Many of our readers are aware that we have built several systems to convert agencies from price-driven to relationship-driven with Producer programs and Incentive Compensation Programs in support of the conversion that incent (or replace) non-performing sales and service staff.
We freely distribute the Overviews of each of the programs (Producer Compensation and Validation Program, Incentive Compensation Program and, of course, the APM (Asset Protection Model) of Relationship Selling.
Then the calls and emails start flowing.
“Al, I like the cross-selling feature of the APM. How can I install that in my agency?”
“Dear A C G; we want to install a referral generation program in our agency. Can we use that part of the APM program on its own?”
“Dear Al, I have a producer that I need to motivate or replace. Can I use this program to do so?”
Dozens more calls and communications arrive from agents who seek to improve their organizations by using pieces of a really comprehensive program without adopting the program, itself.
A pig and a chicken are walking down the street early one morning and pass a restaurant window with a special “Ham and Eggs – One Dollar”. The chicken says to the pig, “Let’s go have some breakfast!”. The pig responds, “No Way! For you it’s a contribution – for me it’s a total commitment!”
Whether your agency is floundering and you have no idea how you’re going to re-stabilize and grow – or your agency is doing fine but you need to boost its top line or bottom line to gain value for your asset, you must be prepared to COMMIT to altering the things that haven’t worked as well as you wish in order to gain traction and to CHANGE the results.
The ICP (Incentive Compensation Program) the Producer Compensation and Validation Program and the APM (Asset Protection Model) are related products and systems that are integrated with each other to maximize an agency’s results but can stand on their own only under very specific circumstances:
The ICP can stand on its own if you are growing your agency nicely but can’t manage your staff to higher productivity. If you are being pressured to hire additional people when you know that the existing staff should be able to handle more clients in a more efficient manner, this program can incent them to increase direct customer productivity (handle more clients) by appealing to their pocketbooks and relating productivity to compensation.
The Producer Compensation and Validation Program works on its own if you have an excellent internal staff but are running short of producer talent. Agencies use this program when their existing producers become “fat and happy” and are no longer concerned with growth, satisfied to service their books of business. This program gives both upside potential and downside risk to motivate producers to grow the agency’s book of business annually. This program tends to get rid of ‘dead wood’ and invigorate young, hungry and new producers by providing them a steady flow of prospects. We can give them all the financial motivation they need to be successful, but we can’t make them get out of bed in the morning.
The APM melds all these programs within a Relationship Building framework that worked very well until the agency system became price-driven in response to the direct writers’ marketing of price over coverage. The last 50 years should have made us realize that if we run with the bulls we’re going to step into what they leave behind. The APM teaches agents to become insurance consultants again.
The agency system has suffered an erosion of their Proposal to Sales ratio from 40-50% to the current 10-15% because, while price is critically important to both our clients and to us, if price is the only consideration, there is ALWAYS someone out there who will buy the market and undercut your price, legitimately or not. However that part of industry that is sensitive ONLY to price (until an uncovered claim occurs or they seek personal service from the “box” or the gecko) is NOT the prime prospect for the independent agent. We remain like the ‘family doctor’ trusted to take care of our clients’ most valuable assets with the assumption that we are doing it are a fair, reasonable and competitive price, as well.
The APM builds customer base the old fashioned way, by building a trust relationship between a friendly, knowledgeable insurance professional and the client base who actually seek to protect their assets.
  1. The APM finds the prospects based on the strengths of the producer, the agency and/or the carriers represented by the agency,
  2. The APM markets – frequently- to the target markets of the agency using the agency owners/producers to meet with the prospects every time a marketing segment is released in order for them to “make friends”.
  3. The APM markets using value added benefits at every visit – we prove our value before we take the prospect as a client
  4. The APM sells against price – we get that argument out of the way quickly by convincing customers that we will not write their insurance for less than they are paying now.
  5. Most of the APM results are derived through Broker of Record Letters because the prospects ASK US to write their insurance
  6. The APM results in very high closing rates because it is rigged – we disqualify and replace unqualified prospects quickly (that’s what we train the producers to do) so, of course, our results will look great!
  7. We incent the producers toward growth with Tiered Compensation and away from stagnation with downward sliding compensation if they don’t grow (always able to recover any reduction)
  8. We incent service staff toward heavy involvement in retention through the ICP, putting their raises in their hands by paying more for greater productivity.
  9. We continue the multi-step marketing program for clients through a Rotating Asset Analysis to give them the opportunity to purchase all of their insurance needs from us. This cross sells AND retains almost 100% of controllable retention.
In order for these counterpoints to become effective in your agency, you must actually CHANGE from the actions that eroded your results. So when an agency tries to ‘cherry pick’ segments of the APM they find that their results don’t match the historical successes related to relationship management. So many agents try convincing us and themselves that they are already Relationship Agencies and then go right back to price-quoting as their primary motivation.
Please call me (856-779 -2430) to discuss the APM, Producer Compensation and Incentive Compensation.   I would love to install these or other life-changing systems into agencies who would like to regain or enhance their growth, profitability and productivity. But please be aware that unless you fit a specific model, piece-meaning the features of these programs will not benefit you – IT’S A COMMITMENT TO CHANGE, NOT A CONTRIBUTION TO IT that will assure your success.