More effective insurance sales: You only work on referrals? Really
Often, producers will, with seeming pride, tell me 'Oh, I only work on referrals.' In theory, this is a terrific idea. In execution, it’s tragic.
As we coach insurance agencies and their producers to be more effective sales organizations and individuals, we share several core philosophies. One of the tenets of our approach is that sales is a transfer of confidence. In other words, you are always working to give prospects confidence that, by working with you, their business will get better results.
Of course, you can’t give away what you don’t have. You can’t make that prospect confident in you if you aren’t confident yourself. Therefore, it is critical to keep your sales confidence at a peak level.
While there are several factors that contribute to sales confidence, one of the most critical factors is to maintain a healthy pipeline. A healthy pipeline is one that has the right number of the right opportunities.
Not surprisingly, pipelines are more often a source of self-doubt than self-confidence.
What’s in your pipeline?
Maintaining a healthy pipeline is an almost universal challenge for producers. When discussing this challenge, we dig deep to uncover exactly what they are doing, or not doing, to keep their pipeline filled and healthy.
Often, producers will, with seeming pride, tell me “Oh, I only work on referrals.” In theory, this is a terrific idea. In execution, it’s tragic.
More about this referral-only approach
When I start to dig into how the producer is executing this referral-only approach, it becomes obvious that this is nothing more than them playing spin doctor with their prospecting efforts.
What it really means is they aren’t doing any prospecting or marketing and are satisfied with simply waiting for whatever comes to them. The resulting book-of-business profile is the tragic part.
When we analyze the typical book of business, we see that half of the case count only generates about 6% of revenue. Think about that. Half of their book’s business generates 6% of revenue, which means the other half generates 94%!
Those producers who sit and wait for opportunities to find them are going to have the worst-profiled books of business of all.
What if a producer got fired by half their clients tomorrow? If it’s the crap half of their book, it is one of the best business days they’ve ever had. If it’s the 94% half (please don’t tell my 9th grade math teacher I said that), their game is over.
Waiting is for fools
Quit waiting for crap opportunities to find you and go hunt down the opportunities that look like your current best clients. If you need a little motivation, here’s a look at the healthiest part of a producer’s book:
While the bottom half of cases typically only generate about 6% of revenue, the top 5% of cases usually generate 30% of total revenue. Doesn’t it make sense to intentionally seek out opportunities that look like those in your top 5% rather than sit and wait for more of those bottom 50%-ers to weigh you down even further?
Building a healthy book of business isn’t rocket science folks, but it also isn’t a waiting game.
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