Teamwork Transforms Good Agencies Into Champion Performers

Why? It's because they have not come together as a team to rise above the common challenges that inhibit the growth of most agencies.

What are the challenges holding back good agencies?

If you own, run or work for an agency, then you know the external challenges that confront your business the return of the soft market, competition from banks and other financial services entities, consolidation within the industry, and the fact that the big accounts you want are already handled by your competitors, to name a few.

Add to this the internal sales and management issues that your agency is always grappling with, project it forward for the next three-to-five years, and you can see why your revenue, profits and value are likely to erode unless you do something about these challenges.

Some agencies have risen to the occasion, growingly rapidly into profitable market leaders regardless of external factors. At some point in the course of their business, and without any radical changes in the way they operate, they have turned a corner and started achieving significant growth.

In the more than 10,000 hours I have spent talking to agency principals, producers and staff, I have found five common challenges that, when overcome, can turn a good agency into a high achiever.

o No Clear Vision

Most agencies are run by top-performing producers, not by strategic planners or professional managers. In many cases, an executive was handed the baton one day either because he or she was the strongest producer, or owned the greatest amount of stock, or had waited their turn to become president. Upon taking office, the new president had a book of business as well as a slew of employees to manage and motivate.

As a result of this situation, the president never sat down with top management, planned out a three-to-five-year vision with a numerical growth goal, and received a buy-in from the senior troops and support staff. Even if the president got this far, there likely was no step-by-step plan for execution.

This does not make the president a failure. It is the norm, and the agency can still survive in the black. But it does have an effect on the agencys growth, its ability to compete, and its value. Few if any agencies without such a vision and plan have risen to the top and stayed there.

o Defensive Sales Management

If you manage producers, you have a full-time job and then some. You have old ones and new ones, some who are incredibly successful and others who are not. You have big-account guys with high closing ratios, and other producers who will spend time chasing anything that moves regardless of its size or chance of being written.

As a result, you likely have not found enough time to create a legitimate sales plan. There is no business goal banner hanging on the wall for everyone to see, and no war room for strategizing sales calls and tracking deals.

Your sales meetings are probably monthly, and their agenda looks like that of a town hall meeting markets, success stories, problems and challenges, a motivating story, and a complaint session.

Like the president, the sales manager is often a top producer or a significant stockholder, and is managing sales as a defensive endeavor, trying to keep things from falling apart. No surprise, then, that the agencys growth is typically acceptable but nothing to brag about. Producers make a decent living, but their capabilities are being underutilized. Moreover, because of this environment, turnover tends to be high among new producers.

o Mid-Level Producers and Small Accounts

Somehow, top producers always find time to produce $100,000 in new commission every year sometimes much more than that. But medium-level producers will tell you they are too busy. If you took a closer look at their book of business, you would find a lot of accounts. An average producer usually has a few large accounts, quite a few medium-sized accounts, and a lot of smaller ones.

I have heard such producers boast: "Yes, I have some smaller accounts, but I don't touch them. My CSR does all the work on them, and I make the money." Of course this situation leads to three problems.

First, paying producers for small accounts is generally a money-losing proposition for the agency. Second, because CSRs are so busy, they do not take the time to provide proactive service to the producers top accounts. And third, producers who are paid on rinky-dink accounts are more likely to take the easy path of writing more of them instead of focusing on large accounts that would create faster growth and more money.

o Unarticulated Competitive Advantage

In your next sales meeting, ask your producers to make a list of what they believe differentiates them in the market. Ill bet you that eight out of 10 will cite experience, markets, agency reputation, "our people," in-house loss control and claims service. Ask them, and see if Im close.

The problem with trying to sell on the basis of these traditional strengths is that you are saying the same thing that most of your competitors are saying. This becomes a major problem when you are trying to pick off a competitor's account. And why is picking off a competitor's account so critical? Because your agency's ability to grow, especially in the soft market, is dependent on your ability to prospect and win your competition's accounts.

If you don't know how to powerfully differentiate yourself from your competitors in clear, concrete terms, then you have little chance of reaching the summit and staying there for long.

o Unused Client Connections

Day in and day out, some form of quality prospecting is the life generator of every agency. Yet I have done hundreds of seminars inside agencies where I will get 20 producers together and ask them to raise their hands if they have asked any of their top 20 clients to introduce them to prospects. On average, only three people will raise their hands. The other 17 simply haven't done it. They usually have excuses like they didn't feel comfortable asking, or they didn't know how to go about it, or the right time never came up.

There is a goldmine of new revenue that is untapped because agencies do not ask their clients for personal introductions to their most desirable prospects. At top-performing agencies, clients are considered an asset to be leveraged, not merely a passive source of revenue.

To address these challenges, top-performing agencies take a team approach, involving everyone who has a stake in the business. How does your agency do this? You set a clear vision, with management and staff buy-in. Your sales people work together, pooling their knowledge to help each other land big accounts.

You insist that your sales meetings stay focused on specific new business. Your producers are trained in how to differentiate your agency to beat the competition. Your clients are leveraged for personal introductions to your top prospects. And your customer support staff is welcomed aboard the sales team, which becomes a unified sales and service force.

In short, good agencies become top agencies by organizing and inspiring a group of ordinary individuals to do extraordinary teamwork. Such agencies can out-compete the field of typical agencies that get by on average performance boosted now and then by a few superstar producers.

If you doubt this, let me leave you with a telling statistic from game five of the NBA finals. While Shaq and Kobe alone accounted for more than half of the Lakers' total scoring, all five of Detroit's starters scored in the double digits and the Pistons today are the reigning champions of the NBA.

Randy Schwantz is president and CEO of The Wedge Group, a sales training and consulting firm headquartered near Dallas. He is author of "The Wedge: How to Stop Selling and Start Winning," published by The National Underwriter Company. For more information, visit www.thewedge.net or call toll-free 1-877-999-9334.

Reproduced from National Underwriter Edition, August 5, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.