I was recently speaking to an agency owner who shared a conversation he had just had with one of his producers. The producer had come into the owner’s office, plopped down in the desk side chair and asked, “When did this industry become not fun?” He then went on to tell the owner that he had just gotten word from a long-time account that they were moving to another broker.
Now, I get that losing an account makes for a bad day. In fact, if there is ever a day when you lose an account and it doesn’t totally ruin your day, then it was either such a toxic account you should have fired them as a client a long time ago or else it’s just plain time for you to get out of sales.
Of course, this wasn’t the first time I’ve heard someone ask the question. In fact, I imagine many of you reading this have asked yourself the same question at some point. As common as the question might be, it still gets my attention when I hear it asked. Sure, it can just be a momentary expression of frustration, but it can also be a signal of bigger issues. It may imply that the producer feels there is some greater industry force at work that has control over him and that it is somebody else’s responsibility to make sure he is having fun. Not feeling you control your own destiny is a scary place to be.
I explained to the owner that “fun” (feel free to also substitute “success”) is like the answer to a math equation. Subtract the number of bad days (losing an account) from the number of good days (picking up an account), and the answer is how much fun you are having. When your good days exceed bad days, you are generally having fun. When your good days significantly exceed bad days, you’re almost giddy. On the flip side, when you are losing more accounts than you are winning, the producer was right – it’s no fun. In fact, it just plain sucks.
Like most things in the universe, our industry has a balance. With the exception of new businesses opening or existing businesses closing, there are an even number of bad days and good days. Whenever one producer has a good day there is another producer somewhere having a bad day as a result of the same decision. That’s just the way it is.
The industry becomes no fun the very same day you quit working hard enough to ensure you have more good days than bad. When we start out, we have no choice. We have to have wins just to survive. When survival is on the line you are driven by your hunger and you have to work hard. Being aggressive is all you know, and the immediate reward of the adrenaline rush that comes from closing deals becomes addictive and further fuels your drive and the next success. Of course it was fun back then – you were winning on a regular basis.
One of the ironies of success is that at some point, (and it’s different for everyone), it quits becoming fuel for your competitive fire and may actually cause that competitive flame to flicker and die. All too often, I have seen producers achieve more success and financial reward than they could have ever conceived possible, and they stop competing, they become complacent. That is the day the industry becomes no fun for them.
When you are no longer the aggressor, it is only a matter of time before you become the victim. Not only the victim of a lost account, but the victim of allowing your control and your fun to be taken from you.
I predict there will be more account movement over the next couple of years than we have ever seen. Convincing yourself that you need to be more focused on defending what you already have is an easy trap to fall into. It’s also incredibly dangerous. You have a team whose responsibility it is to be the primary defense of existing accounts. Your responsibility, as a producer, is to go out and get more and make sure you are on the winning side of that account movement.
Bad days are inevitable; they are going to find you. In an economy like this, the balance is harder to maintain. Some clients will go out of business. Others will get acquired. And yet other clients will be taken from you because of other producers who are committed to building a surplus of good days for themselves.
Unfortunately, good days don’t just show up. It is up to you to create them. It’s up to you to ensure they outnumber the bad. It’s up to you to ensure you are having fun.
If you find yourself relating to the question asked by my producer friend, if this industry isn’t as fun for you as it once was, don’t sit and disparage the industry. Don’t make excuses. Don’t go into defense mode. Get out there and create your own fun.
Go take control. Find your appetite and become the aggressor you once were. Reintroduce yourself to the adrenaline rush of closing deals and feed that habit on a regular basis.
For those who are willing to make it so, the most fun days this industry has ever offered are still ahead. It can be that way for you. You just have to ask yourself, “How badly do I really want to have fun?”
Photo by Lucy Boynton.
Believe it or not, we are already to that time of year that we need to be planning for next year. It's crazy how fast a year can pass!
