How to Develop Full Time Clients for More Agency Revenue

I have a few questions to ask you. How many part-time clients does your insurance agency currently have, and how much time and money is that currently costing you? On today's Agent Leader podcast, I'm going to dive into Good Results trap number four, which is around this concept of part-time clients. You don't want to miss this episode, Enjoy.

Welcome to the Agent Leader podcast. My name is Brent Kelly, I am your host, and yes, this is the place for insurance agency leaders that's you to learn, to grow, to develop and ultimately aspire to become your Best Version Possible. Everything that we talk about on this podcast and certainly within my role and our team's role at the Sitkins Group is to help agencies become that Best Version Possible. By the way, the book Best Version Possible co-authored by Roger Sitkins is available. You can get that in paperback, or if you like to listen to books, you can do that as well.

So it's on Amazon Audible or go directly to our website. You'll get a free bonus. You go to Sitkins.com/bvp. So this podcast episode is part of a seven part series that I've been doing. I've been going through agency traps. In fact, we've been talking about these as the good results traps, that there are traps that agencies often find themselves in or they don't even realize they're in. Why? Well, because they're getting pretty good results, which by the way is a good thing. We love that agencies get good results, but we also know that there's a Best Version Possible of your insurance agency waiting for you to arrive. And so what I want to do in this series and I've been doing in this series is highlighting one of these seven traps in each episode, giving it some depth, giving it some color. And by the way, you may find that one of these traps really jumps out at you more than another that's very common.

Or maybe they all hit you in different ways. By the way, huge opportunity for you as an insurance agency leader. Reminder, there is no cost and there is no obligation. If you've been listening to other episodes in this series, we are offering for agencies that really aspire, that truly aspire to become a Best Version Possible. We're offering a Best Version Possible assessment and a Best Version Possible plan for your agency. Again, no charge, no obligation. The only thing that we're going to ask is that your leaders are present and you're committed to leaning into this conversation. From there, you can make any decision you want, but we want to provide as much value as humanly possible for you and your agency to take that next step in your journey. And as I go through these traps, again, you may find one or two of these that go, oh, this is something I'd like to learn more about.

That's exactly why that assessment is taking place. It's why we're delivering the plan to give you tangible solutions to move forward in your agency. It starts by going to this website, Sitkins.com/bookacall. Can't make it any more simple than that. Sitkins.com/bookacall, you'll have a qualification call just to get to know you at a very high level. From there, we'll set up an assessment that makes sense to do so. Most times it does. We'll then deliver a plan, and then from there you can make a decision on how you want to move forward in your agency, whether it's with Sitkins, without Sitkins, or maybe you take the plan and go, I don't want to do anything, but we want to provide you as much opportunity as possible. So go to sit Sitkins.com/bookacall. Alright, let's get into the content for today.

And this is going to be part four or trap number four of this series. And today we're going to be talking about part-Time clients or the Good Results Trap or Deadly Trap of having Part-Time clients or too many part-Time clients in your insurance agency. Now, quick review of how we got here. Trap number one, I talked about there's no strategic or financial model, or at least a lack of a clear strategic or financial model. Trap two, I talked about ineffective or there's no unique selling proposition. There's no true set offense that's named and repeatable Trap number three is that our agencies often have too many part-time producers, which leads me to today, which have agencies that have too many part-time clients. Now, again, I don't know your agency. I don't know the specific scope until we have a conversation, but I will tell you overall, when we run reports and we look at agencies and have initial conversations, we typically see that agencies have a number of part-time clients.

Now, I'm going to break this down. What does that mean? Because oftentimes you think of part-time clients, the first thing you think about is we need to round out our clients. That's absolutely true. In fact, it's one of the easiest things that agencies can do. And when I say easy, easy to understand, not always easy to execute. Why? Well, because you got to grow through the data and you got to grow through your book. There's got to be a plan. And then guess what? We actually have to do something about it. But I want to talk about part-time clients in different ways today. In fact, I'm going to ask you a question. Obviously this is a monologue, so you're not going to be able to answer back, but I want you to think about this for a second and then I'll give you the answer.

What do you think as an agency leader is one of the greatest indicators, if not the greatest indicator of the size of a book of business? Now, this is true for the agency's book of business. This could be true for a department, whether it's commercial lines or benefits or personal lines or small commercial or financial. This could be true for an individual producer, but what do you think is the greatest indicator of the size of a book of business? Now, just think about that. What's going through your mind right now? Well, here's the answer that we see time in and time out. It's the revenue per relationship. It's the size of the revenue per relationship or revenue per account, however you want to define that. Oftentimes people will think about, well, the greatest size is probably how many clients we have. Or maybe it's how many resources or tools the agency have, or maybe it's how many years you've been in business.

