2001 Best Practices Study

Analysis of Agencies with Revenues Between $5,000,000 and $10,000,000

R EVENUE G ROWTH

“Our owners are all responsible for new business development and their compensation is tied primarily to their sales. We practice what we preach to the production staff.” “A focus on beefing up our life and health sales in recent years has made a significant impact on the overall growth rate of our agency.” “We have continued to invest in additional sales talent and although several investments have not gone as hoped, the ones that have paid off have more than made up the difference.”

The Best Practices in support of revenue growth center on organic growth, but acquired business continues to play an increasingly important role. Best Practices agencies continue to focus on prudent and managed growth, recognizing that a service culture cannot exist until a sales culture has first succeeded. Above all else, these Best Practices agencies are in a constant mode of hiring and developing new sales talent. Beyond this, several other recurring characteristics emerge with these agencies: an extensive emphasis on cross selling, a dedicated sales manager (sometimes outsourced), extensive and ongoing sales training, a wide range of value-added and complementary insurance services, merit-based compensation (increasingly weighted towards rewarding new business development), niche and program marketing, and partnering with key insurance carriers to maximize referral sales opportunities.

T ECHNOLOGY U TILIZATION Best Practices agencies of this size generally have significant investments in technology that typically require significant oversight on the part of full-time technology employees generally not justified in smaller agencies. In a world in which technology changes continually and in which technological efficiencies are essential to long-term growth and survival, the larger Best Practices agencies are in a non-stop mode of improving and maximizing technology at significant expense. Unfortunately, uniform technical standards between agencies and insurance companies still remain a future hope, but Best Practices agencies still focus on those business practices that best take advantage of technologies currently available: carrier partners who have state-of-the art systems and procedures, interactive agency websites, agency Intranets, dedicated technology staffs, continual training and development, frequent system upgrades, extensive workflow planning, off-site access to agency systems, and a constant monitoring of the ways technology is utilized in other service industries.

“We have an employee of our automation vendor visit the agency 2 or 3 times per year to train and measure the utilization of our system.” “Requiring all employees, including producers, to use the system has been critical to our success.” “We have experienced greater efficiencies by steering our business to those carriers whose systems are easiest to interface with.”

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