(This article was adapted from Mr. Baker's presentation atthe AMS Users' Group's National Conference, which was held in Marchin Orlando, Fla.) Before we get started, I'll make aconfession–I am a recovering producer. I've been through therapyfor it. A lot of my therapy dealt with issues of control, of beingin charge. Who's really in charge? That segues nicely intomy topic: Gaining control of your agency. There are only threegroups of people preventing you from doing that: producers, staffand customers. In this article, I'll offer some suggestions forremoving them from the driver's seat as diplomatically as possible,and putting you back in it.

We have to establish why we come to work every day. We need tounderstand that we are not in the service business. We cangive customers perfect service, but if a customer has a loss andanything prevents it from being properly covered, our service meansnothing. We're in business to protect people's stuff, andif we're not focusing on protection, then we're not doing our jobs.And quite often, that's because we're not in control.
Here's an example of what we should be doing. I say to a customer(commercial or personal lines), “I need your signature on this bankdraft card. We're putting your premium payments on electronicwithdrawal, and let me explain why we're doing this. If your creditcard payment is lost in the mail or delayed and your paymentdoesn't get posted, the credit card company is going to charge youa fee. But if your insurance premium gets lost in the mail or isdelayed, your policy will be canceled. If you have an accident, youcould lose everything you own. I know I don't want to put my fatein the hands of the U.S. Postal Service–and I'm sure you don'teither. Sign the form.” Do you think you'd have people signing?Yes.
But perhaps a customer says, “Wait a minute. I don't want to dobank draft.” Your response, every time, should be: “No problem. Youcan pay me in full.” Then the customer says, “Well, can't you domonthly?” You say, “OK, here's how much it's going to be monthly. Ineed you to sign this form. It says: 'The dangers of paying monthlyhave been explained to me. I understand I've chosen to let thecompany bill me. And I understand all my billing questions must godirectly to the company. And I understand all my payments must bemade directly to the company. And I understand if my premium islate or not received and my policy is canceled, I could loseeverything I own.' So just sign the form.” Is that too strong? Idon't think so.
You can't let customers decide how you do business, because theydon't know what's best. Some of you are probably thinking, “Wait aminute. I've got a half-million-dollar account. You're telling meI'm going to tell them what to do?”
Let me tell you something–it's not the half-million-dollar account,as a rule, that's the problem. It's the $2,000 BOP on which you'remaking $200 that's the problem. But for $50,000 and above, maybe wedo have some options. If a $500,000 account says, “I wantto do something different,” you need to say, “Look, we may goalong, but if we do, I want you to sign off on all of this, becauseit's not how we normally do business and you could get hurt.” Thisis called being proactive.
Who's responsible?
Owners have responsibilities to their organizations. Theorganization comes first. If it's not strong, nobody wins.If Jerry works for me and doesn't do what I ask him, who's atfault? I am. I can't blame him if I allow him to disregard myinstructions; that's my fault as a manager. How do we getthe staff to do the right thing? I've heard owners say, “I want toget people onboard. I want to get people behind my approach todoing business, to see why this is the best way of doing things.”Please understand, the moment you go down that path, you've alreadylost.
I have no right to get anybody to think the way I do,whether I'm right or not. The minute I say, “Jerry, I want you toagree with me, I want you to buy in,” what I'm really saying is,“Jerry, I want you to react in a way that won't make me feel guiltyfor making you do this.” The better approach is to focus onbehavior and not attitude. I don't care what Jerry thinks.If he agrees, that's great. If he doesn't, that's unfortunate butirrelevant. I want to enforce behavior in our agency–which is tosay, I want to enforce the way we do business.
This goes for customers too. If a customer calls up and screams andcusses at Debbie, I'm going to say, “Customer, you're gone. This isnot how we do business.” I know of an agency that, starting fromscratch, grew to 150 people in 10 years. The president had ano-tolerance policy. He said, “I don't care how much business youbring to this agency, if you disrespect another person on our team,you are gone that very moment. We don't do business thatway.” He wasn't interested in employees' beliefs orpersonalities. He was saying that certain behavior is unacceptable,whether you're a customer, CSR or a producer. When agencies startdoing that, profitability goes up, and employee and customerretention goes up. The agencies start gaining control and startgetting rid of problems.
Compensation and control
Let's talk about staff compensation. We need to base it on threecriteria.
No. 1: The work you do. If you follow theprocedures, you'll make more money. If you don't, you're costing memoney and your compensation will reflect that.
No. 2: Our profitability. Staff alwaysexpects more money. They don't care whether the money is there ornot. But people need to understand that profitability is somethingwe all need to have a part in.
