Is selling the same as prospecting?
Is selling the same as quoting?
I submit to you that selling in the insurance business is comprised of two components, neither of which involves prospecting and quoting. Selling insurance is comprised of building relationships and closing the sale. If your producers can perform these two functions, they will be successful. But what about prospecting & quoting? Knocking on doors, making telephone calls and sending out mass mailings are certain methods to spend time and money, but not necessarily to make sales. If you have hired producers, whether on salary, draw or commissions, their competency will be judged by the number of clients they bring to the agency who stay with you for a long time. Wouldn’t it make sense to concentrate their efforts on those areas that will provide the highest pay-off?
When did the insurance agency industry determine that producers were not only responsible for the sales themselves but also responsible for bringing prospects to the agency? Most other industries have marketing and advertising functions that attract the attention of potential customers, leaving the sales staff to develop relationships and close the sale. The job of marketing and advertising the agency to potential customers should be focused on a dedicated marketing manager, or, in smaller agencies, should be the responsibility of the agency owner. The success of any individual in a job correlates directly to the risks involved, the focus of responsibility and the ability to measure results. When a marketing manager is appointed in a larger agency, the position focuses on drawing potential customers to the agency. The measurements of success are evident – how many prospects are brought to the agency’s door. In smaller agencies this responsibility should fall to the owner simply because both the risk and the rewards accrue to the owner. The cost of marketing and advertising is born by the agency owner and the asset value is the result of growth is also that of the agency owner.
It makes sense that the producer on the account, being the primary contact with the customer, should be responsible for collecting the data necessary in order to provide a quote. In far too many cases, however, the producer is responsible for developing the quote, talking to the company underwriters and generating a proposal. The time necessary to accomplish these tasks would be better used by a producer contacting other prospects for sales. In fact, most producers are not the most competent people in the agency to develop the quote itself. They are also far too involved and subjective to deal objectively with company underwriters. They are often perceived as being pushy seeking favors and special dispensations. If the producer does his job properly, he will know what is needed in order to close the sale and will pass that information to the staff responsible for marketing the product to the carriers.
The most successful producers that we have encountered focus their time and energy to building and maintaining relationships with prospects and existing clients off-loading all other responsibilities to other agency staff. Sometimes this is seen as “glad-handing”. However, if the salesperson’s talent is in building relationship and closing sales, that is his greatest value to the agency. Don’t turn salespeople in to clerks, telephone solicitors or telemarketers.
Unfortunately most of the producers who we have encountered in insurance agencies make better underwriters than they do salespeople. While they are technically competent, they only thing they have to sell is price. They get in to the prospect’s door by convincing him that they can write their insurance cheaper. If they can, they only stand a moderate chance of gaining the account. You see, the customer probably has a relationship with his incumbent agent and will give him a last chance to meet the quote. If the new producer can’t provide a less expensive insurance package, he has confirmed the prospect’s decision to stay with his current agent and probably stands a poor chance of ever building a strong relationship with that prospect. If you are one of the agencies who have producers who either do not have a sales personality and/or do not spend their time in the sales functions (building relationships and closing sales), calling them producers and giving them sales goals and responsibilities is self-defeating. They will become frustrated by their lack of sales abilities and you will never achieve your sales goals.
We recommend that both prospective producers and existing producers be tested. Only one in seven people have the right characteristics to become a salesman. But just because a young man has the ability to hit or catch a baseball, it doesn’t mean that he will evolve the skills to become a major league player. Similarly, even those people who test well as salespeople may not have developed the skills in relationship building and closing techniques to become successful in sales. As agency owners you already know which of your producers are successful salespeople and which are not. You know which have the skills and which don’t. Testing can only help you confirm that. Whether you test or inherently know that some of your production staff have not been, are not and will never be successful salespeople, it is your responsibility to do something about it. If you have a young man or woman with the proper sales personality but without the skills, invest in them and provide skills training. If, on the other hand, you have an existing producer who should not be in that capacity, don’t wait any longer – provide him or her the opportunity to develop their career in a different direction. A producer who can’t sell insurance unless his price is twenty percent below the lowest competitor will live a long and unsatisfying life in sales. Whether you have a job for that person in another capacity or not, his or her best interest would be served outside the field of sales. The agency is better off actively pursuing new sources of salespeople than it is expending its time and money supporting producers who will never be successful salespeople.