Nearly every insurance agent is constantly thinking of ways to enhance profitability. Most of those agents focus on doing something different with their own operations.
For example, a common goal is boosting profitability by trimming costs. However, that’s far more easily targeted than accomplished, because the costs of operating most agencies tend to be steady and minor changes usually do not have dramatic effects on the bottom line. Other agency owners may focus on opportunities to cross-sell existing customers on new policies.
Another very effective way to build your book of business and increase the value of your agency is one that many agents fail to pursue: using your relationships with other businesses to attract new customers. Within your community, there are firms whose business is complementary to yours, but not competitive. For example, those firms might include certified public accountants, local bankers, attorneys who specialize in trust and estate matters, certified financial planners, and stockbrokers.
What do they have in common with you? All of them serve people in your community who have enough income or assets to warrant the need for their services. All of them have earned the trust of those clients. And, like you, all of them would like to increase the number of people they serve.
When you build informal alliances with these professionals, you can gain in two ways. First, you’ll be able to gain access to their clients. Second, your association with them means that your business will gain the benefit of their clients’ trust and their public reputations. When the accountant down the street recommends to his clients that they bring their insurance needs to your agency, he’s essentially telling them that he trusts the way you do business, and that he believes you’ll serve their needs in a way that will reflect positively upon him.
The process can work in both directions. You probably have clients who would benefit by turning to an accountant, an attorney, a financial planner, or any of those other professionals. Even if they don’t specifically ask you for a referral, when you offer a suggestion, they trust you to be acting in their best interests. After all, they’ve placed a significant financial responsibility in your hands. So when you make a referral, they will instantly develop a level of trust with that person. In other words, you’ll both bask in the glow of each other’s reputations. Read Part 2 (coming soon) to see what simple steps you can take.