Want happy clients and higher income? Here’s how
Break free of your carrier-focused structure and instead bring value and real impact to your clients, and you will find that you can have it all.
We all know that as consumers, we want three things: fast, cheap, and good. Of course, just because you want it all doesn’t mean you can have it all. As the saying goes, you can have any two, but not all three.
- You can get it fast and cheap, but it won’t be good.
- You can get it fast and good, but it won’t be cheap.
- You can get it cheap and good, but it won’t be fast.
Have you ever considered this from the perspective of a business owner looking to build his business instead of as a consumer looking to make a purchase?
Insurance agencies and producers want similar things and are trying to have them within the constraints of the traditional industry structure. Yet within this structure, they’ll find that they’re limited to choosing two of the following:
- They want to grow their business fast.
- They want great financial returns.
- They want to provide a quality offering.
The possible combinations
Some choose to build business fast with great financial returns. These producers and agencies are quote machines throwing activity against the wall and scraping off as much commission as possible. The problem is, this isn’t a quality offering from the perspective of their clients.
Some choose to build business fast and deliver a quality offering. These producers and agencies acquire as many “value-added services” as possible and give them away in an attempt to Differentiate themselves. They may grow fast (think Zenefits), and the client is likely to perceive this as a higher quality offering. The problem with this combination is that the agency erodes any existing financial returns because of the investment in the free giveaways, which are often not even used and are really more of a sales tool than anything else. In this situation the prospect’s initial perception of higher quality does not prove to be reality.
Some choose to focus on creating great financial returns for themselves while delivering a truly quality offering to their clients. These very rare producers and agencies recognize the real value their “value-added services” can deliver. They take responsibility for the implementation of these services to ensure that the potential value becomes recognized value. Instead of giving them away, they actually charge a fee. Of course, they aren’t charging a fee simply for access to the things others give away; they are charging a fee for the results that nobody else delivers. The pairing of these two aspirations makes for a powerful model. However, while this approach generates great results for both the client and the agency, most agencies never get there because it typically takes too long to build this model and they give up too soon.
Traditional structure is holding you back
So what’s the answer? Well, for those of you who are paying attention, I already hinted at the answer. As I said earlier, these problems exist only for those who “are trying to have them within the constraints of the traditional industry structure.”
For those who are willing to break free of the traditional industry structure, you don’t have to limit yourself to choosing two of the three options; you really can have it all.
The traditional industry structure (i. e., how most agencies operate) limits us by defining the choices as:
- Fast – Quoting insurance products for as many prospects as you possibly can.
- Financial rewards – Finding the carriers with the most generous commission schedule.
- Quality offering – Promoting service (i.e., fixing problems associated with the insurance product) as a differentiator.
Despite how hard you try to convince yourself otherwise, the traditional industry structure focuses on the relationship between broker and carrier. Look at these bullet points again. Even the service piece exists only as an extension of the carrier product. Most agencies, without really thinking about it, tie all of their answers for “fast, financial rewards, and quality offering” directly to the insurance product.
It’s time to break free
However, if you are truly committed to meeting the needs of your clients and in turn your needs as a business, you must tie your answers for “fast, financial rewards, and quality offering” directly to the results your clients need you to deliver.
Break free of your carrier-focused structure and instead focus on bringing real impact and value to your clients, and you will find that you can have all three. The new definitions in a healthier, agency-controlled structure:
- Fast – Instead of being a quote machine, have a systematic sales process focused on helping your clients make better buying decisions, and you will grow your business faster. When you are leading a buyer to a better decision, he or she will want to get there as quickly as possible.
- Financial rewards – Instead of allowing the carrier’s commission schedule to determine your value, have enough confidence in the value you deliver to control your financial rewards through client-paid fees. Every business owner will willingly pay for results that make the business more successful and results more predictable.
- Quality offering – Instead of waiting for problems related to the carrier’s product to happen, expand your Point of impact beyond insurance into non-insurance solutions (communication, employee engagement, attraction/ retention, etc.), and your offering will become more and more desirable.
You see, when you decide to break free of an industry past that has left agencies and producers with little effective control, not only can you choose all three, but you will see that all three should naturally exist together.
It’s time to get selfish. It’s time to choose “all of the above.” It’s time to become the feared competitor in your market.
A version of this article originally appeared on Rough Notes, March 2015.
Photo by ID 26878317 © Marcel De Grijs.