Operating philosophy is the key. These agencies believe they are the best in their market and they want to do more than maintain their position–they want to expand it. So, embedded in their philosophy is that they have many great clients and they are anxious to target and take many more of them away from their most formidable competitors.

Since they believe they are the best, they act like it. They invest in services they can successfully provide to their clientele. Those services create customer loyalty, leading to higher retention and providing differentiation to the producers.

They all have adopted the “Million Dollar Producer” concept, which means the goal is pretty clear–do all that you can to become a Million Dollar Producer, excuses not accepted. This leads their producers to double their books of business in three years with half as many accounts rather than twice as many.

This simply means that their producers are using their time and resources better and the agencies' time and resources better, enabling them to keep the growth pattern going rather than hitting a plateau too early in their career.

No surprise to anyone anymore is that these agencies strictly follow the 80/20 rule. That is, the top 20 percent of a producer's accounts create about 80 percent of their revenue. That also means the bottom 80 percent of a producer's accounts make up about 20 percent of their revenue and a heck of a lot of work.

In the accompanying table is some real data to make the point. Here's how I interpret what the numbers say.

o For Agency 1, using the 80/20 rule, we break it down like this: A producer has 75 accounts on average–the top 20 percent is 15 accounts and the bottom 40 percent is 30 accounts. These producers could replace all of the revenue in the bottom 40 percent of their book (30 accounts) with only two new accounts that equal the average size account of the top 20 percent.

o Agency 2 producers would only have to write 1.03 accounts that equal the average size of the top-20 to rid their books of 75 accounts in the bottom 40.

o Agency 3 producers would have to write less than 1.5 accounts to replace 45 accounts.

Let's talk about this from a producer perspective. Your growth-oriented guys will say, “How fast can I get rid of all of these small accounts? They are killing my productivity!” The non-growth producer will say, “I don't have to touch this stuff. My CSR does all the work and I still make the money. So why should I get rid of it?”

Of course, that is precisely why their CSR is not spending more time helping them overserve the top-20 accounts, and the non-growth producer has relegated himself to an overpaid service person.

Back to the big picture! How do you successfully merge an acquired sales team in with the rest? You better have a philosophy that helps producers make more money faster by retaining their best accounts better, getting better prospects faster and writing bigger accounts quicker. If you don't have the vision, the philosophy, the concept and the plan, you could be doomed.

In my work with agencies and particularly those acquired, some have too many small accounts that don't make any money but keep everyone feeling busy and falsely productive. That's why oftentimes they have very little or no growth.

The best agencies I've seen at merging sales teams successfully put this concept right out there for the producers coming in. Only the foolish producers can't see the forest for the trees and fight to hang onto all the small accounts that make a lot of work and very little money.

These agencies then help the sales team acquired put the bigger accounts on written service timelines with the intent to overserve those best accounts, making renewals a non-issue.

They believe heartily in leveraging those best accounts for introductions into other big accounts and taking them from the incumbent broker. So they have processes built into their sales meetings that go beyond mere talk, and get down to tactically assisting and driving these introductions, leading to new sales and new revenue of quality, larger accounts.

Back to the primary question: How do you merge sales teams together and get them working as a team to help each other grow? You'd better have a philosophy that is a logical platform and that all can and will buy into. What I described above is what I have seen the better agencies do.

It's great to have a philosophy, but how do you get it integrated into the newly acquired agency? It starts with leadership, migrates into a plan and is executed by a few well-chosen, highly-trained experts we call sales managers.

A logical next step for the sales manager would be to help both his existing and newly acquired sales team set goals in three time frames–30-year, three-year and one-year.

The best agency managers don't take goal setting for granted. Doubling your book of business in three years with half as many accounts is a concept. The next step is to make that concept real on an individual basis. I recommend doing that with a 30-year timeline exercise.

I'm amazed at how many producers are practically living from hand to mouth even though they're making $200,000 a year. It's interesting that many are not socking away that much for the future because they can't afford to. Knowing that motivation comes from both avoiding pain as well as gaining pleasure, I want to get as much pain in their face as I can.

If you want to motivate your producers, bring them together as a team, then get them thinking about their future and all the needs they will have that, if pre-funded now, will make them a whole lot easier.

Start off with a 30-year timeline exercise to get them thinking. This will create some pain for most of them. Have them draw a horizontal line and break it down in 10-year segments. Above the line on the left side of the paper have them list all of their family members with ages. Then start listing on the timeline the major expenses coming up in the future for each person of the family that hasn't yet been fully funded.

If you've got more chronologically mature producers that have all their children out of the house, get them to think about the cottage or second home that they've told their spouse they couldn't afford. Put a number on that one for them.

The point is simple: Get them thinking about future needs that with some planning, a growth strategy and a little effort they could take the burden out of the future.

There is a lot more to goal setting, sales meetings, cross-selling and mergers than merging sales teams together, but this is a good start.

Randy Schwantz is president of The Wedge Group in Argyle, Texas. He is the author of “The Wedge: How To Stop Selling and Start Winning” and “Breaking The Sales Barrier: How To Develop Million Dollar Producers,” both published by The National Underwriter Company, parent of this magazine. The books can be purchased online at www.NationalUnderwriter.com.

“Only the foolish producers can't see the forest for the trees and fight to hang onto all the small accounts that make a lot of work and very little money.”

Randy Schwantz

For Table:

Flag: Do The Math

Head: Slight Shift Boosts Profits

Caption:

It only takes a couple of key accounts to replace the revenue of a producer's smallest clients, while cutting service costs dramatically.