No. 3: Efficiency. You say, “Staff, thisis how we do business. If you do it this way and we're moreprofitable, you're going to share in that. If you don't doit this way, we won't be as profitable and it's going to cost youmoney.”
If I say, “Producer, put the application into the agency managementsystem,” and the producer says, “I don't want to do that,” I reply:“Fine. Then I'm instructing my CSR to cut your commission in half.”I'm not going to argue. I have control over the accounting, and I'msimply not going to pay for inefficiency.
Gaining control of service
What if we were to never again receive a phone call for a changerequest in commercial lines? Would that save any time? Would it doanything for our E&O exposure? Here's what to say:
“Customer, we have a rule. If you want me, in commercial lines, tomake a change to your legal document–i.e., your policy–for your ownprotection, we require your written authorization.” (Of course, thesame rule should be adopted in personal lines to handle such thingsas phone-in requests for changing vehicles on auto policies.)
Would customers benefit? Yes, they could e-mail or mail or us theirchange requests on their own schedule. Accuracy would be improvedtoo.
So how do you bring this about? First, give new commercial-linescustomers what we call a New Customer Instruction Sheet, whichcovers procedures for submitting change requests and other matters.You say: “This is how we do business. If you need a change, this iswhat you're going to do. Let me explain the benefits to you.”
It's a good idea to have the client sign the New CustomerInstruction Sheet. This informs the staff that this customerknows. So if the customer tries to call in a change andprotests that he or she was never told about the agency'sprocedures, the staff doesn't throw the contradiction in thecustomer's face, but they have the confidence of knowing the personhas been told–and has acknowledged as much inwriting.
Now that was easy for new customers–but what do we do aboutexisting clients?
How about: “I know in the past we did 'X,' but there were problemswith that. We're going to do 'Y' in the future, because we careabout you.”
For example, you could implement a policy requiring customers toprovide written requests at least 24 hours in advance forcertificates of insurance. An existing commercial-lines customermight say, “Are you serious?” Your reply: “Yes. One of these daysyou're going to be on a job site, waiting to get in, and thecomputer system is going to be down. The staff is going to tellyou, 'We can't issue a certificate for you.' What's going tohappen? You're going to be mad at me. On the other hand, if yougive us 24 hours' notice in writing, I'll guarantee that you willnever have a problem getting the certificate you need toget on a job site. Anyone who says you can call them anytime for acertificate is lying to you, because computer systems go down. (Sodo Web sites for self-issuing certificates.) I care enough aboutyou to tell you the truth.”
Similarly, you can change your procedures regarding personal-linesphone quotes, so customers will have more realistic expectations:“Please understand, customer, that if you call me and say, 'I'mthinking about buying this car,' only the company can give you anaccurate quote. We can't, so we're going to have to 'ballpark'it.”
“You mean you're not going to give me an exact price?” the customermight say.
“No, I can't,” you should reply. “It's not that I won't–Ican't.” That's true in most cases.
'Good service': A dubious value-added
Some agencies make “good customer service” their highest goal. Butplease understand–good customer service is worthless if it's notprofitable. Furthermore, good service is something that customersjust expect–like air in the room. They assume you provide it and sodon't appreciate it.
How often have clients moved their business for $50? You say, “Lookat all the work we did. Don't they appreciate it?” No, it's air. Asmuch as we want to think good service is special, it's just “air inthe room” to clients.
You must rely on something else to hold clients, and that's yourknowledge, relationship and ability to help them protect theirstuff. Everybody else is all too willing to give in: “Whatever yousay–I'll drop whatever I'm doing.” You should focus on gainingcontrol and protecting stuff.
Controlling your time
Here's how to gain control of your day. First, you must understandyou have a finite number of minutes at your disposal. Too often weact as if we have an unlimited amount of time to work.
“I know this probably isn't the best thing to do,” we say toourselves, “but I'll just stay an extra hour today and get caughtup,” or “I'll just come in an hour early tomorrow”–and that becomesa way of life. Sixty minutes an hour for eight hours a day givesyou 480 minutes for the day. Choose how you spend them wisely. I'mnot trying to create a bunch of clock-watchers; I'm trying tocreate proactive people who make intelligent decisions.
I might say, “Staff, we're going to stop taking direct-bill paymentquestions.” The staff says, “But that's what we're paid to do–thecustomers expect it.” I'm not going to disagree with them. In fact,I'll agree with them. But I know we have to get revenueper employee up. We only have 480 minutes in our day. We mustchoose between answering direct-bill payment questions anddoing renewal reviews. We can't do both. Customers can get answersto direct-bill payment questions elsewhere, but not renewalreviews. One does not really protect people, while the other does.If I must choose, I'm going to choose renewal reviews.
