Whether or not the pursuit of new revenue is killingyour potential for profitable growth is, in some form or another, aquestion that business leaders are (or should be) asking on anongoing basis.

It's no secret that new revenue doesn't necessarily translateinto profits or profitable growth. But often times the reasons forthis and the response to addressing this challenge areoverlooked.

The acquisition strategy

In the insurance industry, using an acquisition strategy todrive the growth of business and produce new revenue is commonpractice. Whether that strategy includes acquiring new salespeople,books of business, other agencies or all of the above, manyinsurance organizations look externally to increase revenue. Buthow profitable is that revenue? 

In addition to the actual cost of acquisition — nomatter what is being acquired — there are hidden and oftenunidentified costs that end up eating into profitability. Forexample, when an agency acquires another, most likely they willhave different systems and processes. This creates a serious drainon resources and a lot of waste.

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