Three Reasons Why Practice Quoting Is Stupid



Insurance agency leaders, insurance professionals, insurance producers. Today on the Agent Leader Podcast, I'm going to ask you to stop doing one thing. Are you ready for it? You know what it is?

Stop practice quoting. Hi, my name is Brent Kelly. I'm the host of the Agent Leader podcast. Thanks for joining me today. And that will be the topic of today's podcast episode. Moving Away, getting past the idea that our role, our responsibility as an insurance agent or producer is to quote insurance. In fact, I'm going to share with you three specific reasons why quoting is stupid. That's what I said, practice quoting, practice quoting is stupid. It's wasting time, it's wasting energy, it's costing your agency money. And in fact, this concept goes back a very long way with the Sitkins Group. Our founder, our CEO Roger Sitkins, has been talking about this idea of No Practice Quoting for years and years. In fact, many of our attendees and those that are attending our programs today, if they've attended a program years ago or have a conversation, they go, I remember years ago, Roger Sitkins would come out and he had a No Practice Quoting hat, or it was a No Practice Quoting shirt.

And we talk about No Practice Quoting. In fact, we have, and if you're watching this, you can see our poster of No Practice Quoting. For those of you that can't see it, imagine the Ghost Busters logo, but instead of a ghost in the middle with a line through and it says practice quoting. So we're going to talk about that today. And by the way, as a giveaway, as a resource for you and your agency, if you go to sitkins.com/npq, So NPQ stands for No Practice Quoting. Go to sitkins.com/npq. You can get your download of this poster. Get to print as many as you want, put them up all over your office. In fact, this has become a visual reminder for many of our agency members, people that go through our ProducerFit program, our account manager program, our Coach the Coach program, that this is a bad idea and it's just a great reminder of "am I falling into this trap of practice quoting?".

So again, that's a free resource for you and your team. Go check it out. So what I want to do, first of all, is I want to go a bit deeper. I'm going to read what we have on this poster. I know you can't see it in the video, and if you're listening, you certainly can't see it. But it does give an overview of what I want to talk about today. In particular, three reasons why Practice Quoting is stupid, just a bad idea, right? So let me talk about what is practice quoting, because I think we need to start off by defining it. And what we have on this poster, which again, you can get a free download, says this, " the art of providing a quotation to an unqualified prospect in order to force the incumbent agency to lower their renewal price while retaining the account. Practice quoting guarantees everyone from incumbent agency to quoting agency to insurance company will lose money on the transaction."

And it continues on. It says, as an industry, we must eliminate practice quoting. Super qualification of prospects is a must. If you cannot reach an upfront agreement and establish rules of the game with your prospect, which means what will it take upfront for us to do business together, then don't waste your time, money, or energy practice quoting. Now, before I get into the three things, these are all going to overlap to a degree. It starts off and on that poster, it talks about establishing rules of the game, rules of the game. What rules are we playing by? As many of you know, if you listen to this podcast, not only am I the president of the Sitkins Group and I lead agencies and we run programs and do coaching and speaking, but most importantly, I'm a father of five kids. And I'll tell you, in playing games with kids again, just in life with children, you learn a lot.

There's overlap between life and business, certainly with kids. I don't know if you have ever dealt with this with your own kids or grandkids or nieces or nephews or whatever, neighborhood kids. But if you play game with kids, especially younger kids, they will find ways to manipulate the game. The rules will change. And by the way, if you don't have rules, and I think it's the bigger point, right? You just go out and start playing something, they will begin to make up the rules as you go along. Well, no, what actually we're going to do in this game, dad, is you can't do this and I can only do this, or you can't cross this line and I have to go here. And I'm like, where did that come from? And by the way, it's really hard to win a game when there aren't rules established upfront or you quite frankly don't want to play by those rules.

You realize that it's set up as a way that you really can't win. Or even if you do win, it doesn't satisfy much. So the big part of this, again, my analogy here is that just like kids, oftentimes we'll see with insurance prospects and clients in particular prospects as we're moving through this, that if we don't establish rules of the game, how we're going to do things, why we do things in the approach, we take it again, we know there's some give and take with this. These are real conversations. But if we don't know, if we just show up and start playing, what will typically happen is we'll fall into some really bad habits or traps, one of those being practice quoting. And even if we win or we think we win, we're not really winning. We're still falling behind. So setting rules of the game, first of all, is so important.

So I hope you as an agency, as a professional, as a producer, ask yourself, what rules am I willing to play by? What rules am I willing to play by? And one of the things that we work with our agency members and through our ProducerFit program in particular is beginning to establish rules of the game upfront. So I want to set that up as we get into the no practice quoting, and I'm going to hit three areas, and I could go really deep in all three of these areas, but for the sake of the podcast and keeping this short and sweet and giving you some value that you can take away right away, I'm going to keep this to where I think it's simple and understandable for anybody listening to this. And by the way, this is something, certainly as a sales leader, you can transfer to your producer, share this podcast and go, "Hey, listen dude, does this ever happen to you?"