So how do we stop taking direct-bill questions? We use theaforementioned New Customer Instruction Sheet to explain to newclients that they are to obtain that information from the company.But what do you tell a 10-year customer who's used to having youanswer direct-bill questions? You explain: “We have a new servicefor all of our preferred accounts. (Who are these “preferredaccounts”? Everybody.) Let me transfer you to the 'new billingdepartment,' which has all your up-to-date information.” (Notice wedidn't say, “Let me transfer you to the company,” although that iswhere we send them.)
What if we could eliminate 50%–or even just 30%–of our direct-billquestions that way? I'm not reaching for Utopia; I'm simply sayinglet's start gaining control.
Controlling direct-bill payments
Why dopeople walk into our office to make direct-bill payments? Theanswer is because we've “taught” them to do it. Why? Because wethink we'd better offer them something. But if that's theonly thing we offer, we're already in trouble.
Consider putting a sign on the door: “Effective Dec. 1, we will nolonger be allowed to accept direct-bill payments in ouroffice.” That approach has been used by hundreds of agencies in allkinds of settings. And in every single case it has worked. Not oneagency has lost money–notice I didn't say customers. There's adifference.
After customers read the sign, give them a sheet that says the samething, and then tell them they have three billing cyclesto accept the new system. Come Dec. 1, when they walk in, tellthem, “I can't take your payment.” Imagine the time and money thatcould save, while lowering your E&O exposure.
We're not trying to make people mad or run them off. Weare trying to say, “This is how we do business–and we'reserious about it.”
Using e-mail to gain control
Have you ever said this to somebody? “Give me your phone number, soI can check on your question and get back to you with an answer.”Too often, that just leads to phone tag and wastes everybody'stime. Let's stop it. Instead, tell the client, “Give me your e-mailaddress.” Not “Do you have an e-mail address?” or “Would it be OKto e-mail you the information?” but “Give me your e-mail addressand I'll send you the answer.”
I had an agency with about 18 people. I decided to tell them theywere no longer allowed to mail anything out of the office withoutfirst asking the person requesting the information if it could bee-mailed or, if not, if it could be faxed. In the first 90 days ofdoing that, we cut our postal bill by $1,500.
Let me give you another example of what you can do with e-mail. Youcan use Microsoft Outlook to schedule a date on which you wish tohave an e-mail message sent. When a commercial-lines CSR sends achange request to a carrier, he or she has to follow up on it. Thattakes up staff time and costs the agency money. Instead, the CSRcan use Outlook to schedule an automatic follow-up request in 45days. Whether the CSR is in that day or not, the company will getthe CSR's message saying: “Where is my endorsement? Please ignorethis if you've already handled this. Thank you for your promptresponse.” Don't we get stuff like this from companies all thetime? We can use this tool too.
Do you ever ask a customer for a federal tax ID number–then have tofollow up to get it? Tired enough to do something about it? If yourcustomer is using Outlook, you can schedule an event on yourOutlook calendar and invite the customer to the event by clicking“Invite.” Outlook will add the event to the customer'sOutlook calendar, so it will pop up and remind him or her of yourneed for the tax ID. Some of you may think that's too “in yourface” or intrusive, but I tell you there are agents who are doingthis.
The benefits of control
One of our agency clients in California went from $125,000 inrevenue per person to $175,000 in about five years. They went from$2.5 million in commission income to $7 million–and the growth wasall organic. How? The owner had a vision of how he wanted theagency to run. He told his people: “Folks, I know where we'regoing. The train is leaving the station–get on or get off.Customers, I want every one of you to stay with us. But the train'sgoing this way–either get on or get off.”
We must stop living in fear of customers and employees, and definethe agency's purpose. We need to decide who is in charge of ourbusiness. And the answer must be you. Whoever came up with thesaying, “The customer is always right” was definitely acustomer. When it comes to protecting stuff, the customer doesn'tknow what's best. We do.
I've been preaching this message for about 17 years, and ourcompany has worked with approximately 2,000 agents across the U.S.and Canada. The ones who have accepted the message are starting togain control. The staff is happier and more productive, stress isdown and customers are satisfied, and satisfiedcustomers–not merely happy ones–are loyal customers. We need togive people what they need in protection while operating ouragencies efficiently enough to stay in business. To do both, wemust be in charge. Ted Baker is the president of AdvancedAutomation, which for 17 years has offered consulting servicesaddressing a variety of agency management and development issues.He is an author and frequent conference speaker, and is AmericanAgent & Broker's Agency Technology columnist. He can be reachedat [email protected].