Will you innovate or stagnate?
As always, it's your choice.
Roger Sitkins is founder and chairman of Sitkins International, a private client group and membership program for some of the leading independent insurance agencies and brokerages in the United States, Canada, and Latin America. Members participate in training, advising and networking opportunities focused around innovation, sales, growth, profitability and value. Sitkins International provides intellectual property that empowers agents and brokers to become innovators.