My hope is that every agency and producer reading this post is already in the middle of planning for sales success in 2013. Unfortunately, my guess is that many of you aren't. I also guess that many of you will never get to that planning. This isn't just a wild, pessimistic guess on my part; it's based on too many conversations I have had with agencies considering joining our network.
As part of our interview process, I will ask them to explain how they approach producer planning. The answer I hear most often is, "Oh, we do that. Every one of our producers knows exactly how much we hope they write this year." That isn't a plan. That's nothing more than a wish.
I believe that the producer planning doesn't happen for three main reasons.
If you struggle with the first reason, contact us and we'll help you make it easier and less time consuming. If you struggle with the third reason, watch for a future blog on how to address this problem.
Today, I wanted to mainly focus on the second reason, the thought that planning isn't necessary.
If you are an owner/executive in the agency, I want you to stop thinking about the employer/employee relationship with your producers for a moment and instead look at them from the perspective of an investor.
Producers tend to think of their book of business as their "Me, Inc." (a perspective I admire and promote). Now, think of each "Me, Inc." as an investment opportunity. You aren't going to write a check for stock, but you will write (are currently writing) a check to pay for the infrastructure, procure the necessary resources, and provide the staff to help support that "Me, Inc."
What's the first question you normally ask before making an investment? Of course, you want to know what kind of ROI you can expect. You want to know how that business is positioned for success. You want to know what their plan is for growth and profitability. Those are responsible questions to ask. If a potential company couldn't answer those questions to your satisfaction, you would never make the investment. So, why wouldn't you have the same questions and expectations for the "Me, Inc." of every one of your producers?
And to producers, you are an investor in this too. While you aren't writing checks, your investment is actually something even more precious – your time. Do you have enough confidence in your own "Me, Inc." and in its ability to provide the appropriate return on your time investment?
If you were a bank/investor looking at your "Me, Inc.", would you write the check or make the loan? Would you be comfortable in your Plan, and ability, to deliver an ROI?
It's a cruel joke the industry has played on you. Because the financial reward for mediocrity has been so high, we have been able to largely get by without planning. Those days are now over. If you don't call the bluff, the industry will have the last laugh.
ROI will no longer happen just because you show up. You have to plan to make it happen, Producer by Producer.
Photo by The PLAN Fund.
How do you know if you’ve hired the wrong people? You need to micromanage their every move.
How do you know if you’re just a micromanager independent of the people? You micromanage every person, initiative, and task within your grasp regardless of competence – yours or theirs.
This might not come as a surprise, but no one likes to be micromanaged. Especially people who like to think and do. These thinkers and doers are particularly offended by such scrutiny and limitations on their ability to do their jobs effectively.
If the leader truly plans to manage every detail in the organization, then he/she needs to be hiring “yes” people – you know, the ones who don’t like to think. They just trade hours for a paycheck and can meet the minimum expectations of the job. And can tolerate being told what to do and how to do it.
If the leader doesn’t want to have do deal with this level of detail, then it’s best to hire independent thinkers – those who like to do the research for the best ideas and then put them into practice.*
*This one comes with a big warning. If you hire independent thinkers and enthusiastic doers and then prevent them from taking initiative, you’re running the very immediate risk of them leaving.
Unless you’ve got a one-person company, you’re hiring these additional people to help think and do. And you ought to be hiring competent people whom you can trust to do their jobs exceptionally well. They should bring expertise that is complementary to currently existing skills and knowledge in the company.
And they should be looked upon with great enthusiasm for the fresh perspective they bring and their willingness to jump in and do these new jobs with their fiery passion.
Business owners have a lot of things to think about on a daily basis, and being an expert in one or more disciplines within the company will have to depend on the size of the organization. If you are a one or two person company, you’d better do your homework quickly and get up to speed in some unfamiliar territory – for producer-owners maybe it’s marketing and client service.
If you’ve got a larger organization, then the owner doesn’t need to be that expert in all those areas. That’s what the team is for.
When you hire people to manage specific areas, you should be looking to them for advice because they are the content-area experts and can help achieve company goals bigger, better, faster. If you’re not getting that expert–level advice and instead finding yourself micromanaging them and their activities, then you need to go back and do the micromanagement test.
