For a $140 billion industry, insurance brokers and consultants sure don’t think very big. And it’s small thinking that is causing and maintaining the current state of the independent agency.
I hear a lot of ideas shared in industry publications and presented at industry gatherings, and I’m continually amazed at the thinking that doesn’t seem to go beyond incremental changes, and far too frequently the ideas come back to being about product (someone else’s product) and whining about fairness and carrier commissions. This is defensive thinking.
Defensive thinkers fear for the life of their business and their livelihood and make small moves to maintain the status quo as best they can, thinking that rocking the boat will tip it over. They think about minimum levels of change simply to save themselves and eek out what they can to stay afloat. They chase revenue with new products, regardless of how those products may or may not fit with their value proposition. They’re not in control of their products or their business and they’re likely exhausted.
However, when your industry and/or business are facing a crisis of extinction, a defensive posture is just simply not enough to maintain and grow a business. Instead, you need to focus on how to fundamentally change your business operations and the relationships you have with your clients (your value proposition). This is offensive thinking.
Offensive thinkers also fear for the life of their business, but they recognize that the way it’s always been is certain to end one way or another. To maintain and grow their business they instinctively feel that an unknown future is far less nauseating than watching their business dissolve around them. They look for bold new ideas that send them down a potentially new and uncertain path. They feel there is no choice but to begin running their business like a business and change their value proposition, because without making those changes, the end is just a matter of time.
Go on the offense and run your business like a business
It’s far too common that we see sales people solely focused on building their book of business. And then one day they look around with the holy-crap realization that they have a business and they don’t know how to run it. And now is the time to learn how to run it like a business.
It’s time to stretch yourself well outside your comfort zone and get comfortable with discomfort. Yes, you need to learn new skills, create processes, instill accountability and coaching into your operations, think about your culture, manage and engage your team members, get picky about your clients, and create a vision for the organization. You may not want to do these things, but this is what it takes to run a business. It’s your choice.
It’s also time to recognize that no one owes you a living. That’s all on you. Not congress, not the carriers, not your clients. We’re a free-market industry in a free-market country and we all need to act like it and stop whining, asking for someone else to fix our business through some governmental form of entrepreneurial welfare. It’s time to take charge and play offense instead.
Take control and play offense with your value proposition
Your value proposition is the promise you make to your clients. When a prospect agrees to hire you, what promise are you making to help them improve their business? What value are you going to deliver to them over the course of the relationship?
When your value proposition ends with someone else’s product as the main show, you’re running your business on borrowed time. As soon as the relationship you have with that product provider changes, or the competitor gains access to it or to something similar, you’ve lost your value proposition.
However, an alternative value proposition that puts you in control is shifting from being product sellers to being in the advice and results business. This industry is filled with smart, educated people who have been consulting with their clients for a long time and gather scads of information from clients every day. But I don’t see this being used effectively and instead it’s far too often just written off as “part of what I do.”
If you pay close attention to all of this information and document what you’re learning, then you can go out and apply the ideas from one business to another. That is advice and consulting. And that should be the basis of your value proposition. Sure, you need products as well, but your ideas, insights, and advice should be at the core of what you’re selling because you deserve to be compensated for it, no one can take it away, and it puts you in control of your own business. It’s time to play offense.
Expand your thinking: 5 offensive strategies to save your agency
“I won’t do something I haven’t done before.” Does that just sound insane? Of course it does. But this is the attitude of way too many in the industry. It’s pretty sad to watch all the opportunity available and then to watch how many people instead seemingly use this as their mantra.
Agencies in particular require that change be forced upon them in order to make changes. I highly recommend you consider this point in time as your new forced change and take the steps to change your operations and value proposition. Start playing offense today with these 5 business-building moves.
- Hire a business consultant. Hire someone from the outside to analyze your business looking for gaps and inefficiencies. The engagement should include a verbal discussion, an analysis of operations, and a written plan outlining inefficiencies along with recommended changes. The analysis should cover your book of business, agency processes, use of time, role of leadership. Continue your education by reading business books to learn management and leadership fundamentals to successfully execute on the recommended strategies.
- Learn what your state regulations are for charging fees. Can you charge fees within your current structure or do you need to make adjustments? Perhaps you need to start a separate consulting business? Do your own research and consult with an attorney to determine your plan for being a consultant who charges fees for your intellectual property and contributions. Know the rules for combining fees and commissions because this is how revenue is going to flow from now on.
- Document your business strategy. Describe your business today and outline the future of your business, and then use this as your guide for all business decisions. Create detailed plans for making changes to your organizational structure and processes to meet the future vision. Meet with your leadership/implementation team at least twice a month for accountability on progress made toward your changes. Don’t know how to write up the necessary plan? Send me an email and I’ll share our Insurance Agency Business Strategy Workbook with you.
- Document your client development plans. Create a value proposition that expands beyond products and includes your team’s ideas, insight, and advice. Determine fee levels for what that insight would be worth to your clients (you will likely need to make adjustments to this over time). Promote this value by creating and delivering a 3-year plan for each prospect at plan presentation. Include your analysis of their situation (2 – 3 paragraphs) and follow it with your recommended actions and timeframe for each. Review with your client at least once each year. (Sound similar to the Business Consultant ideas above?)
- Join a group to constantly push your thinking. Without new ideas, you’re simply doing what you’ve always done. Push yourself and get comfortable with discomfort and accountability. Gather a small group of agencies (local or national) and hold monthly discussion sessions. Each agency should report on progress made, share one idea, and pose one question for the group at each meeting. Everything should be open for discussion, challenging, and accountability to make everyone and their ideas better.
We need to be thinking bigger as an industry to solve the current precarious situation of independent agencies. And with a target on our backs from some of our political leaders, this is more critical than ever to start owning it and playing offense with our business strategy and changes. No one else is sitting around thinking about how to make agencies relevant. We’re the ones that truly care enough to make it happen and we need to take on that role for ourselves, our team members, and our clients. America’s businesses depend on us to make that happen!