Do you ever fall into some of these three traps or areas that get you to be a practice quoter, which again, doesn't do anything but lower the price and make it harder for you to win the game. And even when you do win, you typically long-term don't really win, right? So let me get into this. Number one is this, and this is more of a mindset issue, although it certainly also involves the approach and the process that you take people through. But number one is this, you are a professional, not a robot. You are a professional, not a robot. And for some of you, if you're an established producer, you're established professional in the game, you're going to go, well, of course I am. But I will tell you, for newer producers in particular, or those that may be struggling having a difficult year, and that happens, or maybe you have been doing this for a while and you've taken it for granted, we sometimes forget that we are truly a professional.

We need to think and act like a professional. Now, you can put this in context. You think about other professionals, and by the way, I think there's a lot of industries, most industries have professionals, people that really understand the craft and the skill, and they've their acumen, whatever it is. And oftentimes you think of professionals, we typically probably go to what finance or maybe accounting or attorneys or healthcare, those kind of things, those are professionals. And when you go to a professional, you don't dictate the terms. And it's not that we don't have a conversation, it's the fact that they think and act like a professional. They have a higher standard. So for you as a professional, as a professional agent, professional agency, what is your standard, right? If your standard is the fact that you follow a process that looks like many other insurance agencies, and we're going to talk more about that in a few minutes, but your process is look, copy, quote, pray.

Let me walk you through this process. When you walk in or you have an initial conversation and it ends up something like this, "let me look at your policies, let me copy what you have, maybe check a few gaps, and then I'll go get quotes for all my carriers, and then I'll pray that you don't take this back to your incumbent agent." That's the process for many agencies and agents is look, copy, quote, and pray. An underlying level of that. What it really means is, I'm just so happy to be here and so thankful that I have the opportunity to look at your policies and give you a quote and just have a chance at this. That is not a professional mindset. I often have to share with producers in particular, certainly newer producers, is that what you do and the things that you establish, the relationships you build, the risk and benefits advice that you provide is a really big deal.

Don't take it for granted. And I don't mean to have a big ego or be conceited or be arrogant, that's not what I'm talking about. I'm talking about the fact that as a professional, you've earned the right to be in that room and have professional grade conversations. And if you deem yourself as a professional, you'll find very quickly that practice quoting and the process that I just shared is not a very good or successful idea. It's not a way that you want to go. So number one, and again, this is ask yourself and your team. Do we act and sound like professionals? Do we ask professional type of questions? Do we have a professional character? Do we have professional standards? Again, there's a lot that we could get into that, but just from an overall standpoint, ask yourself and your team, do we act and sound like professionals?

Are we professional? Are we a robot? Robots, just give quotes. And one more thing on this. We all know with technology that robots technology can give quotes faster than you can anyway. And there are a lot of agencies or large agencies or carriers certainly directs that can do this really efficiently in their model. But for most independent insurance agencies, it is not a good model unless that's exactly how you're set up. But most agencies are not, and they're trying to play a game, quite frankly that they can't win and they devalue themselves as a professional in the process. Number two. Number two, why practice quoting is stupid is that I'm going to categorize this in a phrase that we share all the time. So number two is this, prescription without proper diagnosis is malpractice. Prescription without proper diagnosis is malpractice. Now, this is a medical term.

You may have heard it before, it may sound familiar. And we think about it from a medical environment is that if you were to go into a medical professional and they would just give you a prescription without any diagnosis. Now by the way, I have you open a can of worms here. That's probably changed a little bit in the healthcare system, but in hopefully the good healthcare system, if you would just give a prescription without any diagnosis, they would never ask any questions. They'd never, never look at anything. They wouldn't look at any charts. They wouldn't examine you by any means. They would just say, oh, kind of seems like you have this. So you should take this prescription without proper diagnosis is malpractice. And that's where bad things begin to happen. Now, again, these coincide with being a professional, but as a professional, you need to be the line underwriter.

So practice quoting, eliminates or certainly greatly reduces your effectiveness as a frontline underwriter, as a risk or benefits analyzer. What you're trying to do, in fact, one of the first things we tell producers to look at an initial conversation is, "Hey, the purpose of this first meeting, the purpose of us getting together, and there's a few things that we talk about, but one of the purposes of us getting together is that we can better understand how you and your company and if it's individual, you and your family, how you manage risk or how you handle benefits, how you deal with benefits either side. But we want to understand the purpose of this meeting is that we can better understand how you manage benefits or how you manage risk in your office or your business." That's the purpose. Otherwise, why are we here? Are we here just to copy things by the way that we don't even know are correct?

