10 Rules for Agency Success


In a recent article, I discussed what I would do if I were an agency sales manager. It got a phenomenal response, prompting a huge number of questions and comments. Although producers weren’t so crazy about it, most sales managers loved it; they said it gave them a blueprint to follow. I also heard from several readers who wanted me to revisit the topic, but on another level. Their question: “What would you do if you were our CEO?”

That’s a great question! And it got me thinking about my “perfect vision” of an agency. How would I create the agency that exists in my mind and make it a reality?

If you’ve followed me at all, you know that I’m always preaching that numbers (your actual results) are the end result of the behaviors and strategies you have in place. Subsequently, the best behaviors and strategies become the “non-optionals” that drive the desired results. In effect, they become The Rules of The Game.

Over the years, I’ve compiled a list of the Top 25 Sitkins Rules of the Game for an agency’s predictable and guaranteed success. If I were your CEO, these rules would provide the foundation for all of your growth and success as an agency. Here are my Top 10:

  1. Differentiate or Die. We must have a unique selling process that differentiates us from all other competitors! I know you probably have heard this a thousand times before, but what have you done about it? Typically, when I broach this topic with owners and managers and ask them how they differentiate from other agencies, I hear the sound of crickets chirping! Seriously, it gets quiet very quickly. That’s because they’ve been winging it for years and doing very well financially. However, the best agency CEOs are tired of fighting the commoditization of our industry and are ready to change their approach.
  2. Focus on the Four R’s. As CEO, I would create an overall focus for the organization that would be memorable, acceptable to everyone, and easy to recite. Everything we do would be all about Results, Relationships, Retention and Referrals tied to a culture of accountability. So if I were the CEO, I would question my managers, teams and individuals about where and how they’re investing their time, talent and energy.

I’d want to ensure that everything we do is about getting results, not just staying busy with activities. Specifically, I’d want to know what we are doing to:

(a) proactively manage relationships;

(b) install exit barriers that will result in great retention; and

(c) create such an outstanding client experience that we earn nonstop referrals.

3. Know the 80/20 Rule. Pareto’s Principle, the 80/20 Rule, is one of the most powerful and transformational strategies ever, yet most agencies ignore it. As your CEO, I would use the 80/20 Rule to focus on the Vital Few vs. the Trivial Many clients. I would make sure that everyone on my team could identify those vital few clients, the top 20%, that generate 80% of our revenue. Please note: This isn’t a matter of treating certain clients badly. Any account that stays inside the agency deserves VIP treatment. The reality is that a high percentage of your clients should be moved to your best carriers’ service centers. More on that in future articles.

4. No Subsidizing. If I were your CEO, I would never allow profitable producers to subsidize unprofitable producers. Consequently, there would be no RIP (Retired in Place) producers. As CEO, I would require and inspire producers to invest 80% of their time in sales and sales-related activities. The only exception would be producers in training. We know you’re not going to make money on new producers for the first couple of years. However, they’d better be producing by the third year. The bottom line: It’s okay to subsidize newbies, but it’s not okay to subsidize oldbies.

5. Build Overflowing Pipelines. As it was with my role as your sales manager, my weekly—if not daily—focus as CEO would be on filling prospect pipelines to the point of having more opportunities than time. Also, rather than worry about suspects and prospects, we’d focus solely on identifying Future Ideal Clients. We would know exactly who they are, including the main contact’s name and contact information.

If I were CEO, I would actually know the Top 100 Future Ideal Clients for my agency—the ones who ultimately would be among the top 20% of my customers. Also, I would meet with my sales manager at least once each week to discuss where we stand with these Top 100. The reality is that most agencies never define their Top 100; they seem to think that every “mirror-fogger” is a viable prospect.

  1. Emphasize Relationships. Three of the R’s I mentioned previously actually hinge on Relationships. They are really what our business is all about. You may remember from previous columns that five kinds of relationships should be proactively managed: Clients, Prospects (Future Ideal Clients), Insurance Carriers, Fellow Team Members and Centers of Influence.
  2. Be Relentlessly Prepared. I firmly believe that every opportunity deserves our very best, and as CEO I would insist that every team member be relentlessly prepared to compete at the highest level. For instance, if a personal lines risk manager is going to do an annual review with a client, he or she had better be prepared for it. The same goes for the people who must deal with tough claims, loss control situations or other insurance-related issues. If I were CEO, I would require ongoing low-risk practice to ensure that each employee is prepared for every meeting, every question and any contingency that might arise.