While it’s always the leader’s responsibility to set the vision and ensure the company stays on target, he/she needs to let the team determine the best path for getting there. If the leader doesn’t trust and rely on team members to help grow an incredible company that everyone is excited about working for, then it’s time to do some re-evaluation and reflection about the bigger personal and business goals the leader is striving to achieve.
Photo by The Richardson Fosters.
All businesses experience turnover. How you deal with that turnover says a lot about your attitude, your values, your willingness to learn. And it says a lot about your future potential for attracting new employees.
I see employers who clearly have morale issues and do little to nothing to uncover the source of the problem. Or if they do find the source, they choose to do nothing about it. Then, when employees leave, these employers are shocked.
And then they get mad. They get mad at the employee for “deserting them”, or being “disloyal”, or “using them” and then moving on to a better job (which gives the employer the “right” to feel betrayed).
The final step in this dysfunctional cycle is that they vilify the former employee to anyone who will listen. “He wasn’t very good. Poor performer. Bad for the team. Don’t know why I hired him in the first place.”
Former employers bad-mouthing former employees seems to be pretty common. I personally know a number of such situations myself, and I also have enough information from both sides to know that the problems weren’t just a poor performing employees.
For example, I know a CEO who was a bit of a tyrant. When the CFO left the company (to get away from this new CEO), the CEO, in what I can only imagine was an effort to save face, told the staff that it was good riddance, and it was their opportunity to “upgrade.” Really?? What do you think that did to morale? I can tell you it was already on a downhill slide and simply continued from there.
I think that sometimes employers find a comfort in believing that the employees need them and can, therefore, treat their employees any way they want, regardless of care, fairness, or compassion.
What they don’t realize is that they carry out this boorish behavior at the peril of their future success.
Who wants to recruit a friend or recommend a peer to work at a company where she’ll be bad-mouthed and considered incompetent when she chooses to leave? And if the employer is saying those things about former employees, what are they saying about the current employees? Word gets around; reputations are built and talented people know they don't need to work for companies like these.
Employers are not entitled to employees. Any of them. And employees do not “owe” their employers anything beyond exchanging their services for a paycheck.
If an employer really wants to keep their employees on staff, have employees who are genuinely interested in helping the company grow more successful, and become a magnet for talented people, they need to start by realizing they’re not entitled to any of those things. They have to work diligently to create the culture where people are welcomed, appreciated, and respected for their contributions, asked for their opinions and participation in building the business, and acknowledged and rewarded for their efforts.
If you see the negative, bad-mouthing type of behavior at your company or at your client companies, where the employer is always right and all former employees are wrong, I suggest you help dig into the root of the problem. If left unchecked, this will erode any good will currently in place, and it’s really, really hard to build back lost trust and forward momentum.
Photo by Pixel Theif.
If you truly want a team who thinks and acts with intelligence & independence, then you need to make a commitment to continual training & development within your company.
According to research by Allegiance, a core driver of employee engagement is centered in training and contributions: learning new and important skills, being able to offer suggestions, and being able to complete whole jobs rather than just a series of independent tasks. When people feel they are contributing to the success of the organization, they want to do what is best for the company and its customers.
Especially if you’re trying to retain your top talent – development opportunities and career paths are key components to keeping those folks aboard and engaged. If you’re not investing in training because you don’t have the resources, take a look at the whole cost of loss when those key players leave – salary, searching & hiring, training, loss of time, loss of knowledge, residual effects on remaining staff, loss of momentum (about 150% of the employee’s salary). You’ll likely find that it’s a much easier decision to invest in some training.
Developing a culture within your agency of continuous learning starts with a commitment from management. Demonstrating the commitment through courses you take (beyond CE credit classes), books & publications you read, and company resources you allocate is the best way to create and nurture that environment. Nothing speaks louder than actions and dollars.
As you work with your team members to create performance plans, build in personal development that is relevant and appropriate to each person and his/her team.
