High expenses, high turnover, and low growth are the nightmares that keep agency managers up at night. As a company that has overcome these challenges, Baltimore Life shared its experiences with attendees of GAMA International’s LAMP meeting here recently.
By developing a new agency model, Baltimore Life says it has made some significant improvements in its growth, productivity, and profitability.
“We had the choice to cut agencies and close offices, or to find a better way to manage our agencies and expenses,” said Damien Salvi, a vice president at Baltimore Life, in a breakout session.
According to Salvi, Baltimore Life was experiencing mediocre sales growth at 3-4% a year, its agent productivity was low, and turnover was high.
“We had an unclear focus,” he said.
This forced Baltimore Life to develop and implement a strategy that Salvi called “The Team Advantage Agency Structure.”
This new agency structure included additional support people for the company’s agents, including a director of marketing, agency service associates, and new responsibilities for the office managers.
With this structure in place, Salvi says he employed a concept from The Discipline of Market Leaders, by Michael Treacy and Fred Wiersema.
Salvi used the model that a successful agency is built with a structured, process-driven system based on 3 factors: customer intimacy, product excellence, and operational efficiency.
“We first focused on customer intimacy,” Salvi explained.
The first step to improve customer intimacy involved an “unbundling” of the agents’ activities.
“Prior to this strategy, our agents did a little bit of everything,” he said.
Now, tasks are divided between the agency’s director of marketing, agency service associates, and the office manager. “Now, everything we do revolves around the agent,” he said.