Those are all things that factor in, but it's the average revenue per relationship, which critical. And of course, eliminating or moving away from part-time clients to full-time clients is a great way to begin to grow the revenue per relationship. And again, many agencies as an example, and maybe yours, they'll say, well, I know that. I know that. I know we need to have full-time clients, clients that we work with in all lines of business. And by the way, when I say full-time clients, certainly, I mean we and are we writing all lines of business within a specific department? It could be write the general liability, why don't write the comp, or it could certainly be, and we talk about having four seats around the table. So imagine your client is at the table or you're sitting around the table with your client, and we've got our employee benefits, we have our property and casualty, our commercial lines, we have our personal lines, we have our life and financial, we have all the seats around the table.

And there's so many factors to this, and one of those certainly is revenue per relationship. One of the issues that we see with agencies and part-time clients is a big reason why, and this happens all the time, is that agencies run into the 2-2 syndrome, the 2-2 syndrome, and you think, oh, 2-2, and we're in a tutu. The 2-2 syndrome is that we have too many clients that are paying us too little money. We have too many clients that are paying us too little money. And there's a lot of factors with that. Why agencies run into the tutu syndrome. And guess what happens when you have the tutu syndrome is you plateau, you get stagnant, you get frustrated. People feel overworked, they're tired. You're not making as much of an impact as you'd like to because it's very transactional. All these things can happen in agencies with the two syndrome, but there are lots of factors.

A few, I wrote down in my notes here of why we see agencies struggle with this. Well, maybe it's the business model itself that any account in every account, it's a good account. We will write piece of business for any person, any business, anywhere, any time, any how, right? It doesn't matter as long. If it's money in the door, we'll ride it. Obviously that creates a tutu syndrome problem. Maybe we've never identified our ideal client. Now, that may sound simple again, but I will tell you in having initial conversations with people, whether I'm out speaking or on the road or working with agencies and we're having some initial calls, and if I ask them, what is your ideal client? Now, of course this can vary by producer or department certainly, but if I ask a certain department or an area of the agency and I say, what's the ideal client?

Right? There isn't a clear answer and we don't qualify because of that, we don't qualify, which again runs into this problem of tutu. What are some other factors? Well, the tutu syndrome is because we have producers that are caught or hiding in the service trap that they're doing service work all the time and not going out and riding the right type of business. And what happens is the urgent supersedes the important, and here's another reason we have a tutu syndrome, is that oftentimes agencies and in particular producers are not willing to let go, right? They're never willing to give up some of the lower tier accounts to maybe a service. It could be a select business unit, could be a number of things, but they want to hold on to every single client they've ever written in their entire career and go, I wrote that account 18 years ago or eight years ago, or four years ago even.

You did, but is that still right for your model today? So again, these are all factors that could potentially lead to part of this 2-2 syndrome. Too many clients paying you too little money. But I want to focus now on this idea of moving from part-time clients, which again, this is a good results trap because can you have part-time clients in your agency, even many part-time clients in your agency and still get good results? The answer is yes. You can have a number of part-time clients. We haven't rounded them out. We're not making sure they're across all departments in our agency. Can we still get good results? Yes, but what does this cost you? What ultimately does this cost you if we don't have full-time clients? By the way, this is a mindset that our agency, we talk about this with all of our agency members through our programs and our coaching, the mindset is full-time clients only.

If we're going to write a piece of business, our goal going into this account is that we're going to be their complete provider. Now, let me just take one second because some of you go, well, that's not possible in every situation. Agreed. There are certain times if there's a large account and they say, listen, we definitely want you to come in and look at the commercial lines, for example, but I want you to know right now that we've had our benefits provider for years and years. It's a great relationship. We have no interest right now in moving that relationship, but we definitely want you to come in and take a look at the p and c or the commercial lines, should you say, Nope. Obviously that's your discretion. But here's what I want to say. What happens in this area as well as many other areas and agencies is that we allow the exception to become our rule.

