Super Agent

Posts Tagged ‘sales pipeline’

Are You Riding the Revenue Rollercoaster?

We see it all the time—producers become obsessed with a group of prospects they’ve hooked and are trying to reel in, and they let their lead nurturing activities go by the wayside. They spend all of their time focusing on them, they’ll even spend a day or two in the office just thinking about them. In the end, a few of these prospects do become clients, but, when it’s time for the producer to get back to work prospecting, he or she realizes that their pipeline is empty. When the business doesn’t come they move on to a new set of prospects to blitz, and the cycle of peaks and valleys continues.

What if this producer had spent only 3 to 6 hours per week, in the weeks leading up to these sales, on lead nurturing activities? Even better, what if these activities were already on his calendar as part of a client-attraction program focused on the long-term? 

When producers focus solely on managing their book, they are setting themselves up to be trapped in this cycle. If they consistently take the time to develop, qualify and nurture leads through a pipeline they will grow steadily and organically and see greater success.

“Lead-nurturing is having consistent and meaningful communication with viable customers regardless of their time to purchase.”—Brain Carroll

Little Things Make Big Things Happen

I recently had to have my car towed from our office parking lot to a Tires Plus in order to have my battery replaced. As I was paying my bill the man cashing me out asked if I would consider donating to Meals on Wheels Association by rounding my bill up to the nearest dollar. For anyone who isn’t familiar with the organization, Meals on Wheels offers a meal delivery service directly to homebound seniors. Donating less than a dollar was a minor thing, so after I agreed to round up my bill I asked what kind of an impact Tires Plus makes with these small donations. He told me that each month, they raise around 100,000 dollars for Meals on Wheels. My 30 odd cents may have been small, but 100, 000 dollars can make a big impact for a worthy cause.

The story proves that small things done well over time can have a big impact, and this is also true for producers as they attempt to meet their revenue goals. For example, if you have a $350,000 book of business which, through your conversations, you manage to increase by 10%, how would that impact your goal of $100,000 for the year?

Now that the first quarter of the year is in full swing, here are a few questions to consider:

-Are you having conversations with your clients to find out what matters to them?

-How would up-serving your clients better protect them and your agency?

-Are you making assumptions and decisions on behalf of your clients instead of having conversations?

If you are investing your time and effort in the small things necessary to grow your book of business, you will better secure your accounts, increase your revenue and see the impact these activities will have on your goals.

“It’s the little details that are vital. Little things make big things happen.”- John Wooden

Back to the Basics

Most independent insurance agencies and agents would agree that relying on contingency commissions alone is not a reliable strategy for long-term growth. In today’s competitive and complex market there is only one option for growing an agency: organically. Organic growth involves implementing a distinct and repeatable sales process that attracts and retains higher revenue accounts. It is a top objective of many agencies today who struggle to gain new business and differentiate from competitors.

The good news? Many basic organic growth tactics can still deliver results if they are practiced within a well-structured sales process. Here are a few crucial questions that can be used as indicators of the quality of your pipeline and growth opportunities:

(1) When was the last time your agents cold-called right-fit, high profitability prospects?
(2) When was the last time your agents reached out to peers and leveraged their centers of influence?
(3) Are your agents practicing and reevaluating strategies that will cultivate long-term client relationships?

According to Ken Favaro of Booz & Co., “growing organically is a skill companies can develop, not an advantage they temporarily gain as a result of a hot product or successful business model. When companies put their minds to it, organic growth is the daily, weekly, monthly, and yearly outcome of finding, funding, and acting on opportunities that are often hiding in plain sight.”

Setting Realistic Revenue Goals

We often see agencies and producers setting their revenue goals based on what they want or hope to achieve, or what an account manager needs to achieve. These are important considerations, but when setting realistic revenue goals they are rarely the indicators that equal success. According to finance writer Leo Sun, “failing to set realistic goals by being too conservative or ambitious can have disastrous results.”

So, what indicators are necessary to consider when you are setting revenue goals?

1. Quality and activity of your pipeline. It shouldn’t come as a big surprise that these factors are at the top of the list. Without an adequate pipeline producers and agencies will struggle to grow their business. Whether you rely on cold-calling or referrals from centers-of-influence, it’s important to assess your pipeline on a regular basis in order to set realistic revenue goals. If your pipeline doesn’t accurately represent the current market opportunities available to your agency, it’s time to reassess.

2. Past performance and producer capabilities. Analyzing your past performance can help you assess the probability of future success, or, in some cases, failure. It is important to remember that desire isn’t ability. Without a change in behavior, it is unlikely that a producer who has consistently been in the middle of the pack will become a top performer.

3. Market conditions. Although this should play a more limited role when assessing revenue goals, it is still important to consider. A hardening market, for example, will increase difficulties for producers who have focused on high-risk businesses—especially in workers’ compensation, and market conditions can also transform a right-fit client into a wrong-fit client.

Agencies and producers who consider these facts and performance measures will be less likely to set goals based on hopes,  and will be more likely meet the objectives they set as a component of their growth strategy.

Segment Your Opportunites & Customize Your Message

In today’s difficult market, if producers want to experience organic growth, the development of a sound pipeline is necessary to consistently generate new business and track sales. A pipeline is frequently described as a list of leads in different stages of development, and traditional pipelines often divide leads into two categories: suspects and prospects. In our organization we divide the pipeline into three distinct categories: suspect pool, suspects, and prospects. In order to successfully fill a pipeline and develop leads into “client-ready” prospects, producers must approach the lead nurturing process with a long-term plan. The frequency and type of messaging strategies deployed to leads should be different in each stage of the pipeline.

