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Turn Up the Heat

Some sales reps have forgotten the basics of selling. Brush up on the fundamentals.

By Troy Korsgaden

To move forward and capitalize on the multiline opportunity, you must first leverage your current book of business. You may have an agency with 500 or 5,000 households. In either case, you must firm up your current book of business before planning ahead. The multiline agency that has any customer base at all can quickly grow into a protection and accumulation dynamo. However, many agencies are spinning their wheels because they have failed to get a complete handle on their business.

With summer in full swing, it’s time to turn up the heat in your own office. You need to map out a strategy to build a strong foundation for your future growth. Here are a few steps to take.

The starting point is to take a proper profit-and-loss picture of your business.

Honest assessment
The starting point is to take a proper profit-and-loss picture of your business. This should include where you are now, where you were a year ago and where you would like to be a year from now. Answer the following questions to round out your profit-and-loss statement. This will get your thought process geared up to determine the steps you should take.

  1. How many households does your agency serve?

  2. How many policies-in-force does it have?

  3. Penetration—How many product lines are in each household?
    Do the math. Divide your total number of policies-in-force by the number of households served. The typical answer is around two. If your answer is three, you’re doing great. If it’s four, you are running an awesome agency.

  4. How many full- and part-time employees do you have?

  5. Is your market upscale, middle-income, low-income or a combination?

  6. What expenditures do you have by line item? For example, list your payroll, rent, marketing expense, insurance costs, etc.

Here are other areas to consider:

  1. What are your profits per policy served?

  2. More important, what is your profit per household served?

Once you have determined where you are, you will want to assess where you were a year ago, using the same information. Have you made any progress from a year ago or are you laboring under the status quo? You will then want to look forward one year—using your current benchmarks. You can then make assumptions and create road maps to help you achieve your current goals.

Reduce costs
Stepping back and looking at your business on paper makes it easier for you to trim the fat. Redundancies and waste are often found when an objective eye can focus on the bottom line. You do not need to hire an expert to look for common-sense measures to reduce your overhead. Just remember that any cut you make should not be something that would affect your marketing momentum or your customer reach.

Revenue builder
Look for ways to build revenue in your business. This can easily be accomplished by making a few small changes with a focus on adding additional lines in each household. Areas like financial services, life insurance and health insurance typically offer the greatest potential. Your customers already know and trust you, and it is profitable for you to add more lines to existing households. Generally this adding of lines does not increase the need for more employees. You know the old saying: “Same customer—just gain more of their spendable dollars.”

In our agency and through our consulting work, we have found that creating efficiencies with current support staff frees up time for them to focus on adding additional products to existing households. It is amazing how many redundancies there can be in a multiline operation. So it may be time to assess your current office systems. Are there more efficient ways of completing daily, weekly and monthly tasks? Our office has developed simple methods to help us continuously focus and create new efficiencies in our operation. We have been able to transfer these efficiencies and systems to assist other agencies. Get your staff involved in the process by brainstorming. Pick a day for your team to focus on this very important area.

Now set your plan in action, and soon you will enjoy the fruits of your labor. Share any positive findings with your staff and ask them to help you leverage what you have so that it can create a better future for the entire team.

Twice named “Agent of the Year” from among 14,000 Farmers Insurance agents,Troy Korsgaden has trained nearly 40,000 insurance agents and staff. He is a member of NAIFA-Sequoia in California. For more information, call 800-524-6390 or go to

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