Creating Organic Growth In Your Agency


Are you an effective leader? Turn around and see if everyone—or anyone—is following you. If no one is there, you have your answer: You’re not an effective leader!

Not surprisingly, the best leaders in our CEO programs are the ones who achieve the greatest results. They’re the ones who identify the behaviors and strategies that become non-optional within their agency. Further, they demand accountability. They agree on what they’re going to do, and then they hold themselves and their team members accountable. That’s a leader!

Having said that, I believe it’s time that agency owners and producers make true organic growth a non-optional result. The reality is that the average agency is only achieving around 3% to 4% organic growth. I hope that you (as one of our readers) and your agency find this statistic to be unacceptable. Personally, I think it’s too low. However, it’s understandable for several reasons.

Low organic growth is understandable because:

  1. Insurance products have become commodities. As you’re well aware, your direct-writing competition spends billions of dollars a year “educating” (and usually misleading) consumers that insurance is all about price. Their “Click or Call for a Free Quote” invitations only reinforce this idea, as does the message that “We Can Save You Money.” It really bothers me when I see this type of message on an independent agency’s website because it encourages the mentality that places price above all else. This has a negative impact on the agency’s organic growth rate.
  2. You lack a sales process that differentiates you and your agency in your marketplace. Do you have a series of qualifying questions that you ask every prospect initially when he or she calls in, walks in, or writes you asking for information? Whether it’s a personal lines or commercial lines prospect, how do you pre-qualify this person? For example: “How did you hear about us?” and “Who are you with now, and why are you looking for another insurance agent?” and “How long have you been with your current agent?” If the prospect says he or she is just trying to save money, this is probably not the kind of client you want.
  3. The agency lacks a culture of accountability. This is true in about 95% of the agencies out there today. We all know that actions speak louder than words. But unless your team members are held accountable, they probably won’t produce at a level that results in healthy organic growth.

You don’t have to do anything I suggest in these articles, and you’ll still make pretty darn good money! However, you’re not likely to grow much, either. 

Growing organically

In a previous article (one that garnered a tremendous response), I challenged my readers to “Stop Losing Millions.” I mentioned that for every $125,000 of unrealized profit, you were losing $1 million of value. That figure was based on an EBITDA multiple of eight times, which is very conservative. Today that multiple exceeds 11 times! Consequently, an unrealized profit of $125,000 (due to low organic growth) is costing you at least $1,375,000!

Now, assuming you’re doing a great job of managing your financial model (you do have one, correct?) and your expenses are under control, then you have to generate greater profits by growing your top-line revenue. Pretty simple, right? Apparently not, based on what we’re seeing.

Most agency owners will tell you they have invested a considerable amount of time and energy in their business, which is usually the largest asset they own. Therefore, as with any investment, they should want it to appreciate and grow.

That’s why I’ve come up with a list of non-optional behaviors to help your agency grow organically. Much of what I’m about to share with you, you’ve heard before. But there’s a big difference between hearing and doing! So, if as you read this article, you catch yourself thinking, “I know, I know, I know,” but you aren’t actually doing these things, I urge you to keep reading. Remember, repetition is the mother of skill!

Non-optional behaviors that spur true organic growth

Unless you have the following things in place, you can’t expect to see robust organic growth. But if you do, you will. It’s really that simple.

A Chief Revenue Officer (CRO)/Sales Manager: This is your offensive coordinator—the person in charge of putting points on the board.

A Sales Process: Establishing and implementing a true sales process helps erase the “you insurance people are all the same” mindset. Does your agency have an actual sales process? If you and your producers aren’t eliciting a “wow” reaction from your prospects, the answer is no. You’re still guilty of practice quoting and unpaid consulting, so you’re still just like everybody else.

A Selling System: What would you or your producers say are the three P’s of your selling system? What’s the Purpose, what’s the Process, and what’s the Payoff? How clearly does your selling system explain these things to the prospect (the business owner or personal lines customer)? Do you define the process for them? This includes sharing with them exactly what you’re going to do: “We will conduct an initial discovery session and an up-front risk survey, after which we will make recommendations to you.” The payoff is that you will ensure they receive the appropriate coverages at a competitive price (not necessarily the lowest).

Pipeline Management: Our goal is for all producers to have more opportunities than time, which is why every producer should have at least a Top 20 Prospects list. But what about your agency overall? If you don’t have a Top 100 Prospects list for the total agency, you’re not a true sales organization. In fact, at the largest, growth-focused sales organizations, the individual salespeople not only know their company’s Top 100 prospects, they are expected to give detailed daily updates on their Top 5. It’s a non-option that the Top 100 leads are discussed every week at every sales meeting!

Keep in mind, this doesn’t apply just to large organizations. It applies to any agency that wants to grow, whether there are two producers or 100. You have to think big to get big!

Sales Skills Practice: Skills must be practiced until they are mastered! In sales, these skills include asking for referrals, overcoming objections and more, as we’ve discussed before. If your producers have not mastered their selling skills, why not? When is your next practice session?

Presentation Rehearsals: To demonstrate how you are different from other agents/agencies, it is critical to practice before you give an executive briefing or make a presentation of solutions and best options. Every presentation should be thoroughly rehearsed until it is conversational and comfortable. Otherwise, your lack of preparation will be obvious when you Show Up, Throw Up and Blow Up!

Having discussed this repeatedly, I’ll assume your producers and service people know that referrals are non-optional. But do they actually ask for referrals? Do they practice asking for them? If you’re not sure, just walk up to any producer or service person and say: “Ask me for a referral,” and see what they say. How do they sound? 

No New Part-Time Clients: Part-time clients are antithetical to organic growth. Therefore, it’s not an option to add even one more part-time client to your account list.

Up-front Risk Survey: You must ensure that every new client—yes, every one—receives an up-front risk survey. Unless you want to stay in the commodity business and not grow, why wouldn’t you do this? Why aren’t you already doing this?

Annual Review: Every customer must have some form of annual review conversation. This should address the status of the account, its limits and any agency recommendations.

Producer’s Perfect Schedule: This requires your producers to invest 80% of their time and energy in sales and sales-related activities. Agencies that commit to this concept typically see strong organic growth.

Every producer must attend—and be accountable for—at least one networking event per week. Afterwards they should be prepared to discuss whom they met at the event and how they followed up with them.

Pivot to Relationships: To grow organically, the agency as a whole must pivot from transactions to relationships. If you’re in the business of processing transactions all day, you are destined to be replaced. However, if you pivot from taking orders to cultivating relationships, you’re going to grow!

Formal Exit Barriers: You must have these in place to drive your effective retention to 100%. (Okay, 98% isn’t bad!) The exit barriers are: Having Full-Time Clients Only, Managing Relationships, Continuation Process (not a renewal process), and Being a Trusted Advisor.

The Bottom Line

You probably won’t implement all of the Non-Optional Behaviors I’ve outlined above. However, if you as an owner/leader are not doing most of them, you aren’t really leading, and you certainly can’t expect others to follow you. On the other hand, maybe your salespeople are doing exactly what you’re doing! In that case, you probably need to become a better role model. It’s The Better Way for your agency to achieve significant organic growth.

Roger Sitkins is the CEO of The Sitkins Group. To learn more about how to Sell More, Retain More and Earn More in your agency, visit www.sitkins.com

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