So of my biggest frustrations, oh, well, I got their policy decks. So who says that's right? Why would you want to play that game, right? Maybe we ask a few questions around it, but we never really do proper diagnosis. We never really understand the depth of what we're trying to solve. And again, these all correlate together. Not only are we doing them a disservice, we're doing us a disservice. We're doing our potential carriers a disservice long term. We can create really big messes with e and o. And by the way, it doesn't establish much value. I mean, to go down the list, right? That's why to me, a lot of this goes back to a term I heard from Seth Godin years ago. Practice quoting gives you a race to the bottom. You're racing really fast to the bottom. That's why I said, even if you win and you win a few of these, you end up losing, you end up losing credibility, you end up losing accounts.

Long-term, you end up losing opportunities because again, in the marketplace you've been devalued it. It's a bit of a race to the bottom. But again, number two is prescription without proper diagnosis is malpractice. So again, I go back to a question to you, for your agency or you as a producer, what type of diagnosis are you providing upfront? What does it look like? Are you doing some form of risk or benefits? Surveys? Do you have some form of diagnostic appointment? And we have some examples that we use for our agents, but something where you're really unpacking some things outside of just the policy. I want to understand you, how you view risk or how you view the benefits plan in your company, how you look at things for your family, why that's important to you. Because here's a really big key to this at this point.

I don't know if there is a fit at this point. I don't know if there's a fit for us together. And of course that establishes some walkaway power. But part of this, again, there's psychology and there's also just the right thing to do. But the psychology behind this is that I don't have to have your business. I don't have to quote your insurance. That's not what I'm paid to do. What I need to understand is how you view and look at things, how that fits into your overall portfolio. Again, whether it's personal benefits, commercial lines, and determine if there's a fit for us to have future conversations or do future actions together. And at this point, I don't know. So I need to ask a few questions. I need to understand things deeper to determine if it makes sense for us to move forward. Does that sound fair enough?

And unless someone is an absolute transaction price buyer, and by the way, some people are, most people say, okay, and you start to unpack some of these things. And if they're not, you say, I really appreciate your honesty of things that's most important to you. And it seems like to me after there's many questions I've tried to ask here, is that price and coverage, just looking at your policies is the only thing that's going to be important to you. That's not how we do things. As a professional, you don't have to use those words. So I don't know this would be a good fit. And you begin to walk away, which is, okay, go invest your time and energy and effort into other opportunities that they do look at things a bit differently. So again, number two, prescription without proper diagnosis is malpractice.

And then the last one I want to share here, and again, and these are a bit higher level, but we could go deeper and deeper in these. Number three is this practice quoting makes you extremely generic. It makes you generic. Why does it make you generic? Because that's the expectation in the marketplace. Everybody quotes, go to most independent insurance agency websites, not the good ones. Again, I'm not trying to pick on people, but if you get a lot of just average websites, it'll say, get your free quote. Get your free quote. And again, some of the big boys and girls do this out there in the marketplace, but they have enough transactions and efficiency to do some of this stuff. Most independent insurance agents, they just don't have a better plan. Well, I get a quote, you want a quote? I'll get you a quote, free quote.

Need a quote, right? First conversation, by the way, if we're in person at a meeting, right? It's like, Hey, here's what I do. And if any of you ever need a quote, we'll be happy to get you a quote. Everybody does that. What message are you sending in the marketplace? Here's the message. My name is Brent. I do quoting just like everybody else. So I really have no differentiator other than I'm physically present with you, or you heard my voice now. So maybe you get a quote, and even if I do get a quote, it doesn't substantiate any value to you, but I did my quote. And then you get a quote. Like what? Right? If you want to give someone a good quote, give them an actual quote that's like a verbal quote or a written quote from somebody who had something important to say, don't give them an insurance quote.

So it makes you generic. And it makes me think of a conversation I had several years ago with a really successful independent insurance agency leader on the East coast. I was out speaking at an event, and I love this. I always remember this because this conversation that jumped out at me, we were sitting at the table and grabbing some dinner and having a great conversation. And I always try to pick the brain of people that are successful, and I just say, Hey, listen, the state, what's the one thing that's made your agency most successful to this point? And he kind smiled and he said, that's really actually pretty simple. He goes, I just look at what everyone else is doing in my space. And I generally do the opposite. That was it, right? I look at what everyone else does, which one of those things is they all quote and they sound the same.

In fact, the generic five that we talk about is that our agency has great service. We've been around for a long time. We're local. We're really competitive. We represent all the markets, and then we have the best people. Some of those kind of overlap, but those are the generic five or six or whatever. But I mean, it's like these generic terms that we have that, and most agencies say, and they think that it says something, but the truth of it is that everybody says those things, right? So practice quoting is just one more thing that makes you look and sound generic. You look and sound like everybody else. And I think part of the problem with this is that we're really nervous to exclude or turn anybody away or have anybody in the marketplace like, oh, but this goes back to a famous quote that I heard years ago, that if you market to all, you market to none.