I frequently refer to business guru and speaker Dan Sullivan, who often talks about the concept of “front stage” and “back stage.” Front stage is what goes on in front of the curtain; it’s everything the client or prospect sees. Backstage is everything behind the scenes that supports what’s happening in front of the curtain. As your CEO, I’d insist on spending a significant amount of time staging and thoroughly practicing what’s in front of the curtain. This applies to anything that can be seen, heard or felt by a center of influence, prospect or client, even something as simple as answering the phone. You can never over-rehearse anything that could affect the agency’s brand.

  1. Establish The Client Experience. There’s a lot of talk about The Client Experience, but few agencies ever do much about it. Before it can be implemented, The Client Experience must be clearly and explicitly defined. It should answer the question: “How do your clients feel after they’ve dealt with you?” As CEO, I would define every aspect of The Client Experience, from how the phone is answered, to how our email looks, to what you provide to clients, and how they respond to what you do with and for them. I would also have a written policy on how we treat our clients. (Employees of the Ritz-Carlton, for example, carry an actual card that defines how they are expected to interact with guests. There’s even a sign above the employee entrance that reads “Ladies and Gentlemen Serving Ladies and Gentlemen.”)

Of course, slogans and written policies are meaningless unless they are embraced and implemented by the entire organization. If I were CEO, I would make sure that everyone adhered to our agency’s Client Experience, which would be so phenomenal that we’d have 100% retention! In fact, our clients would become such raving fans that we’d generate constant referrals and introductions. What’s more, we’d never have to worry about renewing an account, because we’d have a culture of cultivating and continuing relationships. The Client Experience is a topic I would constantly promote to my team.

  1. Be a Learning Organization. Can you imagine a sports team that didn’t constantly work to improve its performance? It wouldn’t be much of a competitor, would it? The same is true of the insurance business. Everyone in the organization should be improving every year, if not every quarter.

In leading the agency, I would provide ongoing training and opportunities for development to all of our team members. This would involve much more than just attending a mandatory continuing education course during the year. If I were CEO, we would be a learning organization, constantly striving to improve collectively and get better at our jobs individually. I would also hold everyone accountable for what they’ve learned and how they’ve implemented it.

As CEO, I’d make it very clear that we train to win!

  1. Focus on the Four C’s. Ideally, everything we do should benefit the lives of others. As CEO, I would constantly sharpen my focus on making a positive impact on our Four C’s: Our Clients, Colleagues, Community and Carriers. (We discussed The Client Experience above).

When it comes to colleagues, I’d want to provide a great work environment with substantial opportunities for both career and financial advancement.

I’d also want a successful business that gives back to others and benefits the entire community, be it close to home or far away.

Finally, let’s not forget the carriers. What are you doing to create the best possible brand with your best carriers? During my latest mission trip to Nicaragua, one of the other volunteers was a regional vice president for a major insurance carrier. Because it’s really hard for me to take off my coach’s cap, I asked her what she thought about the agency distribution system. Among other questions, I wanted to know what her best agencies do exceedingly well. When I asked her, “What percentage of your underwriting decision is based on the name of the agency and agent?” she didn’t even blink. She immediately replied, “A little more than 50%.” (I hope you remember our discussions on always having a Top of the Stack Submission.)

If I were your CEO, I would preach all these principles nonstop, so they would become the foundation for your agency’s culture.

Even though you’ve probably heard these 10 guidelines before, are you doing them? Or, if you think 10 is too many, at least pick three and actually do them. Ultimately, it comes down to selling more, retaining more and earning more. What are you doing—or what will you do—to achieve these goals?

Roger Sitkins, CEO of Sitkins Group, Inc., is the nation's number-one “Agency Results Coach." He established The Sitkins Network™, a territorial exclusive network of high-performing agencies, and The Better Way Agency, a web-based training program that shows agency owners ways to make significant improvements in all areas of the agency. To learn more, please visit www.sitkins.com.

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