Crafting the Perfect Sales Pipeline

Sales pipeline on target for producers


In training more than 4,000 producers in our programs, I’ve recognized a highly predictable “producer’s improvement cycle.” Although I’ve mentioned this topic in previous articles, I believe it merits deeper discussion.

To summarize: The cycle starts with an improvement in the conversion rate and then the closing ratio, followed by revenue per sale and finally the quantity and quality of “at-bats.” Let’s take a closer look at each of these areas of improvement.

  • Conversion Rate. This is the percentage of first appointments that lead to a second appointment. The first appointment on a mid-sized to large commercial account should occur on the six-month anniversary of the account. The goal of this meeting is to tell a story of differentiation that creates some “wows”—and some pain issues—with the prospect. Their response will tell you that you’ve brought up ways to improve their overall risk management plan that other agencies have never mentioned. Ultimately, this is a super-qualifying appointment, which includes an agreement on the rules of the game (i.e., what is required for you to do business together).
  • Closing Ratio. This is the second improvement that happens; it’s the percentage of presentations (not proposals and not quotes) that actually become new clients.
  • Revenue per Sale. This is a Key Performance Indicator for you as a producer. The size of your book and the size of your personal income will always come back to the size of your average account. As I’ve discussed countless times, you can’t be a million-dollar producer writing $1,000 accounts! Producers should have both Targeted Account Size (TAS) and Minimum Account Size (MAS). How do you establish these values? TAS is your current “A” account, which is the average of the top 5% of your clients. MAS is your current “B” account, which is average of the middle 15% of your clients.
  • Quantity and Quality of At-Bats. If you have a great conversation rate (at least 50%) and a great closing ratio (at least 50%, although 75% should be the target), the only thing you have left to worry about is the quantity and quality of your at-bats.

Now that you know what improvements must be made, how will you accomplish them?

Crafting the perfect pipeline

Step 1. The first thing you’ll need to do is identify your Future Ideal Client. Remember, you don’t want suspects or prospects, only Future Ideal Clients. This is the kind of client people often refer to as “our person”; it’s whom you’re going after.

I always ask producers: “You’re going to replicate something; what do you want it to be?” Most if not all will say: “My best customers.” Therefore, the first step in identifying your Future Ideal Client should be to look at the common characteristics of your current best relationships. What qualities and characteristics would you like to replicate? For example, what are you looking for in terms of account size, industry, ownership (private or public), and attitude toward risk management?

The first step in identifying your Future Ideal Client should be to take a look at the common characteristics of your current best relationships. What qualities and characteristics would you like to replicate?

This is part of The Ultimate Marketing Strategy, which is to Round Out, Retain and Replicate your A and B clients, while also having profitable strategies for your C clients.

Step 2. Next you need to identify your agency or producer specialties. Everyone has some, but few recognize them. The easiest way to identify your specialties is to do a book of business survey. Just make a list of the kinds of accounts you write and look for multiple accounts in a specific category or class of business. Also, talk to your insurance carriers about the classes of business they really want. Collaborate with them, as a true business partner would.

Now that you’ve completed much of the foundational work, it’s time to list the actual names of the individuals or companies you want to pursue. We’ve found that the best producers have what we call a 40-30-30 pipeline. The first 40% of the pipeline contains accounts that match up with a producer’s or agency’s number one specialty, with 30% in their second specialty. The remaining 30% would be categorized as “general practice” accounts.

As I’ve often noted, specialists always make more money than general practitioners. On the other hand, I realize that you’re going to have some good general practice types of leads, based on your relationships and activities in the community. Just make sure they’re well above your MAS.

Step 3. Now we’re going to take these lists of Future Ideal Clients and match them against the LinkedIn profiles of your current A and B clients and centers of influence. Their profiles will reveal with whom they’re already connected. I’ll admit it requires some effort, but I promise it’s well worth it. You’ll be amazed at the number of existing connections available to you that you didn’t realize you had! But don’t take my word for it. Try it and you’ll see that many of your current professional connections already know the people who top your list of Future Ideal Clients.

These lists need to be with you and your producers at all times, whether on your smartphone or tablet, or even a laminated sheet of paper in a folder. That way you’ll always remember the individual clients you’re targeting. Also, when you meet with a client or center of influence, you should have a separate list based on their connections that you want to meet. Mention that you noticed the connection(s) on their LinkedIn profile and that you’d like to know more about them. Then ask for a referral. It’s really that simple.

After that, it’s critically important to practice, practice, practice until the words come naturally.

The bottom line

During a recent coaching call with a member of The Sitkins Network, I was discussing pipeline development with the agency’s sales leader. I asked him, “What’s in your producers’ pipelines?” He replied, “I’m pretty sure they’re doing a great job and have been pursuing only Future Ideal Clients.”

I had to remind him about the concept of Knowing versus Guessing. It was pretty obvious that he was guessing because they’ve been successful for a long time. Once I reminded him, he had that Blinding Flash of the Obvious: What gets inspected is respected, and what gets measured gets done! In that moment he decided he was going to have a discussion with the producers at the next sales meeting.

Today’s technology and tools give producers such an unfair advantage—but only if they use them. Those who do, find that high-tech tools provide the most efficient, cost-effective way to reach their marketplace and fill their pipelines with Future Ideal Clients.

It’s the agency’s responsibility to provide the tools, but it’s the producer’s responsibility to provide the behaviors. If they’ll just invest the time to learn the digital ropes, I promise you their efforts will pay off handsomely.

If you’re a producer or a sales leader, my question to you is: “What’s in Your Pipeline?” For the best agencies and producers, it all comes down to the quantity and quality of at-bats. And that has a tremendous bearing on Selling More, Retaining More and Earning More.

As always, it’s your choice.

The author

Roger Sitkins is the CEO of Sitkins Group, Inc. After over 40 years he has truly become an icon in the insurance industry having trained and mentored thousands of insurance professionals.

Roger was inducted into the Michigan Insurance Hall of Fame in 2017 and in that same year also received the Dr. Henry C. Martin Award from Rough Notes magazine. Roger is among only six people to have the honor of receiving this prestigious award.

Recognized as the nation’s top insurance agency results coach and renowned leader for improvement, he believes that if you improve the life of one person, you improve the world. To learn more, visit www.sitkins.com.

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