Increase Your Production By Building A Business
The worlds top insurance salespeople are not the worlds best salespeople–they are the worlds best entrepreneurs.
When I came into the business over 32 years ago, I was hired as a life insurance salesperson. Back then it was possible to be a top advisor by mastering the art of selling. Today, the paradigm has shifted–to be at the top you need to master the art of business.
After years of research, I have discovered that high-performing producers do the same things, which can be broken down into eight best practice behaviors. (See sidebar on page 11.)
We can use these eight best practices as a basis for creating our own successful businesses. But top advisors dont simply follow these eight practices; rather, they integrate them into four systems: business management, marketing, relationship management and resource management.
Business Management. Business management is the cornerstone of any top advisors business. One area that often is ignored when we talk about the business management of an advisors practice is the financial management side. To be successful, you need to look at your business in terms of the financials. Understand that your success depends on mastery of and control of five financial levers of your business: product mix, case size, number of sales, seasonal volatility and cyclical volatility.
When you learn to control these five levers you will be able to predict who you will sell to, what you will sell and when–next week, next month, next year, the next three years and five years.
The first decision you have to make is to determine what mix of products you will offer. Do you want to offer a broad array of products, or would you rather be more of a specialist with a much more narrow focus?
Case size is really a function of the market in which you want to work or the type of work you want to do. Do you want to move up market and write larger but fewer cases? Or, do you want to increase your number of cases?
Seasonal volatility will be determined by two factors. One is when you are working in the business. For example, if you take two months off–July and August–thats going to have an impact on your revenue in those months. The second factor is based on circumstances outside of your control. For example, if you are involved heavily in the 401(k) business, youre probably going to be quite busy in the first few months of the year.
Cyclical volatility is a function of markets. Over time, the markets show an upward linear progression, but short-term, markets look much more volatile. Right now were in a down market and thats having an impact. Cyclical volatility in your business typically moves in three-, five-, eight- and 10-year cycles.
Align these five financial levers with the other three systems–marketing, relationship management and resource management–and your payoff will be the following: youll make more money, youll have more quality time for friends and family, your business will be more fun, and youll create long-term security.
Marketing. A well-designed marketing plan will help you establish a brand among your target audience. It will keep your pipeline full of quality prospects that will become quality clients.
What percentage of your revenue do you invest in branding? Too many advisors dont allocate a portion of their revenue to marketing. By contrast, top advisors will spend on average somewhere between 12%-15% of their gross revenue on marketing. Dont confuse marketing with selling. Marketing is what gets you face to face with your prospects. Selling is what you do when youre face to face.
In building a marketing system, top advisors follow the first best practice of creating and utilizing a marketing plan. In that plan, they establish a cluster of four to eight robust marketing strategies.
For example, many planners want to increase their average case size. How do you do that? Its a marketing and branding challenge. Increasing your average case size means moving up market, but to do that you have to use marketing initiatives that will help you build your brand and get you face to face with wealthy individuals. A direct mail campaign is not going to do that, but running a series of concept lunches may.
A concept lunch is where you invite a number of clients and ask them to bring guests. After a few minutes for meet and greet, the host gets up and welcomes everybody. The host then gives a brief three-minute introduction and everybody goes around the table and introduces him or herself. After lunch the host presents a concept.
In building a brand, focus on obtaining introductions, as opposed to gaining referrals, is best practice number six. Using this “indirect influence” is one of the most effective ways to make an impact and have influence with a new prospect.