Changing Agency Mindsets

What do you do AFTER?

AFTER you have automated to increase efficiency-

AFTER you have eliminated functions and personnel-

AFTER you have cut your expenses to the bone-

And you are still losing ground or earning less money yourself to keep the business afloat?

In order to survive, AFTER you have controlled costs and learned how to operate as a “lean” business, you must INCREASE SALES. In order to increase sales, most insurance agents have to retrain themselves to move from a primarily service mind-set to a sales mind-set.

Insurance agencies have lived with a service mind-set for many generations. The industry is changing forever and we’re in the middle of that change. As with all other industry changes, the participants never see the change as clearly as their successors. Those living through the change simply feel uncomfortable, insecure and frightened over things happening to their businesses that seem to be out of their control.

Within a few decades books will be written describing the 1980’s and 1990’s as the transitional period of the insurance agency industry from the small, entrepeneural local brokerages that have existed for two hundred years to — Who Knows?

But is the future completely unknown? Can insurance agents do nothing? Must they simply watch their businesses slip away?

The answer lies in the fact that the insurance business does not exist in a vacuum. We are not the first, nor are we the last of the entrepeneural industries to face similar challenges. The medical profession has been going through a similar transition and I predict that lawyers and accountants will face similar challenges shortly.

But if we stop looking behind us at the way things used to be and begin looking ahead of us, many agents will be able to survive and thrive. The business will be different in the future — that’s a certainty. The difference will be that surviving agencies will replace their service mind-sets with sales mind-sets.

No, I didn’t propose that we stop providing high service levels to our customers. I do suggest that the primary responsibility of insurance agents in the future will be in the sales arena. Regardless of who, how, when and where the customers are serviced, if insurance agencies are no longer paid to provide similar services as in the past, they must change –or close. I know it sounds ludicrous to successful businesses, but over the past ten years we have seen many agents simply “fold their cards”, preferring to retire than to change their methods of operation. Not all of these agents were poor business people and many were operating profitable businesses. Their common problem was that they enjoyed the way insurance agencies have operated in the past and they were not willing to change to meet the needs of the future.

Fulfilling customers needs from a sales standpoint still requires agents to be technically qualified. The more you know about the products that you sell, the better. However, we must now hone our skills as salespeople, as well.

The best salespeople in the world do not coerce, intimidate, or trick customers into buying from them. And they do not concentrate on price as the primary benefit of their products. The best salespeople in the world are trained to ask the right questions, listen to the customer’s priorities and objectives and fulfill them.

The skills that must be developed for both new and experienced agents are the sales related skills that have been overlooked in our formal integration of producers in the agency industry. Yes, we still need CIC and CPCU designations and on-going technical training in insurance products. But unless we build a cadre of producers skilled in sales techniques as well, the direct writers advances will accelerate and cause the demise of the Independent Agent. The stock companies and mutuals are watching the progress of the direct writers. Most would like to continue to use the skills and talents of independent insurance agents but are not as tied to the concept if it no longer works.

How do we develop those skills? There are three key methods:

1. The Agents Associations must provide sales training to its members. Those associations have a vested interest in the perpetuation of agencies and the creation of new agencies.

2. Stock and Mutual Carriers should offer and sponsor professional sales training to their agents. The better trained the sales force, the more effectively they will sell your products.

3. Agents, themselves, must pursue a training initiative. This training in sales methods and techniques must start with the owners and senior members of the agencies because an owner can not support and manage salespeoples’ activities unless he/she is trained similarly.

We urge you to budget money for basic sales training in your agency. The owners and managers need to know how to sell, but so do the producers and service staff. One of your first lessons will be that everyone in your agency who speaks to a prospect or client is involved in the sales process. Their attitudes and responses could either make the customer want to do business with you or want to find reasons to go elsewhere.

Change the mind-set of your agency to a sales mind-set. The result will be higher morale, growth instead of stagnation and a bright, rather than bleak, future.