Most agents are “doers.” They sell insurance and interact with clients to keep them satisfied. Far fewer agents are “managers” who understand the ramifications of their actions and track their successes and failures to learn from the past, avoid pitfalls that block progress and repeat the steps that prove valuable in the achievement of their goals.
How much do you know about your agency and about your book of business? Is it important to know specifically how much business your agency writes and how much is retained in each of the divisions of the agency (typically personal lines and commercial lines)?
Most of us would say that these statistics are meaningful and important. But few of us actually know those statistics on a day-by-day basis. We think that because we think we can access that data, it is sufficient.
But if you were to get into your car and drive – without direction and a plan, simply knowing that your destination was 1,000 miles away, what would happen? You could certainly say that you were motivated to reach your goal and you would spend the time and effort to accelerate the vehicle for the time needed to make the trip. But unless you actually stopped and referred to a map to determine where you had gone; unless you understood the need to re-fuel and refresh every so often, you would quickly become lost and run out of gas and energy before achieving your goal.
A better plan is to pre-plan your route including pit stops for fuel and food. That way, you could monitor your results as you drove and make adjustments, as needed, to reach your goal refreshed and on time.
Similarly, “managing” your agency differs from simply selling insurance whenever possible and processing customer requests and transactions. The critical issues in your agency are how much (commission dollars) and how many (customers and policies) are being written as new business as your trip (your year) progresses, how much commission and how many customers are being retained or lost during the process, and whether the results will allow you to reach your GOAL (the destination for the agency for the year).
How would you know where you are going in your road trip if you didn’t even have a goal? Would you consider going on a driving vacation with no target planned? How would you know if you have reached your goal if you don’t even have one?
Using this analogy, have you identified the New Business and Retention (commissions and customers) GOALS of the agency for the year? Suggesting that it is impossible to tell how many new clients you will write or how many will leave you and that your goal is to write “as much new commission and as many new customers as you can” is a ‘cop out.’ We know that you would never consider stopping writing new business simply because you reach your target. That certainly doesn’t imply that you shouldn’t HAVE a target, does it? A target, whether the goal of your vacation ‘road trip’ or the goal for new business and retention in your agency, defines your expectation and the position that would define “success” for you. In your vacation, the target is your destination. In your agency, the target is the level of combined New Business generation and Retention that would allow you the compensation and profit needed to support your personal needs and your business needs.
One troubling situation we encounter with agents all over the country is their reluctance to Plan and monitor the plan because they work as hard as they can and they don’t want to find out that they are not achieving their goals for as long as possible. Not achieving goals depresses the agency owners. But they inherently know that they are not ‘making the numbers.’ The owners choose to blindly ‘accelerate’ and continue the trip rather than analyzing what is happening and making adjustments to increase the chances that they reach their goals for the year.
No, it is NOT ‘comfortable’ to review the numbers and find them wanting. But if you don’t analyze your results vs. your expectations and goals on a regular basis during your ‘road trip’ you will a) eventually run out of gas at the least opportune moment, and b) never reach your goal in the time allotted for the trip.
What do you need to do to avoid “empty” in your agency ‘road trip’ this year?
1. SET A PLAN WITH OBJECTIVES FOR THE CRITICAL ITEMS OF NEW BUSINESS COMMISSION AND CLIENTS AND RETENTION OF COMMISSION AND CLIENTS.
This is similar to setting your destination in the ‘road trip’ each year. The components of the Agency Plan is the combination of NB and Retention just as the components of the road trip is following the map’s guidance and making sure you have enough fuel in yourself and in your vehicle to reach your goals.
2. CREATE ACTION PLANS THAT YOUR EXPERIENCE TELLS YOU WOULD LIKELY ACHIEVE THE DESIRED RESULTS FOR NEW BUSINESS AND RETENTION.
Every road trip is marked by way-points and expectation of average speed and time you will travel daily. In your agency, simply telling your staff to work harder is insufficient to assure that they reach the way-points that define interim success on your annual journey. Action Plans define the “How To” of generating NB and retaining clients.
3. BENCHMARK YOUR RESULTS ON A MONTHLY BASIS AND MONITOR THOSE RESULTS AGAINST THE PLAN TO SEE IF YOU ARE ACHIEVING EACH ACTION PLAN AND REACHING THE BENCHMARK POINTS ON YOUR ANNUAL ‘ROAD TRIP’
If you don’t look at how far you’ve gone until you either reach your destination or run out of gas you will likely not have a wonderful trip. Similarly, if you don’t look at the progress of your NB plan and your Retention plan until the end of the year, you give yourself no opportunity to make adjustments and you never know whether to pat yourself and your staff on the backs for a job well done or understand that you are not achieving your expectations. All you know on a day-by-day basis is that you are coming to work, answering the phone and doing what the customers expect of you. In other words, you are the agency’s “driver” but not its manager.
4. MAKE QUARTERLY ADJUSTMENTS TO YOUR ACTION PLANS AND TO YOUR GOALS TO ASSURE YOURSELF THAT YOU GIVE YOURSELF THE BEST CHANCE OF REACHING YOUR DESIRED ‘DESTINATION’ OR, IF YOU CAN PREDICT THAT YOU WON’T REACH THE DESIRED GOAL, AT LEAST CHANGE THE OBJECTIVE TO ONE THAT WILL BE ACHIEVED THROUGH YOUR CONTINUED EFFORTS BY THE END OF THE YEAR.
If your goal is to get from New York to San Francisco but your progress monitoring indicates that you will only reach Kansas City by the end of the year, what good is leaving the goal at San Francisco?
Either make the minor adjustment of increasing your speed (changing the Action Plans) to reach the desired goal or, if you have no other ideas for moving your agency faster, change your goal to Kansas City and identify what you will be able to do (with the revenue that you will eventually generate in total) once you get there. Will you be able to make a profit? Will you be able to pay yourself what you had planned? Will you need to ‘lighten the load’ or will you have to live on less income?
The implication of asking and answering these questions defines whether you are just the driver or are managing your agency as well as motivating it forward.