If I asked you what you do for a living, how would you respond?

If your answer revolves around the fact that you sell insurance, you may want to begin to rethink your answer.

Computers, call centers, and even smart phones can all sell insurance better and faster than you. But you already knew that. So, the better question is, “What are you going to do about it?”

The act of selling insurance is transactional. Selling insurance is also only one part of what the best insurance agencies and agents provide their clients.

It’s time for insurance agencies focus on what they do best and allow technology to support you, not work against you.

See, somewhere in the transnational world of insurance, many independent insurance agencies lost focus of what they do best… True risk advice and relationships

Guess what, you can’t provide true risk advice in 15 minutes, so why are you trying to do it? Too often I see insurance agents trying to play a game they can’t win, and even if they do win, they are often not satisfied, nor are they profitable.

So how can you begin to move from a transactional agency focused selling insurance to a relationship based agency focused on risk advice and relationships?

Stop Selling the “Old Way”

When I ask agencies and agents, “What is your sales process?” I typically receive blank stares because most insurance agencies do not have a true selling system.

In fact, even in today’s information rich world, most agents use the same selling system that has been in place for the past 50 years. It’s called the look, copy, quote, and pray selling system and it creates little value to your clients and no differentiation from your competition. Here is how it works.

  1. Look—can I look at your policies?
  2. Copy—let me copy what you currently have
  3. Quote—I will go to my markets and get you some quotes
  4. Pray—I pray my price is the best or maybe I’ll just get lucky

The reality is that if you work hard enough, you can do okay in this sales philosophy. However, it offers a poor return on your time investment and is dangerous from an E&O perspective.

As a true insurance professional, your job is not to provide quotes. Your job is not even to sell insurance.

If insurance is your only solution, you are a commodity broker. One of the keys to differentiation is the understanding that insurance is one of your solutions, not the only solution.

Your main task is to provide risk advice and build relationships. Selling insurance is the byproduct of your work, not your entire body of work.

To become a true risk advisor, you must be crystal clear on identifying your ideal client and the value you bring to your ideal client.

Create True Points of Differentiation

If insurance isn’t your only solution, what is the solution? How can you differentiate beyond selling insurance?

First, ask the question, “What makes us different?” There is a reason why the majority of insurance consumers say, “You insurance agents all look and sound the same.” It’s because it true.

WARNING: Most agencies try to differentiate themselves from their competition by saying the exact things their competition is saying. If I ask agencies what do you do that make you unique, here are the five most common answers.

  • We have great service
  • We have competitive rates
  • We represent all the best carriers
  • We are local
  • We have the best people

These responses create zero differentiation. Don’t use them. Stop it.

Outside of not being local (which usually means, we don’t really do anything, but we are across town if you would need us), which of these responses makes you any different from most of your competition?

You need to change the conversation from transactions and quoting insurance to risk advice and relationships.

What are some proactive risk services you offer your ideal clients.

Every agency has different services, but here are some examples of true risk services that can be differentiators for your agency.

  • Quarterly/semi-annual scheduled strategy meetings
  • Claims advocacy & pre-loss training
  • Safety & risk management training
  • Educational seminars (onsite/offsite/online)
  • Formal report to value audits
  • In-house claims manager
  • Verification and analysis of work comp experience mod
  • Defensive driver programs
  • Annual updated risk survey
  • Business interruption worksheets verified by CPA
  • Contract/lease review
  • Proactive certificate of insurance management

Your list may be completely different depending on the products and services you provide, but note that none of these examples are about insurance quoting. They are about value based services that help your clients financially and differentiate you from everyone else.

The Vital Few vs. the Trivial Many

Once you stop selling the “Old Way” and create defined points of differentiation, you can begin to focus your time and effort on your best clients and ideal future clients.

One of the reasons that agents tell me they don’t provide ongoing risk management and advice is that they are simply “too busy.” Every day is a crazy day answering the phone, returning emails, and putting out whatever fire is blazing.

My response is always the same, “Are you busy, or are you productive?” Busy has become a badge of honor today. We are consistently bombarded with catch phrases like, “hustle” and “grind.” I am 100% in favor or working hard, but too often, I see busyness being confused with production.

At my firm, the Sitkins Group, we have studied thousands of agencies and agents over the past 35 years and have found that there is always a predictive imbalance in the universe based on the 100-year-old Pareto principle. The 80/20 rule is very real today and vital that agents understand its significance. Here are a few examples for insurance agencies.

  • 20% of your carriers produce 80% of your commission
  • 20% of your clients produce 80% of your revenue
  • 20% of your effort produces 80% of your results

The 80/20 rule is not exact, but it is consistent. The bottom line is this, insurance agencies are spending too much time chasing the trivial many vs. focusing on the vital few.

For you to become relationship and risk advice focused, you must create the time to build those relationships and provide risk management services. That means you need to become intentional about your time, effort, and energy.

While every prospect and client can technically “buy” from your agency, that doesn’t mean they are the “right” prospects or clients.

Any doctor can provide a routine physical exam, but that doesn’t mean they all do them.

I don’t know of any highly paid medical specialist that is regularly providing routine physicals to any patient that wants one.

That’s because specialists understand their unique abilities and what effort produces the best results.

This is a hard concept for many agencies and agents to grasp. Not every opportunity is a good opportunity.

When you understand that your main job is to provide risk advice, you have unique points of differentiation, and you believe that your time is your most precious asset, you become more selective.

You also become more profitable.

Low Price Transactions Cost a Lot

If clients don’t value your advice, expertise, and relationship, what do they value?

You already know the answer… Low priced transactions.

That’s a game you can’t afford to play and long-term a game you will not win.

Instead, what if you focused your time, energy and effort on the top 20% of your clients and future clients that do value your risk advice and that also produce 80% of your revenue?

For the sake of easy math, pretend you have a $100,000 book of business and you focus on developing deeper relationships and implementing a clear value proposition based on risk advice with your top 20% of clients.

You become intentional about rounding out, retaining, and replicating these types of accounts.

At the same time, you begin to trade down half of the bottom 80% to an agent with a smaller book of business, your agency service team, or a carrier service center.

You could double the revenue on your top 20% of your accounts, $80,000 to $160,000, while losing half of the revenue from your bottom 80% of accounts with a net result of $150,000.

That is a 50% increase in growth while freeing up substantial time, effort, and energy.

This is a game that you can not only win, but you can and will dominate.

Digital Disruption Won’t Stop

I firmly believe that over the next several years the days of independent insurance agents selling transaction based insurance will fizzle out.

The things you currently are getting paid for (insurance transactions) will be replaced by the things you are not currently getting paid for (risk advice and relationships).

You get to choose the game you want to play.

Choose wisely.

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