While the primary foundation for agents’ and brokers’ revenue growth is the production of new business and retention of existing clients — one policy and one total account customer at a time — there are nontraditional ways to drive revenue with significantly larger chunks of business. You must be ready to think outside the box and be creative.
To do this, you have to be willing to take risks and understand that you will fail many more times than you will succeed. The occasional wins are worth the effort. After all, a baseball player who hits 3 out of 10 can become a multimillionaire. Nobody cares about the 70% of the opportunities he missed.
I hope to stimulate your creative thinking by sharing some of my nontraditional sales activities. I’ll present you with two types of activities: “inside” and “outside.” Inside activities are ones you can begin to do now because they’re based on your present book of business. Outside activities reach beyond the agency. We’ll look at those next month. Where will your own creativity take you?
The ‘Six Ps’: Proper planning prevents piss-poor performance
Outwit the competition by being better prepared.
During the crazy commercial market of the 1990s, premiums were all over the place. A client with 20 apartment buildings was coming up for renewal and only cared about the lowest price — ever hear that one? With quotes from several carriers ranging between $220,000 and $350,000 and facing competition, what should we present? We wanted to keep the business, but didn't want to leave money on the table by going with the lowest quote.
When I sat down with the customer, he immediately said that he had a very competitive quote from another broker, but he wouldn't tell me what it was. My mission was to get him to show me that quote before I presented mine.
I was ready for that. I had prepared seven different renewal quotes, all with the same coverage but with seven different premiums. They were in color-coded folders standing vertically in my briefcase. I simply said, “Look, let me see the proposal you have. After all, mine is what it is and I can't change it now.” Then I shut up.
He thought that was reasonable, so he showed it to me. When I saw the premium of $330,000 I reached into my briefcase, pulled up the blue folder with a $315,000 premium, and laid it in front of him. He was elated and we kept the business. I had practiced pulling up those folders with the different quotes for hours because I knew I had only one shot.
Being prepared with multiple quotes was so effective, we occasionally used the technique with other large sales. Our agency won the business of a large beverage distributor with a quote for $1.150 million over the competition's $1.205 million, thanks to a green folder and, of course, the “Six Ps.”
Consider niche areas of coverage, such as policies for horse-drawn carriages, is one way to think outside of the box. (Photo: iStock)
Review your book of business for three or more of the same types of customer.
Talk to your agency companies and explore with managing general agents and specialty markets a shared marketing plan to aggressively target a specific customer. Create joint sales materials. Share the cost and negotiate a few extra commission points.
Your staff and producers can gain expertise and comfort, and you can become the go-to resource within a larger geographical footprint. Over the years we developed niche business programs for beverage distributors, car washes, not-for-profits, museums, and construction and real estate developers.
Create your own proprietary insurance program. That's right: No new filings, no new forms and no new policies.
One of our museum clients, the Long Island Museum of Art, History and Carriages, housed the largest collection of horse-drawn carriages in the U.S. I served on the board of trustees and became aware of the many existing local, regional and national carriage associations, with carriages and accessories reaching values as high as $200,000, excluding horses.
Some of the tractor-trailers used for conventions and exhibits also reached values of more than six figures. Traditional Homeowners’ policies didn't provide the scope of coverage needed because of the transit and exhibition exposures, and it was obvious that an Inland Marine form of coverage was needed to provide Valuable Items Collection coverages.
We approached several of our agency companies with the idea. A larger agency loved the idea and authorized us to write and issue Inland Marine policies on carriages — property only, no liability and no mortality. Our relationship with the museum helped convince the carrier of the museum's expertise to appraise carriages for insurance and assist with the claims process as they had the most knowledgeable staff in the country. The fee income that the museum would gain from appraisals, claims assistance and accessory restoration work was appreciated.
The next hurdle was how to market the Write Your Own product nationwide. We joined local and regional carriage associations in the Tri-State area, became sponsors and attended events in exchange for membership lists. We created our own brochures and marketing materials. Then we joined the Carriage Association of America, and attended their annual event and convention in French Lick, Ind.
Our Carriage Insurance booth was set up next to the harness makers, the wheel-and-spoke folks, and the blacksmiths. For the first day-and-a-half, we had no inquiries. We learned that carriage collectors took such good care of their property that there were hardly any losses. But when a loss did occur, it was usually a large one.
I was feeling pretty down, thinking about the waste of time and money. So I went for a walk onto the fairgrounds to watch the procession of the biggest carriages. Then it happened: A carriage with six horses and seven passengers went off a bridge into the river after one of the lead horses got spooked. Fortunately, there were no serious injuries to the horses or passengers. For the rest of the event we had a line of people at our booth, wrote some business on the spot, and our Carriage Collector's Insurance Program was off and running. One of the side benefits was writing the entire personal account, usually for a high-net-worth client, after we wrote their carriage collections.
I started my own agency in my house in 1975 after working at a New York City agency for five years. I had no customers, so I contacted some of my good friends in the life insurance business to explore ways we could possibly work together. This was the beginning of my idea to partner with others to sell to their relationships.
I met with a colleague who had recently been appointed as an Aetna Life general agent in Brooklyn. One of his new producers, who happened to be Korean, was trying hard to succeed in selling life insurance to the Korean community. During the ’70s, much of the textile and garment business in the New York City area was moving to Hong Kong and Taiwan, and many Korean entrepreneurs were moving in to fill the gap. The opportunity was there. My Korean friend and I developed a long relationship, and in the process, almost every Korean bank in New York City became our customers: Hanil Bank, Commercial Bank of Korea, Bank of Pusan and Korea Exchange Bank. The banks also started to refer us to some of their large clients, such as Korea Express Co. and others in the import/export business. The relationship with the growing Korean community helped our agency build a solid foundation.
Think outside the box. Seize the opportunity. Be creative, take the risk, put in the hard work. You will add business in leaps and bounds instead of one policy at a time. Sometimes all you need is a little good luck.
Internal, I was the agency's only life and P&C producer. After a few years, I just couldn't handle all the opportunities from our P&C clients. I hired an assistant Life general agent to do three things: Produce Life business from our P&C clients (no prospecting problems), hire and train additional sales people for Life (I would train them for P&C), and find and establish other Life, Accident & Health and group relationships to give us general agency contracts that would include overrides.
The Life & Employee Benefits division became highly successful. In time, that position evolved beyond Life & Benefits, so we hired a registered investment advisor and went into the mutual fund retirement and 401(k) business full time at full speed, selling to our growing P&C client base. This was a critical move and a key factor in our future affiliation with a local community bank. Later, we hired a seasoned general agent and executive from one of the largest company partners, MetLife, to run the operation, manage our producers and help create a brokerage operation with outside producers.
Barry Seigerman founded the Seigerman Agency, a full-service, multi-line agency in 1975, and is now a producer for People's United Insurance Agency. Contact him at firstname.lastname@example.org.
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