Five Elements of Insurance Agency Growth: How the Performance Management Process Improved

A good performance management process is no longer enough to ensure the growth of insurance agencies. What can ensure it, however, is a good performance management process rooted in the five core elements of engagement, business process, sales training, skills training, and accountability. Before reviewing these core elements, let’s first look at what the status quo is in the industry.

If business owners and agency directors were asked to define their performance management process, none of them would agree or have the same understanding of what those three words mean. Furthermore, very few of them would see insurance sales as the cornerstone of performance and how they manage that sales process as a key determinant of agency growth. Many insurance agencies operate with the firm belief that the insurance business “is what it is” and that is how “we have always done it”. They haven’t committed their agency to any specific goals and they don’t really have a goal-setting process for their producers. There are also no set performance standards and no real consequences for not meeting those standards.

Many agency directors only have a linear view of the growth of producers and agencies. Write more policies, register more businesses, grow and earn more money. Write fewer policies, lose bills, don’t grow, make less money. Proof of this limited growth mindset is found in the number of men over 50 in agencies who have been there for years and are still making $40-$50K a year in an industry where they could be making twice as much because the money in insurance sales is there to be made. These agency directors are content with the status quo. They agree with how things work and don’t want to change anything. They say they are too busy to implement a new process to improve their growers’ performance or help them improve their performance management process.

Then there are the agency directors who want to grow. They want to create an agency that is motivated, focused, and productive and fosters a sales culture that puts more money on the bottom line, revolutionizes growth on the bottom line, creates shareholder wealth, and provides the mechanism, the process, the system. . that generates better income for them and for their producers.

I believe there are five elements to extraordinary growth and they focus on the following precepts: 1) Commitment; 2) a business plan or process; 3) sales training; 4) skills training; and 5) Responsibility: I adhere to this belief because it delivers on its promise. These core elements create extraordinary and unprecedented growth in the agency.

Commitment. Engagement begins with the lead agency. For the agency to grow and prosper, the head of the agency must be willing to make a commitment to the agency itself and to each producer who works there. He starts by making a promise to his producers. Make it powerful, make a dramatic departure from how things have been. Think out of the box. Create a commitment that is concrete, measurable, and compelling enough to propel both you and your growers to further growth. Tell them you’re committed to helping them double their income fast. Not only would you motivate the bottom 80% of your producers, but your passion for helping them grow financially would drive the momentum toward more growth for you, them, and the agency.

business processes. Most insurance agencies do not have a business process. They have a process for how policies are underwritten, how prices are quoted, and how customer billing procedures are set up. They have a system to keep track of your book of business. But what most of them don’t have is a process by which new business is generated and new growth opportunities arise.

To grow, agency directors must have a business process, a flight plan, a playbook that explains step by step who is going to play the game, who needs what to play it, and where each player will be at each moment. to play. The playbook defines the rules of the game and teaches agency directors and their producers how to play by the rules. And it starts with perspective. When you develop a solid business plan like this, it’s reliable and repeatable.

Sales training. Of the five basic elements of extraordinary growth, none is more important than training. Nothing offers a greater return on an agency director’s investment than training producers to master the skills that will best equip them and the agency to achieve their goals and experience real growth. Without training, how can you execute the plays in your playbook? How effective can you be with the business process?

So what do you train them on? First, teach them how to meet with your best clients and ask for those introductions. Give them the ability to tap into everyone in your book of business and everyone they know. People are the hidden asset that an agency has to generate new business, earn more money and create a higher net worth. Second, train them on pre-call strategy. Teach them how to develop a good relationship with the customer and build a relationship with them. Train them to differentiate themselves and their proactive services from the competition or “headlines.” Teach them how to consistently remove the headline so they can improve their close rate and win more business. Lastly, train them on how to negotiate a written service agreement with their customers. And do all of this to not only give them a high level of skill, but also the confidence to go out and use these skills effectively.

Skills Training. Skills training is about turning sales skills into action, into learned behaviors. The best vehicle an agency director has to achieve that conversion is a sales meeting. But not the kind of sales meeting we’re all accused of, not the kind that starts with the agency head going over last month’s numbers and the sales manager calling producers to share success stories. It’s not the kind of meeting where everyone discusses what’s new in the pipeline and the sales manager asks what the chances are of winning that account. At these sales meetings, producers learn how to work introductions, strategize pre-call, and figure out how to arrest the headline. They learn how to use agency resources to quote a business, prepare a presentation, and create a written service agreement, and learn how to develop contingency plans.

Responsibility. There are two elements of liability. First of all, agency directors must know how to count. They have to have a system to keep track of prospects and existing customers. They have to be able to create channels for their producers. Second, there must be consequences. If you don’t have well-defined consequences for things like high performance and low performance, it will be difficult to create accountability, and without accountability, nothing gets done.

The biggest problem agency directors have in creating accountability is fear. They are afraid to commit. They are afraid of setting consequences. They don’t want to commit because they fear it will upset the status quo and ruffle the feathers. However, to grow, producers must be held accountable for their performance, and agency heads must adopt a mindset that expresses the belief that they are creating accountability for the greater good and for a greater cause: helping producers double their revenue and creating greater profitability so that with those profits the agency can invest in new producers and proactive services that continue to give it its competitive advantage.

As I have said, a good performance management process is no longer enough to ensure the growth of insurance agencies. However, a good performance management process rooted in these five core elements can. Mastering the elements of engagement, business process, sales training, skills training, and accountability takes the performance management process in an insurance agency to a whole new level and virtually guarantees not just growth, but extraordinary growth, for the agency. and for owners and managers. , and the producers who work there.