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Independent agents seek growth
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King delivered his keynote address to a crowded room at the awards luncheon, focusing on issues facing personal-lines agents and what they must do to surmount them. King, who consults regularly with agents looking for ways to increase their bottom line, proceeded to detail what agents are looking for: organic growth; movement from a service to sales culture; new customers; more policies per customer; improved staff compensation plans; greater accountability among employees; and an overall increase in agency efficiency. He noted, however, that though these aspirations are understandable, they do not happen without an agency strategy.
“Let me dispel a rumor that is rampant among agents … hope is not a plan that will work to get you out of a bad situation. Hope is positive and a good thing to have, but it is no substitute for a growth plan.”
King outlined the recent trends independent agents are witnessing: “Agents are realizing that this is no longer their father's business,” said King. “They are seeing changes and need to be prepared.” He cited some of the challenges confronting agents: level or declining revenue; a customer who shops around more; and ever-increasing competition from direct writers. “Direct writers tend to do what they do extremely well,” he said. “Independent agents have dropped the ball over the years getting away from what they do well: Educating and counseling their client.”
King encouraged independent agents to think about their agency philosophy. “What do you want to be? Independent agents have the unique option of being able to do business in a countless number of different ways.” He discussed how philosophy permeates all aspects of agency culture, affecting management style and, thus, job design, ultimately impacting the flow of work and specific procedures of the business. “There's no question that your procedures must match your guiding philosophy.”
The key to increased revenue, according to King, is matching practices to the overall agency philosophy. For example, in order to move from a service to a sales culture, agents need to offer a compensation plan that encourages this practice. “Pay more for accounts that are better and provide more profit for the agency. We tend to get more of what we compensate greater for.”
He posed a question to the audience: “How many have their number-one source of business as referrals?” Almost every hand in the room went up.
“Now, how many of you have a systematic and documented plan for attracting referrals?” Not a single hand rose. King continued, “Having no plan equates to hindered growth, and no driving of our number one source of income! Does that make any sense? We need to see more agents do things differently and make a difference at the CSR's desk.”
In concluding, King emphasized the importance of developing a philosophy and strategy for growing the business. “You need a plan,” he said. “There is no silver bullet to save you, no simple solution in this market, so stop looking for one. Having a plan is the only way to better position the agency for success.”