This can become a fun part of your company culture and one that employees greatly value – while at the same time, helping to build a better company. Win! Win!
Some ideas for personal development
There are unlimited ways you could implement training and development – these are a few to get some ideas rolling within your own company. The important part is not the specific method(s) you choose, the important part is that you get it started!
Do you wish you had an accountability culture in your company?
If you’ve said “Yes” to this question, then you should definitely keep reading. We’ve got some free tools to get you started.
Companies that create an obvious vision and a clear path with accountability to achieve the vision, see greater results from their teams.
We’d like to see that happen for you. And we’ve created a guide to get you started on your path to developing that culture.
Your team will not only produce better results that are in alignment with the company goals, but they’ll be happier as a result, which means they’ll be more engaged and work harder, plus they'll stay with the company longer.
Sounds like a win, win, doesn’t it? It is! So get started today and download the free BGN Accountability Culture Kit.
Track your progress, and let us know how it’s working. We’d love to hear about it, and might even write up an article documenting your progress!
There are countless metrics you can be tracking in regards to your book of business and your efforts to build that book. Tracking the information and creating reports could become a full-time job in itself. Unfortunately, most of that information and the subsequent reports never result in anything meaningful. However, I do feel that you should track anything that allows you to make consequential adjustments to how you work, as long as the tracking and reporting remains manageable.
Current book – Total annualized revenue in your book and how it compares to where you were last year. I will guess that this is the only critical indicator that every producer reading this will already know.
Why? – Well, as a producer, this is the ultimate scorecard. It determines how much you get paid, how many resources you deserve, and documents (over time) how consistent and effective you are as a producer.
Retention – Don’t fool yourself with the increase in your book that came from additional revenue resulting from increased premiums. Measure your retention two ways: first, on the percentage of groups you were able to keep and secondly, as the percentage of revenue retained.
Why? – Just comparing revenue numbers won’t tell the whole story. Additional revenue from increased premiums may mask issues that need to be addressed. In other words, you may not focus on the 10 small accounts you lost for reasons that may lead to the loss of larger accounts this coming year.
Once you identify the lost business, be brutally honest with yourself as to why they were lost and learn what you can do to keep it from happening again.
Closing ratio – Measure your close ratio at the point you specifically give the prospect a chance to say yes or no. If you’re still competing with spreadsheets, measure your close ratio as the percentage of spreadsheets delivered that produce new clients. If you are competing by bringing an improvement plan, measure your close ratio as the percentage of plans presented that result in new clients.
Why? – New opportunities are too difficult to come by. Poor close ratios exponentially increase the work you have to do to refill your pipeline. Have the courage to go back to those lost opportunities and ask for honest feedback as to why you lost.
Conversion ratio – This refers to the percentage of prospects that move from one step of your sales process to the next. For example, in our process, producers use a 3 step process (Step 1 – Executive Briefing, Step 2 – Organizational Assessment, Step 3 – Improvement Plan delivery). The conversation ratios are the percentage of prospects that move from Executive briefing to Organizational Assessment and then again the percentage of prospects who move from Organizational Assessment to Improvement Plan delivery.
Why? – Tracking your conversion ratio is the only opportunity you have to learn where the weak spots are in your sales process. Just like I recommend in the close ratio, have the courage to go back and ask for honest feedback on those opportunities you don’t convert.
Revenue per relationship – This is the total amount of revenue in your book of business divided by the total number of clients in your book.
Why? – This is the single biggest predictor of your ability to continue to grow your book of business. If your revenue per relationship doesn’t grow year over year, your total book growth will be slowed or even stopped. You can only effectively service a set number of accounts. The higher the revenue per relationship, the more money you make.
It is up to each of you as individual producers to self-manage your way to personal success. And, as the old saying goes, you can’t manage what you don’t measure. Unfortunately, all the measuring and all the managing in the world won’t mean anything if you aren’t willing to make the behavioral changes necessary to move the numbers.
Photo by Aunt Owwee.