If there were just one pearl of wisdom I could share with producers, it would be this: Your network equals your net worth. That’s not a Sitkins original idea; however, I truly believe it’s the number- one tip I could give any producer.
In today’s totally data driven world, I fear that too many producers believe they can “click their way to success.” They rely far too much on the Internet as a means to reach their business goals.
FYI, I strongly support the use of social media, digital marketing, and web-based, mobile and ondemand platforms—any sort of app designed to boost productivity.
No matter where you look—past, present or future—the best producers all have one thing in common: They were, are and will be great networkers.
If you’re wondering how you can constantly build your network, here are some ways that have worked for me, as well as the thousands of producers we’ve trained in our 100-plus Producer Training Camps....
Most, if not all, independent insurance agencies say they want to grow. However, the actual organic growth rate for most agencies does not reflect this.
According to a recent report, even the national brokers had an organic growth rate of only about 3% last year. While their 3% translates to a much greater dollar amount than the average agency, it’s still only 3%. Considering these are the agencies that are supposed to have the best producers, the best markets and the best everything, to me that’s a truly lackluster figure.
Any agency that’s growing just enough to stay ahead of the ever-increasing cost of doing business is barely maintaining profitability. Accordingly, there’s little or nothing left to invest in obtaining the best people, automation and outside services. So the need for organic growth is self-evident—or is it?
As I began to ponder why more agencies aren’t growing at a greater rate, it occurred to me...
Originally I was going to say “plateaued owners and producers,” but the reality is you cannot afford to have any employee who has “retired in place.” We talked about this in our Profit Zones articles in the May and June issues. As I discussed at that time, if you have any RIP employees who aren’t following the system, not doing their job and not embracing change, your agency will plateau because RIP becomes contagious. That’s why every employee must be viewed as a Profit Zone.
Often, it’s the employees with seniority who not only refuse to do certain new and agreed-upon tasks, they get away with it. In other cases, there are employees who just don’t care. Either way, their attitudes and actions have a negative impact on all other employees in the office.
At most agencies, there are two kinds of workers. There are the ones who dread their jobs and only show up to “make the donuts.” As...
This month I want to challenge you with a theme we’ve often discussed:
What’s the cost of doing nothing?
This applies to those who consistently do the same old, same old and brings to mind two of my favorite adages: “If you always do what you always did, you’ll always get what you always got,” and “What got you here, will keep you here.” The strategies, tactics and behaviors that you’ve used to get your agency where it is today probably won’t continue to serve you in the future because the world is changing so rapidly. Consequently, the cost of doing nothing new continues to skyrocket. So if you’re unable or unwilling to take the initiative to start doing things differently, there’s a good chance you will eventually kill your agency. While I doubt that anyone really wants to kill his or her agency or deliberately sets out to do so, there are plenty of ways to destroy an agency. Here are the top five agency killers.
Last month’s article was about the Five Profit Zones. Well, after it went to print I had one of my semi-famous BFOs (Blinding Flashes of the Obvious): There is a sixth and very important profit zone—your insurance carriers.
I would love to have just 1% of the dollars left on the table each and every year by independent agencies that aren’t managing what should be considered a stand-alone profit center. The figure would astound you!
So how does one earn greater profits in this area? It boils down to analyzing the insurance carriers you represent and your relationships with them.
We’ve often talked about the 80/20 Rule and the concept of knowing vs. guessing. It certainly applies here. Do you truly know what your carrier 80/20 analysis looks like? Probably not. I’ve been consulting and coaching agencies for more than 35 years now, and it’s clear to me that in the average independent agency, the top 20% of your insurance...
View every employee as either a profit center (contributing to your profitability) or a loss center (taking away from your profitability). Here are the major factors affecting non-producer employee profitability:
Money, in and of itself, is rarely the true motivation for entrepreneurs. It’s what you can do with money that truly motivates people. For some, money equals financial freedom—the ability to do what you want to do, when you want to do it. Whether it’s supporting your family, your community, your church—whatever, money enables you to do so. To others, money equals time and the resulting freedom to indulge in the things you really love doing.
What you do with your money is your choice. However, you must first earn the money, which means you must create profits.
There are five profit zones that agency owners and managers should actively manage. All too often, I see people looking only at their bottom line. Very few break it down to see what is actually impacting their profits.
Never allow profitable accounts to subsidize unprofitable accounts.
Here the goal is very simple: Every account must create a profit.
As a consulting firm, we...
If you’ve never heard the word “simplexity,” you’re not alone; it’s a word I coined by combining “simplicity” and “complexity.” Your objective is to avoid “simplexity” by keeping things as simple as possible. In the process, you’ll obtain great results.
There’s a correlation between effectiveness and simplicity. The simpler something is, the easier it is for people to implement.
Lately, I’ve been focused on promoting the benefits of simplicity. As such, I am continually coming across relevant quotes on this topic from some of the world’s greatest minds. One of my favorites is from Leonardo da Vinci who said, “Simplicity is the ultimate sophistication.” But through the years, I’ve seen way too many people complicate things that should be simple and easy.
The concept of “idea creep” is something I read about in Made to Stick, a great book...
People are constantly refuting the idea that it’s possible to earn a 25% operating profit, but the truth is, yes you can. How? (And here comes the big trick.) You simply can’t spend more than 75%! Seriously, I could earn a 25% operating profit if I truly managed to a financial model designed with that in mind. In that case, the bottom line would become the top line and you would live by the 25-50-25 Financial Model (a 25% operating profit; 50% service and administrative expenses, and 25% on sales expenses).
What’s your financial model? At some point, you have to draw a line in the sand and commit to earning a 25% profit. Make it a defining moment.
I can’t believe how many agencies will spend $50,000 on a website and expect the public to knock their doors down. Apparently, their theory is “Build it and they will come.” But after...
Are you proud that your agency represents so many companies? If so, you’re not alone. I’m amazed at the number of carriers the average agency has. But what’s even more amazing is when they figure out how many they have. In reviewing their “insurance company accounts payable,” most agencies are shocked to see how many carriers are listed. Sometimes, when looking at all companies and E&S brokers, it’s in excess of 75.
Often, agencies will take a contract with one company or one E&S lines broker for one piece of business.
We always talk about the 80/20 Rule, but were you aware that it applies to your carriers also? Basically, 80% of your premium volume is written with 20% of the carriers that you represent. Take a look at your own book if you don’t believe me.
Today, more than ever, you need relationships and clout with your carriers. That way, you’re more likely to get...
Download the latest white paper from Roger Sitkins.