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

1. Begin with sales activity and time management. Go back through your calendar. Look at each day of the year to determine what 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 take out holidays and weekends. As amazing as it may sound, many producers find as few as 55 days left for actual selling to new prospects.

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

-How many of the top accounts are in serious jeopardy at renewal?
-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 of business. 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 and value, and typically cause profit-sharing and payment issues in the agency. For the next year, commit to writing only accounts that meet your minimum desired commission goal. Make the same calculation for your new accounts. If you're looking for higher per-account income on your new accounts, go after larger accounts.

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

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

6. Determine how much income you want for the coming year. You have identified 100 new prospects similar in size to your top 10 accounts. 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,” recently published by the Academy of Producer Insurance Studies. Let's start with prospects and work backward to determine what you need to do to reach an income goal of $75,000, with an existing average commission per account of $1,500 and a previous year's closing ratio of 35%:

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

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

9. Organize your time. The only factors that separate super producers from mediocre ones are staying on task, avoiding distractions and continuously increasing the size of the accounts they work on. Take a good look at your past activity and determine what you can do to “change the numbers” for the coming year. Preparing my own personal marketing and business plan has evolved into a two-week process that includes reviewing 20 pages of past performance, setting goals for the next year (both of new and renewal revenue, along with an expense budget for getting the job done) and crafting a marketing plan for each of those prospects.

Good luck and good selling!

Tom Barrett is president of the Midwest and Southeast regions of SIAA Inc., a partnering of 1,400 agencies. Tom also serves on the National Faculty for Dynamics of Selling and Ruble Seminars for The National Alliance for Insurance Education & Research. Readers can contact Tom at tomb@siaa.net. For more information on Dynamics of Selling, call (800) 633-2165 or visit www.TheNational-Alliance.com.

Special Reports /

Strictly Sales: The basics of a personal marketing and business plan

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