The past several years of a hard market and rising insurance rates has enabled most firms to realize some organic revenue growth. As insurance rates inevitably begin to ease, firms that wish to remain competitive will need to focus on strategies that drive continuous growth. While no two firms will follow the exact same path, here are four factors that firms of all sizes should consider when building a growth strategy.
Sales leadership
Sales leadership is an important concept for organizations of any size. At a certain scale, some larger firms may designate someone entirely dedicated to this function, while smaller firms may choose to elevate an existing producer to a player-coach position. Whether or not sales leadership is expected to carry sales goals, and the amount of time spent on management, will differ based on the needs of the team and the firm. Most importantly, leadership must clearly define the expectations, establish accountability, and set an appropriate compensation structure for whomever is responsible to drive revenue.
Specialization and diversification
Most firms, particularly as they grow, will naturally find certain areas or specializations in which they have expertise and competitive advantages. Those that wish to branch out into new niches, geographies, or client segments, will need to clearly define how and when they will approach new markets and how deliberately they will pursue diversification. Some may take a passive approach wherein relationships and referrals lead to new business opportunities. Others may decide to spend time and money to invest in a new client demographic. Either way, the key to success is understanding the markets, the players in the market, and having clear objectives and milestones that everyone in the firm understands.
Recruiting
One of the most important components to an aggressive growth strategy is hiring, training, and developing the right producers. It is critical to assess the needs and capabilities of the team to ensure that hiring is intentional and successful. Here are some factors to consider when creating a hiring strategy:
- Firm’s capacity to do a full training program. Hiring inexperienced producers requires a significant investment in training and mentoring whereas hiring seasoned professionals may be more efficient from an onboarding perspective.
- Recruiting from other industries. Firms may consider finding candidates that have the right skillset and sales acumen but without direct industry experience. While there will be a learning curve related to selling an unfamiliar product, these individuals have demonstrated an ability to build new business and are likely to replicate that success.
- Firm differentiation. For those firms looking to hire candidates with direct experience, the value proposition to those targets will likely be focused on providing a better fit from a culture and development perspective. Recruiting high performing candidates will require a firm to clearly define what they have to offer that would incentivize candidates to make a change.
Having clear and long-term objectives related to the hiring strategy is critical. Creating and protecting a culture that people are excited to be a part of will go a long way in both recruiting and retention of key talent. Firms that have aggressive growth targets will need to intentionally hire ahead of planned growth to prepare for future expansion. The investments in talent made today are the foundation for the ability to execute tomorrow.
Accountability
With the right team in place, having clear expectations and a culture of accountability is critical for sustained growth. This applies not only to producers, but to the business development teams and corporate resources that support their sales efforts. As leadership considers setting individual and team goals, they should evaluate the overall targets for the organization and ensure that the totality of sales goals will make that possible. In other words, the budget should be evaluated from the top-down and the bottom-up to ensure that goals are achievable and reasonable. Individual goals, particularly for experienced producers, should include both new business and sales velocity components and should be tailored to each person and their capabilities. Once these expectations are clear, there must be a system of accountability, possibly including some non-compensation related incentives.
In 2023, the average firm had organic growth of 10.2% and the top quartile achieved organic growth of 18.7%. To remain competitive in today’s market, firms will need to find ways to maintain their recent growth – perhaps in a less generous rate environment. It will require leadership to be forward thinking about building the right team and sales culture for the future.
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