A continuing soft market is putting pressure on sales staffs, which struggle to meet their production goals. To help their producers, agencies are increasingly asking me how they can create a marketing and sales system, often called a customer relationship management (CRM) system. Agencies want to systemize the marketing process, so producers can concentrate on prospects who are ready to buy.
Before we look at the components of such a system, let's define some terms. Marketing is the process of identifying prospects and cultivating relationships with them, so a producer can get that first appointment. The sales process then moves a prospect from that first appointment to a buying decision.
Successful selling takes more than natural talent. It usually also requires a marketing and sales system that provides a disciplined, organized approach to the selling process. To grasp how a marketing system works, first consider your own approach to marketing and selling. Whether you realize it or not, you already have a system.
Almost all selling can be broken down into these steps:
1) You identify prospects and obtain a policy expiration date.
2) You contact prospects 60 to 120 days before the X-date to get an appointment and provide a proposal.
3) If the prospect won't meet with you this year, you put the contact into a follow-up file and call next year at the same time.
4) If the prospect does meet with you, you begin the sales process. If you're unsuccessful but still want to write the account, you put the contact into your follow-up file and call again next year.
While the sales system can break down at any step, the most common point of failure is the follow-up required in steps No. 3 and No. 4. Producers are often charged with the responsibility for follow-up but many drop the ball with prospects not yet ready to buy. The reasons for this failure include:
–They don't like to handle follow-up tasks. Many producers are great at prospecting, presenting and closing, but they don't like writing letters or making phone calls. They see follow-up activity as something that takes time away from selling, so they avoid it. Naturally, they prefer to work with people who might buy today, not tomorrow. They'll worry about other prospects when their expiration dates get closer.
–They're too busy. Many producers are focused on short-term opportunities and believe they can't spend time cultivating long-term relationships. They move from crisis to crisis, putting out each day's "urgent" fires. Long-term activity takes a distant backseat.
–They're not well organized. Some producers allow tasks to pile up and have no reminder system for getting back in touch with prospects. They may have a suspense or diary system, yet always seem to be running days (or weeks) behind their reminders.
–They leave the agency and no one continues their efforts. When a new producer takes over, prospects the prior producer was cultivating are frequently dropped. The prospects may still be cultivated, however–by the prior producer, at his new agency.
–There is no formal plan. Most agencies have not developed formal plans for marketing and sales. They leave the details of finding and cultivating prospects to producers, who attend to them as they see fit. Even if the agency has a plan, it's not always managed daily to ensure it's followed.
What are the results?
–A few prospects are well-cultivated, according to the individual producer's personal strategy.
–Most prospects are poorly cultivated.
–Only a small percentage of the agency's prospects ever become accounts or, if they do, achieve their income potential.
To improve on such dismal results, an agency needs an effective marketing system. Such a system has five components: prospect management, opportunity management, campaign management, submission management and results management. Each component must be included if a system is to be as effective as possible. Let's consider them separately.
–Prospect management: Prospect management is the process of finding the right prospects, gathering details about them, and tracking that information for use in your marketing efforts. This process ranges from targeting a list of names on the Internet to determining what types of accounts a particular insurance company wants to write.
Prospect management is all about information–gathering it and storing it for future use. The type of information will depend on the type of account you're working on, and whether it's personal or commercial lines. The next step is sorting the information you gather, so it can be retrieved and analyzed quickly and easily.
–Opportunity management: Opportunity management helps answer the question, "Do I really have a prospect?" In prospect management, you identified a lot of prospects that fit your criteria. In this phase, you begin asking more detailed questions to help you determine which ones to work on first.
Most producers already have a set of qualifying questions to ask prospects. An opportunity management system captures and maintains the answers to these questions. Each agency (even each branch or location) might have a unique set of questions for the initial prospecting process. An opportunity management system should have the flexibility to customize these questions and record the resulting scores. This information is tracked as part of the prospect information file.
–Campaign management: Once you've identified prospects with a high likelihood of closing now, campaign management is the next step. But what should you do with the prospects you're not working with today, but want to work with next year or the year after that? A properly constructed campaign management system will enable you to build relationships with such prospects over time.
Many agencies manage their prospects by putting reminders in their contact management systems, prompting them to call a prospect three to four months prior to the next expiration date. The problem is that if you don't stay in touch in the meantime, your prospect may have long since forgotten you by the time you get in touch. A good campaign management system maintains contact with prospects without requiring producers to do all the work themselves. While the producers are concentrating on prospects who are ready to buy today, the campaign management system quietly continues to build relationships with prospects in the pipeline. This provides the producers with a steady stream of prospects moving toward the sales process.
–Submission management: Good submission management consists of creating effective submissions, delivering them to underwriters efficiently, tracking the submissions' status at different carriers and tracking the submissions' final disposition.
A unique aspect of selling insurance is that the agent must make two presentations for each sale. Only after "selling" the underwriter on the account is a producer free to make a presentation to the prospect. Needless to say, it isn't always possible to make both sales, which can make life frustrating for producers.
–Results management: The above practices are of little use without a method for tracking results. Without one, an agency cannot know if its marketing system is working. And by "working," I mean generating revenue.
An agency should be able to easily produce a snapshot report for each producer, showing year-to-date results. This report should show the close ratio, the appointment-to-proposal ratio, the number of referrals received, the results of those referrals, etc. The report also gives the sales manager a projection of how much a producer will produce by the end of the year, based on the year-to-date performance and the number of prospects in the producer's pipeline. The report discloses problems, enabling the sales manager to take corrective steps immediately.
An agency must be able to measure the results of every marketing campaign. This report should show marketing costs versus commissions earned. It should also project how long a client is likely to stay with the agency and the account's lifetime value.
With each of these five components integrated into your marketing system–and a commitment to work the system–increased sales are almost guaranteed. Nothing happens until a sale is made–and a sale isn't made until a good marketing and sales system sets the stage for it.
Steve Anderson, CIC, has been a licensed insurance agent for more than 25 years. He is editor of "The Automated Agency Report" (www.taarreport.com) and helps agents maximize productivity and profits using technology. He is also a member of The National Alliance national faculty. He can be reached at steve@SteveAnderson.com or www.SteveAnderson.com. For more information on The National Alliance, visit www.TheNationalAlliance.com.

Special Reports /

Strictly Sales: Creating an effective marketing system

Related Stories

Recommended For You