Oh, we do everything for everybody at any time. Like no, no. We're very specific in how we work. And our approach and our process is unique and different, and it applies for these reasons, for these type of outcomes and the type of clients we're looking to work with. And when you have people that don't fit that mold, they will quickly disqualify themselves again, which saves you time, energy, and effort. But those people that hear and understand your message will quickly be attracted to what you offer and what you do, and it gets you away from practice quoting. These are critical things to think about. There's an overall foundation, a law called the Law of Compensation and the Law of Compensation stresses. Why do some people, and I can use in this case, why do some agencies, why do some professionals, why do some producers get paid more? Why do they have bigger books of business than others? And there are several factors to this, but the law of compensation takes a very broad approach, and I love it because it says this, there's three factors that must be in place. Number one, do people in the marketplace need what it is that you offer? Do they need it? Do they need benefits and risk advice and be able to transfer risk and placement? Yes, they do.

Do you have the ability, number two, to do it right? Do you have the physical ability to go do it? Now, there's different levels of ability, but for most of you listening to my voice right now, do you have the ability to go out and do these things? The answer is yes. Which leads to number three, which is the big one. Number three is what is the difficulty in replacing you? What is the difficulty in replacing you? And I know this sounds really weird, but just think about it for a second and be really honest. Have this question with your team. Have this question. Ask this question to yourself. And the question is this, if we were to disappear tomorrow, we would just disappear. Would the majority of our clients say this? I don't know how we can continue to do business the way we were doing it without them or without him or her or that team.

Would there be challenges there? Or would they say more of, gosh, that's too bad. I guess we'll just go find someone else. They all kind of do the same thing anyway, you have to be really honest with that. And a big part of that is if you are a practice quota, you're much more likely to be in the category of being easily replaced. If you have an established process, you set rules of the game, you're like, we don't practice quo. And by the way, here's the first step on this. Again, you've got to have some stuff lined up, and we help agencies and producers and teams do this, but if someone says to you, I would like a quote on my insurance, are you willing, ready and able to say, Hey, thanks so much for asking that we actually don't provide quotes.

Are you willing to say something like that? Now, you've got to be able to back that up of why, but hey, could you get me a quote? I'm looking for a quote. No, we don't offer quotes. And here's the reason why. We have a unique approach and process, and our first meeting, our first conversation together is to better understand how you and your company either manage risk or handle benefits. And once we establish that, we can understand how to move forward from there. Otherwise, we would be doing you and your company a disservice. Again, I spitball that, but just that approach, even looking at my three sets up the fact that A, I, and we are professionals, B, is I'm not going to prescribe something to you without diagnosing it. And number three, we are not generic. We are very unique and different in the marketplace and what we do and what we offer to people, and by the way, I know there's some people out there when I think about these quotes, are not giving quotes, at least having a process.

Do we believe only in AORs and Boors at sit? And again, there's different philosophies out there. I know some people preach and teach that, and I get it. There's some great aspects to it. Here's the way that we view things. We believe that an A OR or A BOR is the natural outcome of a great process. The AOR or BOR is a natural outcome of a great process, and that's what it's, it's walking people through a process. And I'll tell you that a lot of the agencies we work with and producers, they do get a ton of AORs and BORs, and we love it, right? It's one of the options. I don't think it should be the only option in every situation, we have some agencies where 80% of their business is AORs. We have some, maybe it's half right, and I get it.

But the bigger point of all of that is the fact that if we practice, quote, we're eliminating any chances of a BOR or AOR because we're just simply like everyone else going to the marketplace. But there needs to be a proven and established process around that. All right, so those three things are critical to get, I just ask you as an agency, as a team, as a professional, say, do we fall into some of these traps? And by the way, what may happen and what's realistic is maybe sometimes you do a good job of this and sometimes you don't. So it's an evolution of can we get better at moving away from this generic concept? And if you want to learn more about what we do, and we can help you establish this in deeper levels, every quarter we begin to relaunch our programs, all part of our Sit Kins membership.

You can learn more. Go to sitkins.com, reach out to me or my team. We're here to help you. We'd love to get your agency on board to establish some key mindsets and behaviors to get you incredible results, which is what we're all about, right? It's about getting you and your agency results. Also, as a reminder, if you would like this poster, if what I said today made sense and resonated with you, and you would like to make this something that you could share with your team or put up in your own office or your home, put it on a mirror as a reminder, as a discussion point, the No Practice Quoting poster, or just go to sitkins.com/npq for No Practice Quoting. Thanks so much for listening. I wish you, your agency, all the best in your success. Take care.


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