Getting off The Treadmill

The last three agencies we visited had problems so similar that we decided to see just how many agents have the same experience – and the same problems.

The key issue for each agency owner was EXTREME FRUSTRATION. When probed for more information and better focus on the issues, the owners in each agency echoed the same sentiments;

1) They don’t know how to get new customers without seeming to degrade themselves to their existing customers and without selling price.

2) They don’t know how to deal with customers who only seem to care about the final cost of insurance.

3) Their producers are not motivated and they don’t know how to instill that motivation to sell insurance.

4) Their CSRs appear to be processors more than insurance professionals.

5) Their carriers are demanding, but not cooperative. The company reps who see both sides are a) cynical, b) unrealistic in their expectations, and c) not helpful in solving agents’ problems.

The end result is the de-motivation of agency principals and the acceleration of agency mergers, acquisitions and other associations (clusters, service centers, Virtual Insurance Agencies, etc.).

None of these problems are insoluble. Agencies around the country have attacked and solved each one of the issues that troubled our clients. The problem is HOW THEY SEE THE PROBLEM!

What we have found is that, for some people, the problem causes them less pain than the solution – so they continue to complain about the problems, but they don’t take the actions necessary to solve them. No one can assist agents who are so deeply rooted in the past that they can not flex to the changing conditions in the insurance industry.

—No, carriers are no longer blindly loyal to long-term agents.

—No, your producers with existing books of business may not be as motivated as you were when you had to scurry and sell policies to feed your family.

—No, prospects and clients no longer look to you for insurance advice with as much trust as they look to their physicians for health advice.

But each issue above can and have been addressed – if you have the intestinal fortitude to change your agency to meet the needs of the insurance buying public. Here is how some agents have resolved these issues:

1. I know I can help the prospects we can reach, but they don’t understand that. They think that I’m just another insurance salesperson. It actually feels degrading trying to “sell” them on using me as their agent.

ANSWER: The prospect or customer probably isn’t trying to degrade you. YOU feel degraded. That means that your problem is your own perception of your actions. The answer is to act as you would feel best in the role of an insurance professional. Your sales job is to get the customer to view you the same way that you view yourself. It is always easier to change someone’s mind if you already have that winner’s image firmly developed in your mind. Imagine being in a baseball game and facing a pitcher that you know is better than you — knowing that you will probably strike out. What are your chances of being a successful batter in that situation? On the other hand, imagine KNOWING that you “own” this pitcher and that you have hit safely nine out of your last ten outings against him. Do you think that your chances of hitting safely has risen? What has changed between these scenarios, the pitcher (the prospect or customer) or YOU?

All those hokey “Positive Thinking” and “Visualization” exercises actually work – as long as you have the knowledge, experience and expertise to be as confident as you act.

2. My producers and I keep falling back into the habit of selling price. It seems to be the only way to get through to prospects and, yes, even clients, who seem to only acknowledge price as a buying consideration. What can we do to change that?

ANSWER: Those who sell price fall into one of two categories: a) They don’t know enough about their and their competitors’ products to properly differentiate them by selling benefits and differences, and b) they don’t know the professional sales skills that differentiate salespeople from order takers with nice personalities.

If ignorance (or laziness) is the problem, you must drill yourself and your producers with product benefits and differences between your products and those of your competitors. Your carriers can help you to some degree. You can also gather intelligence by reviewing other’s policies and compare them against your own products.

If you realize that you and your producers, while expert in insurance coverage, have never been trained as professional salespeople, GO GET THE TRAINING. Knowing insurance products is a far cry from selling them. A professional salesperson may not know as much as you but will establish relationships and trust between themselves and the clients and will close more sales than the technical expert who relies on the facts to sell the product. Your only saving grace is that most insurance salespeople are as ill-prepared to sell as are your producers. The successful agencies in the U.S. have learned this bitter lesson and have spent time and money in continuous improvement training of salespeople. Some have also hired experienced salespeople and trained them into insurance, feeling that the people skills of sales were harder to develop than the fact-oriented technical skills of insurance.