In fact, if you're not driving, write that down. Are we allowing the exception in our agencies to become a rule? Well, because it happened once or twice, it means that, well, that should be what we always do, or it just becomes part of what is normal in our agency. No, this goes back to strategic model, our strategic plan and models that our goal in this case, if you're following the Best Version Possible plan, is that we have full-time clients only understanding that they're, yes, life isn't perfect. There will be exceptions, but what is our model? What is normal in our agency? It's really important that I wanted to share that. Alright, so why does this matter? Why does full-time clients matter so much? Well, I'm going to start with what I already mentioned. I got ahead of myself, but higher revenue per relationship, if we have full-time clients, as simple as it is, and by the way, we've had agency members, it's some really interesting numbers.

One of our agency members from the wWest Cest coast, that was their entire focus for a 90 day period. In fact, one of our things that we do in our programs with members is we have 90-day deep dives. We take one area, one thing and go very deep and give it laser focus in this case for 90 days is let's round out all of our clients, or at least look at our round out possibilities. Then begin to reach out and start to set up appointments to have these conversations. Remember, these are clients that already like you, they already do business with you. You know this, but it is that low hanging fruit that you hear about, right? There's gold in your book of business. We just kind of let it sit there because why? Well, it could be a number of reasons. I do want to take a moment and talk about this.

Why don't we round out accounts? Well, I think number one goes back to the good results trap because if we don't, we're still doing okay, so why worry about it? I already have part of the account. Why do I need the rest? So that could be a reason. It could be some form of complacency. That could be certainly, it could be some issue maybe around capacity. We're already so busy and our team's so busy, which by the way, I hate that word, but there it is, right? It happens that we've got so many things going on that we can't get to it. It's not our top priority or this could be a big one, especially when we're talking about rounding out across different departments. Maybe it's a confidence issue. Maybe we lack confidence in another department of our agency. Now, this is called real talk here, right?

Because part of this is, why doesn't the commercial lines refer over to the EB? Why doesn't the EB refer over to personal lines? Whatever. We could go in any different direction here in an agency. Maybe it's because I'm a really good producer or my team is really good, but I'm not so sure about this other department, and if they screw it up or there's a problem, it may come back to affect me. That's a big deal. Now, here's what I tell members in our program all the time, although there can be truth in that, and if there is, you need to have a real discussion. Hey, I have some confidence issues here. Let's talk about it. Now, whether that's resolved right away or a period of time, I don't know because every situation is different. But I will say this, the overall theme is this.

If you are unwilling to refer or round out any type of cross sell business to another department in your agency, what you are saying either indirectly or consciously or subconsciously, is what you're saying is, I trust my competitors more than I trust my own agency team. That is what is being communicated. Whether you're saying it out loud or it's deep down in your subconscious, because what you're saying is, well, if they mess it up, it's going to reflect bad on me. But what you're saying is I actually trust my competition to handle it better. Oh, I'm not saying that Brent, not directly, but there's some hidden truth behind that. So confidence is a huge issue of this, and again, my suggestion here is if that's an issue, have real conversations. Something I share on this podcast many times is this, don't allow a problem to become a crisis and eventually a problem will become a crisis.

There's a problem here. Let's talk about it. I have some issues, and by the way, sometimes these issues are resolved because we simply have misunderstandings. Oh, I thought this. I thought this. By the way, I'm going on some different tangents here. If you can't give another department a 30 second commercial or something like that to explain the value you provide to your clients, then that's a bigger issue as well. Why should we cross sell to this department? Because we do X, Y, and Z. This is the problem that we solve. This is the impact it has, and this is the result that our clients get. We absolutely want to make sure right. Now, the other part of this is pretty obvious too. Not only does it increase the revenue per relationship, we write more business, it improves retention, and maybe that should go without saying, but let's face it, the more lines of business you have, the more seats that we have around the table, the harder it is for that client to leave, right?

More lines, harder to leave. In fact, when retention, we look at the Sitkins group, Best Version Possible, we have agencies strive for a 99% effective retention. I'll say it again, 99% effective retention. Now, I do want to highlight the word effective because it's important. Effective means the clients you want to keep and the clients you can keep. Some clients go out of business, some clients get acquired, right? Some clients that you may not want to keep, maybe they're just jerks and it's time to move on, or it's just no longer a good fit, but of those clients you want to keep and can keep. This is a huge part of increasing the retention because by the way, again, this should go without saying, but back to the earlier part of the cross sell. Do you not think that a good competitor, any good competitor of yours, isn't going to do the same thing that you should be doing?

