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Maximizing Your Practices Profitability

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Once an agent starts spending more time selling and less time on administrative tasks, he or she generally will start to see an immediate impact on income. To take that to the next level, however, agents may want to consider maximizing their time in their most profitable markets.

Theres an old ratio in the sales world that says 20% of your customers generate 80% of your business, explains Charles Gleason of The Gleason Corporation Inc., Sanibel, Fla.

“But whats more significant is that 80% of your customers only generate 20% of your business,” he says.

Gleason says that in order to maximize profitability for an insurance practice, agents need to spend more time working with the same type of customers that generate the majority of their revenue.

To do this, at the end of the year when reviewing production levels, agents should try to categorize every sale they made. Then, agents should look at each category and determine how much they earned. “Youll find out that 80% of the time youre making calls on tiny cases that arent going to amount to anything more than 20% of your income,” he says.

After taking a close look at his business, Gleason realized that his most profitable category was in the corporate market. Going forward, Gleason focused more of his time working in this market on these more profitable cases.

“I started maximizing; I only worked where I was making a lot of money, and it really jumped my income,” he says. Once he started maximizing his profitability, Gleasons annual income surged from $45,000 to $100,000.

–Barry Higgins

Reproduced from National Underwriter Life & Health/Financial Services Edition, February 6, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.