Gaining the competitive advantage
Do you have what it takes to "bring home the gold"?
By Roger Sitkins
As I write this, the 2012 Summer Olympic Games are poised to begin in London. I've always loved the Olympics because it's so intensively competitive. There's something thrilling about watching athletes who are willing to work so hard and sacrifice so much to reach the top of their game. Although I enjoy watching some sports more than others, I always marvel at what it takes to "bring home the gold."
At the same time, I often wonder what makes the difference between placing first, second or third when all of the athletes appear to be equally talented and skilled. In some sports, like swimming and track, a mere thousandth of a second distinguishes the thrill of victory from the agony of defeat. So what competitive advantage did that gold medal winner have over the silver and bronze winners? On such a level playing field, what enables some Olympians to go farther than their competitors?
The same question applies to independent insurance agencies and their producers. As you know, the field is both full of talent and extremely competitive; therefore, not everyone wins. So what advantage do you have over your competition? Perhaps the best way to answer that is to look first at what won't give you the competitive advantage.
I've compiled a short list of things that many agencies believe will distinguish them from the competition. The reality is, these are the very things that work against agents by making them look and sound just like everyone else!
The Competitive Advantage is NOT any of the following:
• It's Not the Great Service You Provide. Guess what? Everyone else believes they provide great service, too! That's why saying as much gives you no competitive edge.
• It's Not Having the Best People. Everyone says that too, which makes the assertion totally meaningless. Do you really believe that all the best people in the entire world work for one particular independent agency? I guarantee you that someone else's best people can outperform some of your best people.
• It's Not the Insurance Carriers You Represent. You're not the only one who boasts about the huge number of top carriers you work with—so does everyone else. How many times have you thought you had all the markets cornered and had the best, most competitive carriers—only to have a competitor beat you by $20,000 on a $50,000 account?
• It's Not How Long You've Been in Business. While it's a plus to have business longevity on your side, it goes only so far. In fact, age helps only when you're competing against a brand-new or recently established agency. In that case, being in business for 60 years vs. six months is an advantage. Otherwise, people generally don't care if you've been in business for 100 years or even 20 years. They just want to know that you're competent and established in the market.
• It's Not Access to Your Web Site. Clients are accustomed to going online to find what they need, whether it involves filing a claim, downloading a form or asking questions. So to most clients, access to a business's Web site is an expectation—not an advantage. If you're not providing that access by now, you're not in the game anyway.
• It's Not Offering 24/7 Claims Service. Again, that's an expectation. Everyone expects 24-hour service, every day without interruption. Continuous service is no longer a perk. It's a necessity.
The Competitive Advantage
Agencies and producers that truly have the Competitive Advantage, and "take home the gold" at least 80% of the time, possess a number of common traits. Here are some of the key characteristics they share.
A Unique and Branded Selling Process. These are not the Look, Copy, Quote and Pray type of sellers. These producers have a specific process they take their prospect through and explain clearly as they do so. The process is focused on helping clients control their total cost of risk.
Studies continue to show that people who are buying professional services prefer to work with those who have a specific sales process. That's because prospects like to understand what's going on while it's going on. Accordingly, those who have a process that they can communicate have an almost unfair competitive advantage!
Still, all too often a producer walks in with a yellow legal pad, takes copious notes during the meeting with the prospect, and then leaves. The prospect is kept in the dark until the producer comes back with a quote. I equate this to a doctor/patient relationship. How would you feel if your doctor quietly took copious notes while you described a physical problem and then simply handed you a prescription without further questions, comments, discussion or testing? You probably wouldn't have much confidence in the doctor's judgment because you weren't part of the process. Similarly, a producer needs more than a yellow legal pad and a copier in order to propose the appropriate coverages or program.
• Risk Solutions. Beyond the actual insurance transaction and transfer of risk, gold-medal producers provide risk solutions. Although insurance is one of the solutions they offer, it's not the only one. In addition to policies and pricing, these winning producers provide each client a customized plan of risk reduction.
• Relentless Preparation. Top competitors believe that every race, match or meet—or in our business, every event, presentation and encounter—deserves their very best. Gold-medal producers are relentlessly prepared. Besides honing their selling skills through weekly low-risk practice sessions in the office, they rehearse every presentation before the event, not afterwards in the car as they dream of "next time." They also debrief after every event in order to understand why they lost or how they can replicate their success (five times).
• Internal Accountability. The winner's culture (which we define as the language and behaviors that are identified as normal in an agency) is one of accountability. It starts with a discussion of what you are going to do and concludes with someone holding you accountable for it. Basically, this means answering the question: "Did you do what you said you were going to do?"
• Continual Improvement. A gold-medal agency is a learning organization. At all appropriate levels, employees are involved in continuing their education, often by pursuing advanced degrees, designations and certifications. Gold medalists don't view this as a mandatory chore, but as a way to improve and excel.
According to Tom Peters, "If you're not getting better faster than your best competitor is getting better, you're getting worse quicker." It happens all the time in sports where an athlete makes it to the top one year and then has a terrible year the next. Usually it's because he or she quit trying so hard (or at all). The best never succumb to the hubris of success.
• A Vibrant Vision. There's a passage in the Bible that says: "Without a vision, the people will perish." The same applies to today's independent insurance agency. The most competitive and successful agencies have a vision (or mission) that is known, embraced and lived by all. Further, it is stated clearly and concisely enough to be memorable.
Implementing a vision to live by hinges on the leadership of the agency owners and senior managers. For example, if one part of the vision calls for working by referrals only but the senior leadership rarely asks for referrals, the vision is not lived. "Do as I say, not as I do" might work for the parents of toddlers, but it's not likely to work for agency leaders.
The Bottom Line
What medal will your agency win: gold, silver, bronze (or lead)? Are you tired of finishing second when you're a thousandth of a second from first place? While there's no shame in second place, there's also no financial reward for producers whose prospects tell them, "You were really close!" or "We almost went with you," and so on. Ouch!
In the insurance arena, there's only first place. After that, the second-place finisher is merely the first loser. Do you have what it takes to bring home the gold?
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 top independent insurance agencies and brokerages in the United States, Canada, and Latin America. Members participate in training, advising and networking opportunities focused on innovation, sales, growth, profitability and value. Sitkins International is inventing the future of the independent agency system by providing intellectual property that empowers agents and brokers to become the innovators.