3. My producers only sell enough to keep them at the compensation level that meets their needs. They complain that they are not making more money, but they’re not doing anything to improve their earnings capability. It’s driving me crazy because, not only do I have to hear their financial complaints, but the agency is not making any more money either. What can I do?

ANSWER: Money appears to be a motivator, but, for most producers, it is not. It is only a measurement device once you have enough to support your normal lifestyle. There are the occasional salesperson whose need for material possessions and for the security of a strong financial base makes the acquisition of more income a driving force. These producers just need prospects – the money is a motivator to them.

The problem is the rest of the producers who reach a position of comfort and then “tread water”. The best agency response that we have seen includes annual objectives with both rewards (financial, stock ownership, titles, perqs) for achievement and penalties for shortfalls. The rewards always far surpass the penalties, but those penalties are not meager. An example of a penalty that works if implemented even-handedly is a modest reduction in renewal commission. The producer participates in the creation of his/her objectives and faces the potential of loss of income unless (s)he achieves them.

4. My CSRs have turned into drones. They were motivated when they were hired, but now every problem becomes a crisis that I must solve. I don’t have time to do their jobs and mine. What can I do?

ANSWER: It’s always easier to let someone else do your job than to do it yourself – especially when the boss is always second guessing you anyway. That’s how you appear to many of your employees. Unless they respond to a problem exactly as you would, they feel that they are subject to your criticism. So, the easiest decision is none at all. They come to you with the problem knowing that if you respond, they are not subject to your criticism over their decision. If you want to reverse this trend, here’s how:

Every time someone brings you a problem, ask them how they would attack it – then agree with their solution and tell them that they didn’t need your input after all. It won’t take long before they realize that you’re not going to accept “the monkey” being transferred from them to you. This only works if your employees are knowledgeable and can make good common-sense decisions. If not, retrain or replace them. The other prerequisite for the effectiveness of this response is if you are not a dictator whose only acceptable decision is one that you made personally. You may not consider yourself as a “control freak”, but many agents can not accept an answer that is different than theirs, even if both would work well.

5. My carriers DRIVE ME CRAZY!!! They are unrealistic in their expectations and are not helpful to me. They practice asking for business, then refusing my submissions. But I can’t live without them. What shall I do?

ANSWER: First, understand that many of the carrier edicts you get from your field staff come from their home office and do not consider their input at all. They must bring you the company line, whether or not they agree. This results in some cases have been cynical field representatives and underwriters who do as they are told. There is little you can do to resolve their issues. However, there is a relationship building exercise that usually results in much better interactions with the carriers at the field office level.

When you create and implement your Strategic Plan (if you don’t do so yet – begin), include the carriers who you want to be your business partners. By including the underwriters, marketers or field officers in your Plans and in their implementation, you create a synergy that merges your goals with those of your favored companies. Then the proof is in the implementation – for both you and for the companies. If you “walk the talk” and your results meet your (and your companies’) expectations you will find the next year much easier and more cooperative than the prior year. The risk is in you planning to do much with little results. Relationships with carriers can deteriorate when commitments are made and not implemented. Similarly, your challenge to the carriers is to participate with you in your mutual success. If you do what you say you will do, but they don’t perform accordingly, you will know that your relationship issues are theirs, not yours and you should “go shopping” for companies who can meet your agency’s needs.

It is your decision whether to stay on that comfortable, but boring treadmill. After all, you are making a living and, regardless of your frustrations, being an agency owner is not the worst profession on earth. When the frustrations get big enough, agency owners are comparing CHANGE to RETIREMENT. If the pain of change is more ominous than the pain of retirement (or merging out of existence), then the decision is obvious. However, agency owners must be aware that their contemporaries have met each challenge that they have experienced and have broken through to profit, growth and professionalism. There is plenty of help available to attack the frustrations and problems of running an agency if they are up to the challenge and would like to see their agencies continue and perpetuate themselves internally.