"Strictly Sales" is written by the faculty of the Dynamicsof Selling program. This month's column is from Tom Barrett, CIC,AAI.

IF YOU have been thinks of selling your agency, an old sayingmight apply: You've missed the boat! At last the market is turningtoward "spongy," which means premiums and commissions are comingdown.

In the past few weeks, I've met with three separate parties whoare seeking acquisitions. One, a national broker, is looking forbargains and focusing on well-managed agencies with perpetuationissues. This broker sees the changing market as a perfect time topay less for agencies. Another potential buyer sees the chance topurchase agencies for less as a great opportunity to build anational broker. A third investor thinks this is the right time tobegin purchasing agencies to build several large regional brokers.The last two investors are already in the financial servicesbusiness and see insurance as a natural service to add.

With the new market upon us, the only way for publicly ownedentities such as national brokers or financial institutions toreach their investment-return targets is through agencyacquisitions. What does this mean for the rest of us? Each of theseentities has a different vision of success, but they have one thingin common: They realize how poor the sales training, structure andsystems are in many agencies. They are playing on our weakness.Each publicly owned entity is creating its own "Academy" or"University" to increase the value of its acquisitions bydeveloping systems, procedures, sales training, sales managementand accountability.

Independent agents who want to maintain their independence canprepare themselves to battle the "big guys" in the followingways:

1. Define the agency sales culture. Define your sales cultureand compare your agency with the top-performing agency benchmarks.Many benchmark statistics are available from www.TheNationalAlliance.com. (Click on "The Academy," and"Publications.") Determine if your agency is a "survival agency,""maintenance agency" or "growth agency." There is no incorrectanswer. You must identify the agency culture before you can build astrategy; otherwise, you become fish food for the acquisitionshark.

2. Manage producers' time efficiently. Once you have definedyour agen- cy's culture, begin managing your time and prioritizingactivities. Discuss the fundamentals of time and activitymanagement with producers. Get your producers out of the servicemode and out of the office two or three days a week to call onprospects. The prospects you visit should fit the risk appetite ofyour carriers. If they don't, you are wasting your time.

3. Follow the eight steps of agency marketing. Each of the eightsteps for successful marketing should be discussed. The steps are:(1) developing a target program or prospect, (2) securing suspectleads, (3) refining suspects into prospects, (4) selecting a salescampaign, (5) determining the campaign focus, (6) creating salestools, (7) beginning the sales campaign, and (8) preparing for thepre-approach. Most successful agencies follow a marketing and salesprocess. Develop the process for a marketing campaign and then havethe courage to follow it. Stop trying to find carriers to writeyour prospects-find prospects your carrier wants to write.

4. Compile producer "game books." The agency needs to review thekey components of two "game books." The first is the producer gamebook. It contains the tools a producer needs in the field,including brochures, testimonial letters, references,broker-of-record letters, business cards, a telemarketing scriptand a target prospect list. The second is the competitor's gamebook. It contains the information an agency should have on itscompetitors: copies of other agencies' marketing letters,proposals, brochures and business cards, as well as informationabout their Web sites. Each producer should use the informationfrom the game books to develop his or her own customizedversion.

5. Super-qualify prospects. How can you be sure your agencyisn't wasting time on a prospect? Establish what it costs aproducer to work on a risk in time, effort and overhead. Review thequestions a producer should ask a prospect before working on aquote. Talk about price, product and politics. Discuss which is themost powerful, and determine which one you must have to moveforward with a sale. Insurance is a relationship-driven business.Until you have the appropriate relationship (politics), why spendthe time and effort to show the prospect you are willing to workfor free, just to show them "what you can do?" Have the courage towalk away when prospects don't fit your rules.

6. Cultivate effective company/agency relations. Review theessentials of maintaining healthy relationships with your carriers:a business plan between the agency and company, planning with yourcarriers for the coming year, making company commitments andmanaging the entire process. With great loss ratios and greatproduction, you can negotiate with carriers for higher commissionsand bonuses. Finally, send carriers only business that fits theirappetites. Don't waste your time or theirs.

7. Conduct effective agency sales meetings. Follow up youragency sales meetings with individual meetings with producers andsales managers, stressing their accountability. Talk about recentsuccesses, failures and discus how to improve outcomes. Reviewnew-business activity and the number of new prospects. Conductsales meetings with producers, marketing meetings with agencypersonnel and placement meetings with agency staff and insurancecarrier personnel. Have a formal agenda and designated time foreach meeting.

8. Set goals. The last step of the review involves setting goalsfor the year ahead. Review the goal items and create a "to-do list"for producers. Demonstrate how to set goals using a formal process.Look at every account and the probability of renewing it. Reviewtarget lists from carriers and match them to your prospectlists.

Prioritize prospects and clients based on relationships and yourchance of success. Segregate accounts by class or SIC code so youcan manage quick changes within the marketplace. Each agency ownerand producer will have to create his or her own plans. These plansshould be compiled into an agency goal and shared with each carrierto provide accountability for your performance.

This eight-step checkup should help you improve your agency andits performance. It also will enhance the value of your equity and,should you decide to sell, increase the sales price to theacquisition shark. In any event, you will be better after thisprocess than you were before. It's an exercise in which we all needto take part annually. Good luck and good selling!

Tom Barrett, CIC, AAI, is president of the Midwest andSoutheast regions of SIAA Inc., a partnering of 1,400 agencies. Tomalso serves on the national faculty for Dynamics of Selling, theMarketing and Sales Ruble Seminar, and MEGA Seminars for TheNational Alliance for Insurance Education & Research. For moreinformation on Dynamics of Selling or The National Alliance, visitwww.TheNationalAlliance.com. Mr. Barrett can be reached [email protected]