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

AS MANY agencies begin dealing with a softening market, they focus on keeping their annual written premium at its current level, even if renewal premiums decrease. The following steps will help ensure your agency develops the fundamental processes needed to reach its goals.

1) First, know your numbers:

What is your hit ratio?
What is your average commission per account on new business?
What is your commission per account on renewal business? Has this number gradually increased over the last five years?
How many days are available for sales?
What are you spending to acquire a new account?
What can you do to change the numbers?

These basic numbers tell you where you are and what you need to do to change things. If you start pre-qualifying, and not just qualifying, your average commission should increase, and your closing ratio should be north of 75%.

2) Focus on how many days you have available for selling. Many producers say they don't have time to get out and make sales calls. They may be spending too much of their valuable time on servicing tasks, even though they have professional staff that can perform the work better than they can.

Look at it this way: You start out with 365 days available for selling. Subtract 10 vacation days, 12 personal or sick days, 10 company holidays and 104 weekend days, and you still have 199 sales days left. If you spend three days a week servicing clients, that's 150 more days gone, leaving you with only 49 selling days.

Say you have an income growth target of $75,000, a closing ratio of 25% and an average commission per account of $1,000. You need 75 new accounts to reach your target, which means (at your 25% close ratio) you must make 300 presentations. With 49 days for selling, you have to make 6.12 presentations per day to reach your target. Plug your own numbers in here and see how you come out.

Determine your 2005 commission income goals for both renewals and new business. Divide it by your average commission per sale to get the number of new accounts you plan to write. Divide by your targeted closing ratio, and you can determine how many presentations you have to make to reach your goals. By walking through this exercise, you'll see right away if you are on track to accomplishing your goal. By the time you read this column, the year will be 30% gone. Are you at 30% of your 2005 goal?

3) Identify your top 10 or 20 current accounts (your "A" list) and estimate the chance of renewing each one. For any that score less than 85%, immediately begin working with them to enhance your relationship. Consider following a specific commercial-lines renewal review process. This will include renewal review meetings and using questionnaires to find out how you are performing and to identify any problems.

Visit the "A" accounts three times during the year, plus the renewal visit. Visit the "B" accounts two times plus the renewal visit. Visit the "C" accounts only at renewal and mid-year. Get rid of the "D" accounts (service problems, claims problems-those that cost you profit-sharing money). Review your results monthly.

4) Take each account from your "A" list and create another list of no fewer than 10 prospect names that you can place under each account. If you have 10 "A" accounts and list 10 referrals from each, you'll have 100 prospects. Work these referrals diligently. For each of these prospects, list the account name, number of employees, potential commission, relationship with your current client, objectives in meeting and a deadline to have your current client make an introduction. Focus on developing relationships with your top 20 prospects and make sure they are "touched" at least once a month.

5) Identify the top five centers of influence in your community. You should meet each of these individuals at least once a quarter. Developing strong relationships with these players helps you open the doors of opportunity.

6) Pursue self-improvement. Become active in professional development programs. Attend a sales training course and develop an organized sales process that involves super-qualifying prospects and presenting solutions rather than selling on price. Work toward earning a professional designation such as the CIC, AAI or CPCU.

Thirty percent of your 2005 opportunity time is now behind you. Have you reviewed where you are and made the changes necessary to make 2005 a success? Remember, it's up to you, and your competitor is betting you'll get lazy so he can take your business away. Every top-10 client is also a top-10 prospect for someone else, so take this seriously.

Good selling!

Tom Barrett is president of the Midwest and Southeast regions of SIAA Inc., a partnering of more than 1,675 agencies. Tom also serves on the national faculty for Dynamics of Selling, Marketing & Sales Ruble Seminars and Mega Ruble Seminars for the National Alliance for Insurance Education & Research. For more information, call (800) 633-2165 or visit www.TheNationalAlliance.com.

Special Reports /

Strictly Sales: Maintaining your revenue in a softening market

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