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Winning Strategies

Does your agency have the Right Stuff?

Some tips on how to create a culture that breeds success

By Roger Sitkins

Why do most of the top agencies have great organic growth? What are they doing that enables them to lead the industry in growth?

I think it comes down to having the "Right Stuff." Much like the Mercury Seven astronauts who inspired the novel and movie of the same name, agents and agencies that have the Right Stuff are the best at what they do; they're unyielding in their ambition to succeed.

So how do you know if you have it? Look at your results! If your results are not what you want, then you don't have the Right Stuff. But even if you don't have it now, you can develop it.

Producing "Right Stuff" results

Our GrowFit™ formula can help you determine whether you have what it takes to achieve your desired results. Basically, it combines your percentage of revenue growth and your percentage of operating profit. For example, if you have 10% revenue growth and 15% operating profit, your GrowFit number is 25. That's really the minimum acceptable number according to our growth model, which calls for a GrowFit of 40 or more.

At 40, you might have 20% revenue growth and 20% profit, or 30% revenue growth and 10% profit. Either way, that's a really good GrowFit to strive for.

What Right Stuff results lead to a GrowFit of 40+? Our Vertical Growth Experience ® model identifies the following Key Performance Indicators (KPIs):

• An operating profit of at least 25%;

• Revenue per employee of $175,000+;

• Revenue per validated producer of $750,000+;

• A closing ratio of 75%;

• More than 75% of your clients are full-time clients (i.e., you write all of their coverages).

Other indications that you are doing the Right Stuff include:

• Overflowing prospect pipelines and more opportunities than time;

• A unique and branded selling process that totally differentiates your agency from all of the traditional agencies in your marketplace; and

• A productive and highly efficient support staff.

By productive, I mean that your personal lines account managers (or CSRs) handle more than 1,000 clients each and your commercial lines select account managers (or CSRs) handle more than 500 clients each.

You'd think that with today's advanced automation and technology, productivity wouldn't be a problem. But when I look at the number of accounts handled by the personal lines and commercial lines reps, it's much lower compared to the old "manual" days, before the proliferation of computers and sophisticated software programs.

In their defense, agencies these days are required to do a lot of input work via software systems the insurance companies used to do (underwriting, questionnaires, etc.). The problem is, it's almost impossible for agencies to stay current on the various software systems, programs and processes that differ from one company to another.

One of our members recently told me he estimates that between his agency's management system, e-mail program, interactive rating, underwriting and claims systems with carriers, his agency utilizes more than 50 different software programs! This is a major detriment to productivity. Nonetheless, it's a problem that agencies must address in order to achieve an acceptable GrowFit.

The Right Culture

We define culture as "the language and behaviors that are normal in an organization." And in our industry, agencies with the Right Stuff have the Right Culture. Therefore, if you want to find out whether your agency culture is correct, take a look at what the employees are saying and doing.

Language. What gets talked about in your agency? Do you have a clear and compelling vision that is always talked about? Do you talk about the strategies that help eliminate competition? Do you talk about the great results you're getting? Do you talk about your overflowing pipelines? If so, it's likely you have the Right Culture for growth.

Agencies that lack the Right Culture tend to talk about things that are problematic or unimportant. For example, do you talk about how busy everyone is? How bad the insurance carrier service has become? How backed up your renewals are? If that's what you talk about, you need to change the conversation!

Behaviors. Do you do the following without fail?

• Ask for referrals and introductions.

• Round out every sale.

• Have annual servicing calendars for each and every A and B account.

• Maximize your automation systems.

• Proactively manage your social media marketing.

• Hone your selling skills and polish your presentations through low-risk practice and rehearsals.

• Complete annual risk surveys and assessments on your clients.

• Provide stewardship reports to all A and B clients.

These are just some of the Right Stuff behaviors that we should all be doing all the time, not sporadically.

More of the Right Stuff

Let's look at some other "stuff" that the best agencies have in place.

The right people. As part of your agency's annual planning process, it's critical to match revenue projections with the people you have on your staff. Specifically, what will your revenue look like over the next five years? During that time, where do you see each of your producers? What about your internal staff? Which ones do you need to "retire, replace or repair" to meet your revenue goals?

For example, if a producer has plateaued, it's typically because they've either "retired in place" or need additional training in order to improve. Other producers may be planning to retire sooner rather than later. What plans have you made to meet your revenue goals when they do? When will you start hiring additional producers to replace them?

The same holds true for internal staff members. This includes those who are likely to retire in the next five years and those who will never meet your requirements and need to go. Now's the time to decide who will replace them and start recruiting for those positions.

Finally, there are others who underperform because they haven't been adequately trained. How much are you spending on that? It's very likely you'll need to devote additional time and resources towards their development and improvement. What's your plan?

After carefully evaluating each employee, it should be obvious which ones you should retire, replace or repair. To me, that alone will tell you a heck of a lot about whether or not you have the Right Stuff!

Besides having the right producers, internal staff and training programs, you should also have:

• The right carriers;

• The right sales approach;

• The right automation system; and

• The right outside advisers. (I know of at least one I can highly recommend.)

As you gear up for a great 2014, do you have the Right Stuff that will get you the Right Results? If not, are you willing to do what it takes to obtain it? As always, it's your choice.

The author

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 around innovation, sales, growth, profitability and value. Sitkins International is inventing the future of the independent insurance system by providing intellectual property that empowers agents and brokers to become the innovators.

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