By Susan Toussaint, cofounder, WorkComp Advisory Group

As an industry we look for sales professionals who are bright, articulate thinkers. We groom them for success by sending them to insurance school, encouraging higher learning and the pursuit of designations. We mold producers into people we’d want to do business with if we were buying insurance.

So why do our efforts to create successful producers often end up creating reluctant producers?

A reluctant producer is someone who has capabilities but lacks the chutzpah, enthusiasm, judgment, or desire to overcome the obstacles standing in the way of success. We will explore five areas of producer reluctance in this two-part series.

Cold call reluctance

Ask producers which activity they dislike the most and you’ll find the usual answer is cold calling. For many it seems like a demeaning, ineffective way to initiate a new business relationship. Yet research conducted by Expertise Marketing and LawMarketing.com in 2006 indicates that of 30 possible marketing tactics for service firms, the most effective included cold calling.

Why is there such reluctance to buckle down and dial for dollars? For many it’s simply because producers don’t know what to say. They psych themselves up for a four-hour telephone marathon and become discouraged after a few hang-ups or “no thank you”s.

How do we take a strategy that requires patience, tenacity and time and make it more palatable? The first step is planning. Success requires planning, and planning requires a process. Here is a three-step process for cold-calling success.

  1. Create your value proposition. A clearly defined value proposition will give you a road map for conversation.
  2. Do your research. Know enough about the suspect to ask questions and share applicable industry knowledge (targets don’t become prospects until they are within three weeks of signing with you).
  3. Write and practice your script. You should have at least three scripts outlined and well practiced: one for voicemail, one for the intended suspect and the third for getting past the gatekeeper.

Large account reluctance

Most producers enter the industry cutting their teeth on house accounts and then move to selling and servicing lower revenue ($500 to $1,500) accounts. This can cause them to fall into the trap of taking any business regardless of its profitability for the agency.

Read related: “Successful prospecting goes beyond the numbers game.”

The rationale we frequently hear is that the young producer needs the practice and the best way to get that practice is by working on all opportunities. Unfortunately, practice becomes habit, and habits are difficult to break. While there are benefits to working on small accounts when starting out, dangers outweigh the benefits. Dangers include:

  • Over-servicing: First, what can you really do improve the outcomes for a client who generates under $1,500 in revenue? Fast-food accounts should be serviced by a fast-food team. A producer’s time is too valuable to spend on smaller accounts.
  • Lost opportunity: Time spent servicing small accounts leads to lost opportunities in researching and developing relationships with larger, more profitable prospects.
  • Fear of letting go: Producers tend to become attached to their first “relationships” and are reluctant to let go of accounts once a relationship is developed.
  • Self doubt: After working on small accounts, producers have difficulty transitioning to larger, more complex accounts. If we expect producers to work on more challenging opportunities, we need to start them on large accounts early in their careers under the guidance of more senior producers.

Fees reluctance

What value do you bring to your client relationships and how do you put a price tag on it? That’s a question that gets a lot of attention, especially with declining premiums and the current economic conditions.

“Fees” is a four-letter word to many producers and agency owners. Not because they don’t recognize their own value, but because they’re afraid that clients can’t or won’t pay for it. How did we get to a place where charging to improve the outcomes for our clients is a bad thing?

Three factors cause fee reluctance:

  1. Competition: My competition is doing it for free, so I have to. This thought can cause us to work our way down the profitability ladder just to get new business. It’s a dangerous strategy that weakens the agency’s brand and value, and it usually occurs when we aren’t clear about how our capabilities are going to improve outcomes for prospects.
  2. Past behavior: As an industry we’ve reinforced negative perceptions about fees with questions such as, “If we give it to you for free, will you come with us?” This “value-added” approach has proven fatal for many agencies. Free is never free, not for the client and certainly not for the agency trying to keep employees and profit margins. When we offer our services for free, the client doesn’t appreciate them and our resources are depleted by trying to implement processes and practices that haven’t been linked to a client’s goals and objectives.
  3. Fear: Intellectually, most producers understand the concept of charging for value. Emotionally just as many producers are afraid that they will overcharge and under-deliver, leading a client to say “What am I paying for?”

Why have we become so fearful of setting fees? Primarily because we are so comfortable with carriers defining our value in the market place through commissions. Unfortunately, carriers don’t take into account the real needs of the employer and what is involved in addressing those needs in order to improve the client’s business.

Next week, we’ll examine why producers are afraid to walk away from suspects that just aren’t going to work out and the fear of cross-selling. In the mean time, conquer the fear of cold calling by writing your value proposition into three telephone scripts – and start calling.

Susan S. Toussaint is the co-founder of The WorkComp Advisory Group, a sales training and consulting organization that works with agencies to leverage technical knowledge and sales strategy into successful new business development. Contact: susan@myworkcompadvisor.com or 888-496-1117.