20 Best Practices for Enhancing Agency Value

October 12, 2022 Oak Street Funding

Business meeting | 20 best practices for enhancing agency value

Have you wondered how the highest-performing agencies fuel their growth? Through extensive research, Scott Addis, CEO of Beyond Insurance, discovered 20 best practices for organic growth. While few agencies exhibit all 20, the higher the performance in a given agency, the more of the best practices they are likely to follow. Incorporating even two or three of these practices will help your agency see greater growth.


→ Part 1: Formula for Enhancing Insurance Agency Value


1. Consultative/Diagnostic Sales Management


The most effective sales and sales management strategies are not based on having the right products. Instead, they’re built around a process that’s both consultative and diagnostic. The key is uncovering and identifying the issues customers are most concerned about as they evaluate risk management strategies. Such an approach demonstrates a willingness to develop the type of deeper relationships customers reward with loyalty.

2. Screening Mechanisms

Every insurance agency receives calls and emails from prospects who are comparing their current rates to those available from multiple competitors. Not only are these prospects unlikely to become customers (because there’s always going to be someone cheaper), but they fail to have an interest in what sets one coverage option apart from others. Having a formal mechanism in place can help agencies screen out those who view insurance as a commodity before expending significant staff time in preparing detailed quotes.

3. Creativity & Innovation

The most successful agency owners and managers foster a culture of creativity and innovation. They encourage their team to “think outside the box,” looking for new ways to better serve customers and operate the business.

4. Benchmarking Customers

Ask most agents, and they’ll claim their customers are loyal -- but can they prove it? Developing a system to benchmark customer appreciation, loyalty, and intimacy (trust and the depth of the relationship) is critical to building those relationships.

5. Disciplined Prospecting

Too many agents believe prospecting is simply a numbers game, in which the more calls you make, the more success you’re bound to have. Effective insurance agencies have adopted disciplined, strategic systems for researching the most likely prospects and then qualifying them before devoting additional time to sales efforts.

6. Carriers As Partners

Unsuccessful agents often blame their insurance carriers for their lack of success, looking for flaws in rate-setting and underwriting. The most successful agencies instead look upon their carriers as valued business partners, working hard to maintain strong relationships and taking full advantage of the resources carriers make available to support their sales and service efforts.

7. Value Creation Know-How

If an agency owner or manager doesn’t recognize how to create value, any success they have is going to be little more than dumb luck. By developing a thorough understanding of what constitutes value and how to go about enhancing it, agencies can target their efforts most effectively.

8. Disciplined Cross-Selling

Cross-selling is not only a way for an agency to make itself more useful to its customers, but it's also a way to strengthen customer loyalty. The more business relationships a customer maintains with an agency, the less likely they'll react to something like a premium increase by jumping to a competitor. Having a system in place to recognize and pursue cross-selling opportunities is critical.

9. Giving Back

Successful agencies share their success by giving back to their community and their industry. That means more than just making donations. It also involves giving team members the time to serve their communities and participate in industry associations.

10. Brand Enhancement

In an ever-more-competitive marketplace, having a clearly defined brand is more important than ever. Every action and decision the agency makes should be examined in terms of the effect it’s likely to have upon that brand. If a particular step could negatively affect the brand, don’t do it.


→ How to: Branding Your Business


11. Nurturing Referral Pools

Successful insurance agencies know the best leads are those which come from referrals. That’s why they develop and nurture an active network of engaged, enthusiastic clients and centers of influence in the communities and industries they serve, who are only too happy to create a steady flow of qualified referrals.

12. Lifetime Value

Shortsighted agency owners and managers view customers only through the window of their current policy revenue. Agencies focused on organic growth look well beyond what a customer is paying for today. For example, a small business customer may begin with one small policy, but as that business and its needs grow over the next decade, the revenue potential is significant. Thinking about the customer in those terms provides an incentive to provide a higher level of service from the beginning.

13. Stakeholder Intimacy

How well do you really know your agency’s many stakeholders? Your clients, your staff, carriers, prospects, the community, and centers of influence all affect your capacity for growth. Being aware of that and having formal programs in place to nurture those relationships when appropriate will pay tremendous dividends.

14. The Best Talent

Successful high-growth agencies never settle for who's available. They constantly attract top-notch talent in their markets and industries and retain those top performers by compensating them well and offering them opportunities to grow professionally and build their personal satisfaction with their work. Your business isn't about the quality of the policies you sell; it's about the people who sell and service those policies.


→ Motivating the New Workforce


15. Continuous Improvement

The marketplace never stands still. Neither do successful agencies. Leadership must constantly examine business processes and workflow to identify areas where improvement is needed, and then must be willing to devote the time and resources to reengineering.

16. Know Your Vision

It’s nice to have a “vision statement,” but it’s critical to have a real vision. If you can’t see what you want your agency to become, how will it ever get there, and how will you know whether you’ve succeeded?

17. Maintain Balance

You and your team aren’t forced to work. You’ve chosen to do so for your financial benefit and professional satisfaction. Never lose sight of the fact that work is only one element of our lives, and the most meaningful moments usually take place outside the office. Respect and protect your team’s work/life balance, and protect your own while you’re at it.

18. Don’t Be Salespeople

Far too many agencies encourage staff to focus on racking up sales, paying too little attention to what’s being sold and why. That leads to little customer -- and employee -- satisfaction. Encouraging producers to be consultative and diagnostic in their efforts instead of simply product-oriented and transactional makes everyone happier and more successful.

19. Mentor People

Your team owes you a good day’s work. In return, you owe them the opportunity to grow as professionals. That’s especially true if you’re thinking about who will succeed you as the agency’s owners or leaders. Don’t entrust those things to chance. Create a formal mentoring system that involves learning what people want to do and helping them create paths to get there.

20. Have Fun

Selling insurance may not always seem like fun, but bringing a fun attitude to the workplace can keep people happy and focused. When your team enjoys what they’re doing and knows how to have fun doing it, your customers will feel it, too. Start by smiling more, and look for ways to add enjoyable activities, from silly contests, to holiday decorations, to scheduled recreation days.

What it all means

Addis proved that organic growth, profitability, and agency value grow the most when nurtured in an environment of enlightened leaders who create a culture of creativity and innovation. They inspire their staff to "think outside the box" to develop value propositions that differ from those of their competitors. By using these best practices, uncovering client issues, and delivering cutting-edge solutions, they develop powerful weapons against commoditization and can go about their business with a sense of confidence, simplicity, purpose, and passion.


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Disclaimer: Please note, Oak Street Funding does not provide legal or tax advice. This blog is for informational purposes only. It is not a statement of fact or recommendation, does not constitute an offer for a loan, professional or legal or tax advice or legal opinion and should not be used as a substitute for obtaining valuation services or professional, legal or tax advice.

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