More than 90% of commercial accounts will renew with the incumbent agent.

If producers become quoting machines, their closing ratios will be terrible. This not only wastes the producer's time, it wastes the agency's time, wastes the carriers' time and demoralizes the producer.

Here, five strategies for improving your closing ratio:

1. Prospect smarter

Improving a new producer's closing ratio begins with the selection of accounts to pursue. The idea is to look for accounts with the highest potential for closing. Here are some questions the producer should ask:

  • Do I have carriers that want the business and have products with the appropriate coverages and competitive pricing?
  • How many other agencies are aggressively pursuing the same accounts? What do they offer?
  • How many accounts are available in my marketing territory?
  • Is my agency adequately equipped for account service?

Takeaway: People prefer to do business with people they like. How can I like you, if I don't know you?

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(Photo: iStock)

2. Warm up cold prospects

Most new producers begin with cold calling. Although this is an undesirable method of prospecting, it's necessary for new producers who have no book of business. The chances of closing a cold prospect will be improved if the new producer gets to know the prospects long before asking them to buy.  If not, the prospect is being asked to buy from a stranger, and it should be no surprise that this results in a low closing ratio.

Drop in on the prospect one or more times in advance of the policy expiration date. E-mails and phone calls don't have the impact of a face-to-face meeting with a prospect. The objective is to begin establishing rapport and to gather information that will help determine the chances of writing the account.

Takeaway: The path of least resistance is for the prospect to renew with the incumbent agent.

(Photo: Thinkstock)

3. Develop individual marketing plans

It may be effective to drop in on selected prospects multiple times. During the initial visit, the producer can develop a marketing plan specific to the prospect. The objective of the initial visit is to determine the following:

  • Is this a desirable account, or should I walk away immediately? Even if the owner isn't available, can I gather information that will help me decide?
  • Does the owner seem to like my dropping in? Am I able to develop rapport with the owner? Has the owner indicated openness to moving the account?
  • Does the size of the account warrant the investment of my time and energy?

Based on the answers to these questions and the time remaining until the expiration date, the producer can now make a plan for future drop-ins. What does the producer talk about during these drop-ins calls? It can be sports, family, hobbies or the prospect's business.

Takeaway: One successful producer said he had dropped in on an account six times before making the sale. He was asked what they talked about. "Not insurance," he replied.

(Photo: Thinkstock)

4. Clearly establish the rules of the game

Weeks or months later, there comes a time for the producer to decide whether the time is right to move forward with the sales process. The producer needs to formally establish the prospect's agreement to:

  • Provide information regarding the current coverage, including the current premium.
  • Provide loss information.
  • Provide financial information.
  • Not share your work with the competition.
  • Have all the decision makers present at the final proposal.
  • Give you the business if you meet the prospect's requirements.

Takeaway: Top producers walk away from accounts when prospects won't agree to these conditions, and that is why these producers have closing ratios higher than 90%.

(Photo: Thinkstock)

5. Upgrade to referral prospecting

A better approach to prospecting, and one that will definitely improve any producer's closing ratio, is to do less cold prospecting and develop more referral business, because it's easier to get appointments with referrals and close referral accounts. Also note that retention is higher on referral accounts. Get more referrals by:

  • Asking for referrals when a sale is made.
  • Joining and aggressively using Business Network International and other networking groups.
  • Using LinkedIn to obtain referrals for desirable accounts, which gives the benefit of selecting the accounts in advance.

Takeaway: The client has paid a producer the highest compliment possible when a sale is made. Why should there be any hesitation to ask for a referral?

Kenneth L. Fields, MSM, CIC, CPCU, CLU, ChFC, is an assistant vice president of sales development with the Columbus, Ohio-based State Auto Insurance Co. He is also on the national faculty for the Austin, Texas-based National Alliance for Insurance Education & Research.

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