Here is a breakdown of the three categories and what messaging strategies can be deployed in each stage:

Suspect Pool- Leads in the suspect pool have not been fully qualified, but the potential for them to become a right-fit client is present. The goal is to deliver value based messages to these leads frequently and at a low-cost in order to see who shows interest. If a lead who shows interest shares similar business goals and objectives with the agency but isn’t ready to develop a business relationship, they move from a Suspect Pool to a Suspect.

Suspect-The leads in the Suspect stage of the pipeline receive specifically targeted and more frequent messaging than those in the Suspect Pool. This allows both the producer and the suspect to learn more about each other and to continue assessing the potential for a business relationship.

Prospects- These leads continue to receive frequent and targeted messaging, but the communication between producer and prospect should be occurring in both directions. The prospect already recognizes the value of the producer’s capabilities and is considering engaging in a business relationship. In turn, the producer recognizes that the prospect meets the criteria of their perfect-client type and is ready to guide the prospect through the sales process.

Inc. contributing editor Donna Fenn discusses the value of segmenting your opportunities and customizing your message: “As time passes, you can begin to track what share of sales you close. If that share is consistent, you should be able to forecast sales with greater accuracy.” A well-managed pipeline will prevent producers from employing ineffective sales strategies, and will allow them to better forecast and close more sales.

Capabilities of Sales Leaders

In today’s sales environment, employers prefer business relationships with producers who will be able to lead them through a process of improving their business and guide them towards increased profitability. We’ve discussed how the majority of prospects you meet won’t be following a successful process to buy insurance and manage risk, and we’ve addressed the importance of taking on the role of leader in business relationships with them.

Sales leadership is a skill that few have but that any willing producer can be taught. Leadership is essential to effectively and proficiently guide the prospect through the buying process. According to Tom Searcy, “customers crave tailored insight and a guide who can intelligently direct them to make the most effective decision for their company.”

So, what tools and capabilities should you possess in order to be a successful producer and sales leader?

1) The ability to help prospects self-discover threats and risks which they were previously unaware of—you can do this by asking the right questions.
2) The ability to create relationships and leverage centers of influence to increase business opportunities.
3) The ability to create a plan of action and vision for a future relationship in the sales process.
4) The ability to align agency goals and capabilities with employer goals, needs, and objectives
5) The ability to identify right-fit clients and secure business for yourself and your agency by maintaining an adequate pipeline.

Producers who are self-directed leaders, and who are accountable to themselves, their team and their agency will inspire others and amplify their own success.

Agency Strategy vs. Agent Strategy

We are frequently asked to assist clients with developing a strategy for helping their agency acquire new business.

We have a defined process that helps an agency focus on not only creating messages that will help them get in the door with leverage, but also evaluate whose door they want to get in to and what value they can deliver once they are in it.

What sometimes becomes apparent is that while there is an agent strategy for getting in the door with leverage, there isn’t always an agency strategy. To be truly effective agencies must have both and here’s why:

In some instances Producers can answer fundamental strategic questions such as those shared by author Ken Favaro, a senior partner at Booz & Company in his article The Two Levels of Strategy

1. Who is the target customer?

2. What is the value proposition for this customer?

3. What are the essential capabilities necessary to deliver that value?

But before an agent can answer these questions, agencies must ask and answer a different set of strategic questions related to

1. Who do they want to do business with and

2. How as a company they should add value to those businesses

Until the agency has identified it’s right-fit client, it’s capabilities and it’s value proposition it is virtually impossible for an agent to.

Here’s why-if an agency hasn’t gained clarity in the areas mentioned above then it is left to the individual agent to develop clarity for his or her prospective relationships. If an agency has 10, 15 or 20 agents selling on its behalf-that’s a lot of people determining the agency’s strategy. It’s likely that there will be messaging inconsistencies and conflicts in this scenario which will ultimately damage the agency’s brand and increase client acquisition and retention costs.

If agencies want to increase pipeline, closing ratios and retention, they have to develop a strategy to do that first-then work with individual producers to develop a business development strategy for their pipeline that’s in alignment with the agency’s.

 

 

Insurance Agents Attempts to Prove Value

Many insurance agents want to demonstrate and quantify the value they bring to their clients.  Quantifying value is hot topic, but done incorrectly agents may actually erode their credibility instead of enhancing it. 

As we have often stated in this blog, decisions to engage in a business relationship with you is driven by emotions first, and the logic comes later.  So, trying to prove your value on the front end with contortions of logic and fuzzy math is not only ineffective, but risky.  If a decision maker just smells a whiff of baloney, you will be summarily dismissed.

Let’s assume an employer is experiencing challenges with their Workers’ Compensation program.  Too many employees are entering the system after an injury and not returning to work.  Engaging in a dialog about this challenge and gaining agreement from the employer that they want to improve their outcomes is a first step.  Then, demonstrate you have effective processes to achieve their objectives.   The employer does not need to hear that you will save them $121,332.42 with your processes.  It won’t pass the smell test.  They want to feel and know that you understand the driving factors to their issues and can mitigate them.

If the challenge is important to them and they recognize that without a better process, that their business and employees will suffer, then they will follow you.  Assuming you have the capabilities.  Putting a number on it is not necessary and may even be foolish.

As Seth Godin said in Lynchpin the easier something is to quantify, the less it’s worth. I think there’s more than a bit of truth in that.

You can assume this will not be the last said on this topic.