Is it at some point going to say, listen, we've got a great commercial lines department. We already have established trust this relationship. Wouldn't it make sense for us to at least have initial conversation and once that door is open, now you got to fight, so you want to keep as many doors closed as we can. So hire retention. Also, to me, this is about team selling, right? The best agencies we work with are the pleasure. Yes, they've got great individuals, they have great teams within their department, but they look at themselves as a true team and it makes a difference. And then here's another one. By cross-selling, by having these conversations, by having full-time clients, we truly live out the idea that we are about relationships, not about transactions, right? We are about relationships, not about transactions. We truly want to get to know you and understand you and your business or your family or whatever it is at a much deeper level.

Okay, so why this matters? Number one, revenue per relationship. Number two, obviously retention. Number three, this is a big one. Why does this matter? Because if we don't round out accounts, if we don't have full-time clients, we have more and more of this problem that we have too many profitable accounts in our agency that are subsidizing unprofitable accounts. And let's face it, if we're writing one line or two lines of many lines or we're not cross-selling, whether you know it or not, when you look at your book of business, there's a good chance that you have a number of unprofitable accounts in your book of business, and our profitable accounts will subsidize this. In fact, if you look at agencies, and I'm going to talk more about this in trap number six, because trap number six, I'm going to get around aspects of the 80/20 rule, but the average agency, this is incredible.

The average agency loses money on approximately 50% or more of their clients. Now, again, this varies, but if you actually look at an average agency, they lose money on 50% or sometimes more of their clients, and oftentimes people will say, well, that's just the way it is. That's the nature of the beast, or those are our bread and butter. It doesn't have to be that way, right? You get to choose your model, and a big part to solve this is to have a mindset in the process that we are going to have and write full-time clients only. Alright? I want to leave you with some questions to think about, right, because I think I've hopefully highlighted some areas that maybe go, maybe we do have some areas that we're caught in the good results trap, or this is a trap that either we know we're in a little bit or a mini trap, or maybe we just haven't even thought about it at the level that we should because there is an abundance of opportunity in different ways here of what this looks like.

So here's some questions I want you to consider and think about How many part-time clients does your book consist of today? Step one, just go through your book, by the way, at a minimum. Again, I'm going to talk more about this in trap number six, with the 80/20, if you took the top 20% of your clients, which hint hint typically gives you about 80% of your books revenue, so your top 20% are those 20% full-time clients only, and if not, why not? This is a very powerful, simple and effective exercise. Here's the second question. When you look at that book of business and you see that you do have part-time clients, you probably will, how much money and time is this costing you and your agency? How much money and time is this costing your agency? And then here's a question again that we can help you with as well.

If you go through and do the assessment that I mentioned with you, we're going to talk about this and have some questions around it, provide you some solutions, ways that you can move forward, again, go to www.sitkins.com/bookacall to get that process started. But here's my question. What is your proactive plan for your top 20% to round out and retain these relationships? Oh, by the way, here's the best part, and we're going to talk more about this, to replicate those agencies or those clients, those relationships, what is your proactive, and there's the key word, proactive plan. Too often we just think clients will just, well, eventually it'll round itself out. We have the client long enough. We know the relationship's going to be pretty good. We know that eventually we'll earn a referral from this client. Why? Wait? Be proactive. Again, your best clients want to help you.

Your best clients truly do want to help you, but we've got to be better leaders with our clients. We have to better educate because many times, and maybe this has happened to you, this happened to me back in my production career. I hate to admit it, but I know it happens to the producers. We ask them this question, how often have you ever provided an opportunity with a different line or different department with a current client that you've written maybe for a year or multiple years, and they say something like this, oh, I didn't know you guys did that.

Exactly right. It is oftentimes we just don't ask questions. We just don't lead clients proactively. So many things are right in front of you, and because of that, you're often caught in the good results trap. You don't have to do any of it, and you'll get good results, but if you truly aspire and desire to become that Best Version Possible, not because it's just about money, although that's a big part of what's going to happen when you're a Best Version Possible agency, but it's because you want to win at the highest level. You want to grow, you want to develop, you never want to settle. You're not willing to be complacent. There's a better version waiting for you, and you know that the end of your career, you're not going to look back with regrets. If that's you as an agency leader, book a call, we'd love to have a conversation, learn more about your agency, the type of person you're the type of agency we'd like to work with that I wish you all the best and your success. Look forward to trap number five, six, and seven. We're down to the final three traps in this series, and look forward to talking to you again soon. I wish you all the best in your success. Thanks so much for listening.