I don't have to tell you that t's a scary time in our industry.I talk to agency owners every day who are afraid. There are a lotof insurance agency fears, but the scariest thing for most is theconcern over their ability to grow their agency predictably in thefuture.

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While the current changes and disruption the industry isexperiencing have caused the fear to reach a fevered pitch, thecircumstances driving that fear are nothing new. Until now, thefears have simply been ignored.

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You have heard me say many times, “The financial reward formediocrity in our industry has been way too high.” It's thishistoric financial reward that has allowed agencies to survive,even thrive, despite irrational reactions to (or avoidance of)their core fears. Unfortunately for many, with bonuses andcommissions being slashed, they are being forced to face thosefears and respond in, what for many, are very difficult ways.

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The cost of not addressing their insurance agency fears in ahealthier manner could carry the ultimate price of going out ofbusiness.

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Be honest, do you experience any of these fears? If so, how areyou responding?

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PROSPECTING FEAR

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I see agencies that are so afraid to pick up the phone that theypay outside firms to do their prospecting. This might be fine if itwas done effectively, but that is rarely the case.

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The high cost of this fear? Empty pipelinesand inadequate growth rates.

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Overcome the fear – Prospecting is the scariestand most difficult part of a scary and difficult job. However,producers are paid extremely well to do that scary and difficultjob and must be held accountable for performing. And, if you're notgoing to hold them accountable and choose to outsource theprospecting for them, then adjust their compensation accordingly.But don't even consider this unless you take the time to createclearly defined processes and messaging to ensure the effectivenessof the lead generation firm.

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REFERRAL FEAR

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Not only do we see agencies afraid to call strangers, we seeagencies afraid to call their own clients for referrals. It's notthat they don't see the value of referrals, but they are eitheruncomfortable asking or not prepared to do it successfully. Infact, agencies so clearly see the value of referrals that manyactually pay others (e.g., benefits agencies with P&C agencies)to bring them the referrals they themselves are afraid to askfor.

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The high cost of this fear? The high costhere is two-fold. The first is an opportunity cost when agencieswon't ask their own best clients. They lose the opportunity to puthigh-quality leads in the pipeline, and they lose the opportunityto enhance an already strong relationship (people really do likehelping other people.) The second is a literal cost. A one-timereferral fee would be fine, but we often see agencies paying newand renewal commissions to the referral source indefinitely; we'veseen the split as high as 50 percent!

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Overcome the fear – It is human nature that wewant to help people who have helped us. Your best clients are morethan willing to help you if you make it easy for them. Do a littleresearch to identify other businesses they know to whom you wouldlike to be introduced and simply go ask. If you will ask them forreferrals and make it easy by already having the list of who youwant them to call, you will get referrals. With a full pipeline,you won't have to worry about paying someone else to generatereferrals for you.

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RETENTION FEAR

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To me, this one may be the most mind boggling of all. We haveseen agencies who are so afraid of being able to retain an accountin the absence of the producer that they continue to pay commissionto the producers even after the producer leaves.

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The high cost of this fear? What wasprobably a marginally profitable account to begin with becomes evenless profitable.

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Overcome the fear – Make sure that every clienthas a relationship with the agency rather than with the producer.This fear doesn't simply manifest itself when producers leave.Because of this fear, agencies allow producers to remain overlyinvolved in the servicing of the account, which takes them out ofnew production activities and actually leads to a self-fulfillingprophecy of depending on the producer.

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PRODUCER FEAR

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We see agencies that are actually afraid of their producers; orat least that's how it appears. Why else would they not establishmeaningful production goals, make the producers accountable forhitting those goals, and get rid of those producers who are unableor unwilling to do the job they were hired to do? Why would theynot tie their compensation to the new business results they hirethem to produce, rather than rewarding them to sit on a book ofbusiness?

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The high cost of this fear? When agencyowners don't hold producers as accountable to their job (alwaysproducing new business) as they do others on the team, the cost isdevastating. The agency has no predictable growth, there is a lossof team confidence, the agency's reputation suffers, and profitmargins disappear (cost to service continues to go up even ifrevenue isn't growing).

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Overcome the fear – Reward the behaviors thatdrive the results you need. For a producer, this means paying themgenerously for new business (even more than what the industrytypically pays), reasonably for renewal business (way less thanwhat the industry typically pays), and over-the-top forover-the-top levels of new production. In the end, this is a modelthat is way more rewarding for your top producers.

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FEAR OF DELIVERING RESULTS

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We see agencies that are so afraid of their ability to deliverresults that instead of charging clients for new services andresources, they continue to pile on new services “for free.” If theagency knew they could use that new service or resource to bringmore value to their clients, they wouldn't be afraid of asking tobe paid more for doing so.

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High cost of this fear? Obviously, givingstuff away for fee results in a reduced profit margin. However,worse than that is the opportunity cost of not strengthening therelationship by bringing, through effective solutionimplementation, increasingly more value and results to therelationship. Your clients will find improved results somewhere; ifit isn't with you, it will be with your competition.

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Overcome the fear – Every new solution orresource is meant to address a specific need.

  1. Start by clearly identifying what that need looks like when itis present in the business of a prospect or client.

  2. Establish the questions you will ask to help the prospect orclient see that they are struggling as a result of that need.

  3. stablish a plan of implementation for your new solution orresource to ensure the need is addressed successfully and thatimproved results are delivered.

I get the fears

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I totally get how truly terrifying these fears are; I understandhow difficult it is to bring this kind of change to your agency.But, you have no choice. If you don't face the fears, if you don'tbring the change, you are on a dead-end path.

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Change is extremely difficult and we typically don't changeuntil our current reality becomes scarier and more difficult thanthe change itself. If you haven't been honest with yourself yet, Iwill tell you that you have likely reached that tipping point.

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