MY LAST column (“Have a Quantifiable Plan to Sell New Businessin 2004,” January 2004) created quite a response. A number ofproducers asked, “How do you put together a personal marketing andbusiness plan?” Let's review the basics. Remember, it's never toolate to go back and formalize a plan.

1. Begin with sales activity and time management. Go backthrough your calendar. Look at each day of the year to determinewhat you did with your time. How many days were spent on vacation,illness, continuing education, servicing your existing clients,visiting carriers, agency meetings and trips? Don't forget to takeout holidays and weekends. As amazing as it may sound, manyproducers find as few as 55 days left for actual selling to newprospects.

2. Make a list of your accounts by commission income. You'llprobably find that 80% of your income is generated by 20% of youraccounts. Draw a line at that 80/20 threshold and ask yourselfthese questions:

-How many of the top accounts are in serious jeopardy atrenewal?
-Are there any issues with your carriers on these accounts?
-Has the level of competition for these accounts changed?
-Assign a percentage chance of renewal to each account.

3. Determine average commission per account for your book ofbusiness. Also determine the minimum commission income you want.Now comes a hard decision: Find a way to get rid of the bottom 10%of accounts. They take up service time, generate little income andvalue, and typically cause profit-sharing and payment issues in theagency. For the next year, commit to writing only accounts thatmeet your minimum desired commission goal. Make the samecalculation for your new accounts. If you're looking for higherper-account income on your new accounts, go after largeraccounts.

4. Determine your conversion rate for the past year. To how manyprospects did you send promotional packages? How many of thoseprospects did you get to talk with on the phone? How many phoneconversations did you convert into appointments? How manyappointments led to presentations, and how many presentations ledto sales?

5. Look at your top 20%. Identify your 10 best accounts in termsof quality, relationship and income. Determine which of theseaccounts can provide you with referrals. Visit these clients andask for 10 referrals from each one. You will gain 100 new prospectsfrom your best clients.

6. Determine how much income you want for the coming year. Youhave identified 100 new prospects similar in size to your top 10accounts. You already have had success with the class of business,and you have carriers ready to write the accounts.

7. Determine the “numbers” needed to achieve your income goal.Use national-average numbers from “Zoom In On Sales,” recentlypublished by the Academy of Producer Insurance Studies. Let's startwith prospects and work backward to determine what you need to doto reach an income goal of $75,000, with an existing averagecommission per account of $1,500 and a previous year's closingratio of 35%:

?You send mailings to all 100 prospects. Because these arereferrals, you have a 70% success rate at getting X-dates.
?50 presentations (again, though the average conversion from X-dateto presentation is 55%, we're using 70% because these arereferrals).
?Assuming a 40% closing ratio, you get 20 new accounts from thepresentations.
?With an average commission of $1,500 per account, you have $30,000in commission from new accounts.
With these calculations, you need $45,000 in renewal income toreach your total goal of $75,000.

8. Go through the “how can we change the numbers” exercise. Youmay decide to pursue larger accounts. You may want to focus more onreferrals because the closing ratios and conversion rates arehigher. You may want to clear more days for selling. Remember, anaverage producer ends up with about 55 days a year for selling.With 55 days to make about 100 contacts that lead to 50presentations, those 55 days had better be productive!

9. Organize your time. The only factors that separate superproducers from mediocre ones are staying on task, avoidingdistractions and continuously increasing the size of the accountsthey work on. Take a good look at your past activity and determinewhat you can do to “change the numbers” for the coming year.Preparing my own personal marketing and business plan has evolvedinto a two-week process that includes reviewing 20 pages of pastperformance, setting goals for the next year (both of new andrenewal revenue, along with an expense budget for getting the jobdone) and crafting a marketing plan for each of thoseprospects.

Good luck and good selling!

Tom Barrett is president of the Midwest and Southeast regions ofSIAA Inc., a partnering of 1,400 agencies. Tom also serves on theNational Faculty for Dynamics of Selling and Ruble Seminars for TheNational Alliance for Insurance Education & Research. Readerscan contact Tom at [email protected]. For more information on Dynamicsof Selling, call (800) 633-2165 or visitwww.TheNational-Alliance.com.