The agency owners are typically the most profitable producers you have. But if the majority of non-owning producers aren’t hitting their goals, they’re most likely unprofitable. What percentage of your producers exceeded their sales goals last year and what percent are on track to exceed them this year?
We know from the thousands of profit center analyses we’ve done over the years that the average agency’s “A” clients (the top 5%) are very profitable, their “B” clients (the middle 15%) are marginally profitable and the “C” clients (the bottom 80%) tend to be unprofitable. I’m not saying that’s how it is in your agency, I’m just suggesting you take a look at it. Play the “what-if” game. What if you didn’t have the top 5% of your customers? Would you be profitable? Ultimately, you...
This reminds me of the story about the Cobbler’s children who have no shoes. This phrase is used to describe the phenomenon where professionals in any given area are so busy with work for their clients and their teams that they neglect using their professional skills to help themselves or those closest to them. Think of the web designer that hasn’t finished their website, or the accountant who is late in submitting his own tax return!
A great friend of mine, who’s also a great client, asked me an interesting question recently. “After all these years of consulting with independent insurance agencies, what are your greatest concerns for them in the future?” My immediate reply: Vulnerability tied to Profitability and Perpetuation.
Although they are not the only ones, I believe that vulnerability, operating profitability, and perpetuation are central to the greatest risks facing approximately 95% of IIAs. Unfortunately, these are issues...
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