The Proven Secret to Unlocking Growth
What if we said there was a cure-all to help combat rate pressure and to manage issues related to flat growth, increasing expenses, employee attrition and a so-so EBITDA (Earnings Before Interest, Taxes, Depreciation & Amortization) margin? What if we said you could stop obsessing over these numbers as “the problem” if you focused on one solution that would drastically change your culture, performance, profitability and sustainability as an agency?
When an agency is focused on new business production and creates a dynamic, rewarding sales culture that breeds accountability and delivers results, all that other stuff fades in its relevance to the firm’s overall success. The rates, the economy, the competition—they don’t matter as much when new business is being generated at a pace of at least 15% year over year. Agencies that successfully achieve this are ahead of the game.
So, it’s not as simple as “new business” and done. But we know from high-performing agencies that foster a sales culture that resilience is the reward of focusing on activity and the insured’s buying process.
That means creating a true sales culture that is driven by a vision. It includes outlining performance expectations and establishing goals and performance expectations that will reduce the learning curve so producers can target prospects, build relationships, deliver a world-class value proposition, and win accounts.
When an agency is focused on going after larger accounts, the business sees greater results and can sell less to reach a goal. Then, by pushing that goal up and target account size up, the agency can sell the same number of accounts and reach that higher goal. Sales-driven organizations focus on not the quantity, but the quality of accounts. They’re not talking about renewals—they’re targeting prospects and monitoring sales activity.
There are a few key best practices that encourage accountability:
1. Performing annual producer book reviews
This tool allows management and producers to track success, measure changes and change course as needed. An annual book review also gives management an opportunity to reinforce expectations. More than 90% of high-growth agencies use this practice today vs. 70% of average and high-growth agencies 2015.
2. Enforcing negative consequences
So, what if producers don’t meet minimum goals. What gives? Are they treated to the same commission as high-performers? What will motivate under-performers to up their game? Interestingly, 45% of high-growth agencies said yes, they enforce negative consequences for non-performing producers. More average agencies (47%) enforce consequences.
3. Publicly displaying sales results
Accountability Filters Out Non-Performing Producers
Accountability isn’t a bad thing—it’s not mean or negative for morale. In fact, the result of holding producers accountable for their performance is the exact opposite. Accountability is cultural, and it is fostered by implementing the above performance management strategies. When producers are held accountable by management, they recognize their work is part of a greater goal—a vision that’s much bigger than what’s happening at their own desks. They understand what it takes to get to the next level as an organization, and that every player on the team has a part to play in the agency’s success.
So, what’s the secret to becoming a high-growth agency? What’s the good medicine to find stability in times of economic uncertainty, and to weather rate drops and other market shifts? What’s the secret to sustainability?
THREE WORDS: PRODUCE. NEW. BUSINESS. WHAT'S YOUR STRATEGY?