We have told agents who considers changing their agencies from the price/quote model of selling their products to relationship selling that this is a Two-Edged Sword. The long term returns are wonderful. Up to 75% conversion rates and retention rates of clients hover around the 95% range, BUT Relationship Selling is truly a “Get Rich Slow” process, not a ‘silver bullet’ to immediate riches.

When many agents hear this, they tend to withdraw, giving Relationship Selling great ‘lip service’, but trying to bastardize it to gain the immediate response of price quoting while building a strong relationship with the prospect. IT DOESN’T WORK, but every agent thinks it might. I’m sure that very few people drink or take drugs to stunning excess assuming it will kill them. Each of them feel they are “different” and will have greater control over the results of activities that are doomed to similar results. Relationship Selling is so different from the traditional Price/Quote model that mixing the two will inevitably lead the prospect to a confused state in which he will assume you are just another price-quoter and will no longer value any analysis and advice you have given him.

The Asset Protection Model of Relationship Selling has now been in use for almost 20 years. It has converted agencies from the price-quoting that started with the advent of automated quoting and gained notoriety with the direct writers who have convinced many insurance buyers that insurance policies are all the same and so are the carriers with the only difference being the price charged. Between “Flo”, “the gecko” and 15 minute quoting, many people are being improperly insured. However, the law of large numbers does apply to insurance and most people and businesses will never have a loss, so whatever they are paying for, they are getting some peace of mind that they have insurance.

However, many of our clients understand that proper coverage, not cost determines their level of protection. Others have had poor experiences with the direct writers as the result of claims. Others are smart enough to know that their homes, lives, families, assets and businesses are far too valuable to risk to minimum limits of liability or value-priced products without the research and good counsel that marks prudent asset protection.

We have lost the folks who will buy the cheapest and shop for insurance much more casually than they shop for cars or shoes. And, frankly, most of us are too busy protecting the clients who care to invest much of our time on reverse education to teach people that protecting their assets is more than going on line and getting the cheapest price.

So, as insurance consultants we spread the word about Relationship Selling, but we stress both the rewards AND THE COSTS of the process in an attempt to qualify the model for only those agents who understand the long term ramifications and are willing and able to change from insurance ‘salespeople’ to ‘insurance counselors’.


A Relationship Manager under a good relationship selling model (like the Asset Protection Model) will only have 150 to 200 prospects MAXIMUM. The reason the RM can only manage 150 prospects is because in order to build a relationship two things must happen. First, you have to see the prospect frequently enough to build a trusted friend relationship. This can’t be done seeing the prospect once or even twice a year. In needs at least four to five personal contacts each year. And, since we’ve never seen someone make friends by phone or mail, these contacts must be in person. This takes time (and cost)

The second requirement to build a relationship is to provide the prospect more value (before you become his agent) than he is getting from his current insurance provider. This is not normally a difficult issue because an insurance client normally gets NO value from his agent after the sale. So each visit requires a prepared agenda that delivers some form of value to the prospect.

Four to five visits per year seriously limits the number of prospects that an RM can handle to 150 to 200 AND bears a cost to the agency. For instance, a $50,000 compensation to an RM would result in a cost to the agency of $333 for every prospect seen based on 150 prospects and that is without any cost of benefits, T&E, housing, support, etc. The $333 is the DEAD COST to pay the RM. The actual cost is usually at least 50% higher requiring the agency to support $500 or more/year per prospect in expense. That is why we encourage RM’s to draw as little as they need to pay their household expenses as their basic compensation. It doesn’t stop them from making as much money as their productivity allows, but it lowers the break-even position and allows for a longer transition without harming the RM or the agency.

And since the duration of marketing in the APM (Asset Protection Model) is three years to maximize the opportunity to convert the prospect to an agency client, we are prepared to spend a considerable amount to REAP a new customer ($1,500 in this example).

Obviously, you cannot market to accounts that will generate $500/year in commissions (once they are converted) because it would take six to seven years to recoup agency investment and gain a profit from these clients.

For this reason the model for an agency entering a Relationship Management program is to target accounts that will generate in one year a commission level equal to the investment that the agency has made in building the relationship.

In our example a $50,000 RM with 150 prospects would be targeting a minimum size prospects base of $1,000 to $1,500/yr in potential commissions ($12,000 – $15,000 premium under normal circumstances). While there are many insurance buyers under that level, the key to success is that the revenue generation level is NOT just from one product, but from all products that a prospects needs to properly protect his assets.

Suddenly even small businesses (with normal personal lines needs) can achieve those levels. One key ingredient to Relationship Selling is the requirement to analyze and review (eventually taking over) ALL FORMS OF INSURANCE PRODUCTS NEEDED BY THE CLIENT.


If you assume for a moment that you close 60% of the prospects you see within the three years that you market to prospects using the relationship selling model (the actual average is over 75%), and assuming that the average is a minimum of $1,000 of annual commissions for his insurance products and assuming an average life of 10 years (the average hasn’t yet been determined because the retention rate is over 95%), each APM client will yield you $10,000 of direct income over the first 10 years of their lifetime.

However, another part of the program required for its success is Active Referrals that gain a new relationship from 50% of the clients every year (the current average). Even using a 33% referral rate for conservative estimates, it becomes evident that the RM will NEVER need to generate prospect lists (after the first few years) unless the agency decides to open new target markets. The referral flow from the growing client base will feed the RM for as long as (s)he desires to grow the book of business and make more money.

By proper application of a relationship selling model like the APM, an agency can generate a growing revenue base that will yield hundreds of thousands of dollars a year (minimum) by the 10th year of the program.

A conservative model starting with 150 prospects generating just 30 new clients in the each of the first three years at a $1,000 average income per account (from all policies written) with a 90% retention (compared to our average 95%) and a 33% referral rate (with our average at 50%) would generate 374 clients over a 10 year period. We can all figure out how much that is worth at an average of $1,000/yr per client. The total commission income from that activity over a ten year period (for just the original 150 prospects and their referrals) would be $1,829,000. And these results are for well less than the average success rate, referral rate and retention rate.


The cost of the program is based on the three year cycle required to make an RM fully productive. The revenues generated are wonderful – if the RM continues the course and follows the dictates and modules of relationship selling, visiting prospects and clients often (bringing value at each intervention) to build and cement relationships, analyzing and helping clients protect ALL of their insurable assets and adopting referrals from clients actively and annually.

We encourage you to call us and investigate whether the Asset Protection Model could be the transition that moves you from being a busy agency to a productive one.