President & Coach, Benefits Growth Network
Kevin Trokey is a coach and an implementer of business strategies. He works with agency leadership, department managers, and producers of benefits agencies to craft strategies and lead them to successful transformations by breaking down the complexity into manageable steps.
As an industry, we have to start delivering more value. Anybody in this industry who doesn't, won't find themselves in the industry much longer.
By its purest definition, value is getting something of equivalent worth compared to what we pay. In the book "Go-Giver", the authors define the Law of Value in the following manner: your true worth is determined by how much more you give in value than you take in payment. By either of these definitions, I would argue we are not an industry that truly delivers good Value.
First of all, let me ask you a question:
How many people do you have that do any work for you that you don't know exactly how much you pay them? I'm guessing it's a very short list.
Now another question:
How many people do you work for who have no idea at all what they pay for you? If you are like most brokers, and are being honest, that list is way longer than it should be.
The reason is, in our hearts, we don't believe we aren't a good Value for our clients. If you believed you were, you would have no problem going into that $40,000 account and having an open and honest conversation about what you are getting paid and, more importantly, what you deliver in return.
If your business model is like too many, what you are doing for that $40,000 is placing the insurance and then fixing the problems that arise from those same policies. It would be hard to argue that many are truly doing $40,000 worth of work, much less delivering more than what is being received in payment.
So, it appears that if you want to be someone who is considered a good Value, you need to adjust one side of the equation or the other. I'll argue that the right answer isn't on the payment side. If you take that route, you will be setting yourself up to compete against those competitors who will always do it for less. That's a race to the no-profit zone.
The business model of the typical agency needs to be overhauled. To that point, a future blog will explain what I mean in more detail. I will tell you that it has to stop being about selling insurance and has to start focusing on how to improve the business of your clients. However, even before you start overhauling your business model, there are opportunities at every step of the current way to deliver more value than your prospects/clients are expecting.
Marketing – Look at your collective marketing efforts: brochures, website, LinkedIn profiles, blogs, etc. Do you sound like most every other agency bragging about your 112 years in business, offering a free quote, and listing the carriers you represent? Or, do you demonstrate how you truly understand the issues being faced by your clients and make it clear you can offer a solution?
Value test in Marketing – Even if the audience never engaged you in a face-to-face conversation, they should have learned something that will help them in their business as a result of your marketing efforts. Especially with your social media marketing, you should be a regular stop as they look to build their own business acumen.
Selling Process – This is a natural extension of your marketing efforts. Your selling process has to be focused on the needs (known and otherwise) of the buyer and be more of a process of education than anything else.
Value test in Selling – Someone would write a check to go through your sales process. (Don't snicker, I see it happen all the time.)
Customer Service – I know that many of you provide countless Value Added Services to your clients. You probably think that this makes you the exception to the Value deficit I have described. It doesn't. Most of your VASs never get used and therefore have zero value. Worse than that, the frustration that comes from them not being used actually hurts you.
Add value by ensuring that every VAS you offer to your client is implemented and executed as intended. If you aren't going to have a formal implementation plan, then don't even offer the VAS.
Value test in Customer Service – If asked what you do for them, your clients would state the implementation/execution of your Value Added Services ahead of quoting insurance and fixing problems.
No matter what you do, there is always an opportunity to add more Value than was expected. Be a Value Driven producer/agency and you will quickly become invaluable to your clients. You might even be able to ask for a raise.
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.
Before you read any further, I want you do a little exercise with me. No stretching or running or anything like that. However, this exercise may actually be a little more painful.
Here's what I want you to do: Pretend like you are your own prospect and research yourself. You know, Google, LinkedIn, website, the whole bit.
So, what did you learn about yourself?
Did the Virtual You give yourself a compelling reason to take a meeting?
I'm not sure I can adequately stress the importance of the Virtual You. The exercise you just went through is the same exercise your prospects will take themselves through when deciding whether or not to agree to a meeting. This same exercise will also set their expectations for any meeting they might take.
What you communicate through Virtual You, you will either tell your audience how you are different from your competition or reinforce the perception that "you are all alike". This second perception is one you can't afford to have applied to you.
I was recently having lunch with a friend who is an insurance broker. Over this particular lunch, we were catching up with one another, but also because he was looking for some advice on a hostile prospect he was meeting with the next day to talk about employee benefits.
He had met with this prospect a couple of months earlier on their P&C coverage. His first meeting had been with the owner, and everything seemed to be great (at least on the surface). The owner seemed to love him and was anxious to introduce my friend to the person in charge of all of their insurance. Turns out, she wasn't nearly as excited as the owner.
Thinking things were initially looking positive because of the owner's seemingly enthusiastic response to their meeting, my friend was more than a little surprised to be accidently cc'd on an e-mail from the owner to the benefits manager. Basically, the email said,
"I'm not sure if this guy is full of [crap] or whether or not he can/will do anything he says. What do you think?"
To which the manager responded,
"I've been doing this for 25 years and the brokers are all the same. None of them are worth a [crap], they'll tell you a bunch of lies, and then deliver nothing."
So, is that a fair stereotype of our industry? Maybe, maybe not. Unfortunately, it doesn't matter whether or not it's fair. It's an all too common perception and one you have to overcome.
If your online presence and your in-person reality don't clearly demonstrate what makes you different, you're going to be lumped in with everyone else. If you Tweet about the same topics, promote the same skills/expertise on LinkedIn, and have the same conversations as everyone else when you show up for a meeting, then don't be surprised if you are assumed to be just like everyone else. And, unfortunately, that's not necessarily favorable company to keep.