You’ve probably heard the adage about responding to life’s lemons by making lemonade so many times that I won’t repeat it here. But clichés are usually crafted from wisdom, and this one is no exception. Many a business owner has achieved great success by turning a perceived negative into something that creates a benefit.
In recent years, agents have felt more pressure than ever from the carriers they represent. Those carriers set high expectations for additional business, and they use all sorts of inducements to encourage agents to meet the targets they’ve created. Sometimes, that inducement is a nice incentive, such as a vacation or a fatter commission. Sometimes, it’s a less-than-gentle push from the district rep. At other times, the inducement is a thinly veiled threat to withdraw your appointment and pass your hard-earned business to another agent.
Running a business in today’s marketplace is tough enough without feeling additional pressure from carriers. It may be tempting to throw your hands up in exasperation and insist that there’s nothing you can do, but that’s not exactly a productive approach, and it won’t do anything to enhance your relationship with carriers or your reputation.
That’s what brings me to the lemonade. Instead of responding to the pressure with frustration, why not turn it around and use it as motivation? Since the carriers aren’t going to reduce the pressure — in fact, it’s a safe bet that it’s only going to increase — accept it as a fact of doing business and work hard to achieve those targets.
After all, if you succeed in meeting (or exceeding) the carrier’s expectations, they aren’t the only ones who benefit. You will, too. In addition to gaining more revenue in the short term, you’ll gain the long-term financial benefits of a stronger book of business. That means more income from renewals, as well as more opportunities to cross-sell clients. It also means you’ll be even more relevant to your clients and in your marketplace.
You may even want to challenge yourself by going beyond the goals the carrier sets for you. For example, if the carrier wants fifteen new policies this quarter, set your own goal to write twenty.
Pressure from carriers can give you a good excuse to stop and take a candid look at your agency. What are its strong points? What are its weaknesses? Where has it been losing ground over the last year? Do you have the right people? Are you compensating them in a way that encourages growth and loyalty? Which recent marketing efforts are producing business and which aren’t as effective?
You may also find that the carrier that is pushing you just isn’t a good fit for your agency. It may represent only a small percentage of your dollar volume, or your clients may be less than pleased with the service it provides. In that case, replacing that carrier with another may be a very productive move. On the other hand, if you’re getting pressure from an insurer that represents the lion’s share of your business and profits, it will probably pay to do everything you can to step up your efforts.
One approach that can help you decide where to focus your efforts is to carefully study your local competitors. You probably know them well from local Chamber meetings or church or civic groups, but have you ever paid close attention to the way they run their agencies? You may be able to identify areas in which you have a significant competitive advantage. Or, you may find that you’re both fighting over clients who are not particularly profitable. The better you know yourself and the people with whom you compete every day, the more effective you’ll become.
Motivate your team
Share the pressure in a positive way by giving your staff incentives for writing additional business. It doesn’t have to be anything huge or expensive — even a $25 gift card to a favorite local restaurant can provide motivation (and if that restaurant is a client, it’s also a nice gesture). Or award the top producer an extra day off that they have to use during the following month.
The incentives are powerful, but they have an even more beneficial effect: they raise the staff’s awareness of the importance of growing business and make them more likely to attempt sales long after you’ve given out the prize. Plus, that additional business will increase your income in years to come, so you’ll continue to benefit.
What if you’re a one-person operation? The same basic principle applies, but you can make the reward something that’s particularly meaningful to you that you normally wouldn’t do. Maybe it’s a weekend at a golf resort or an overnight stay at a hotel in a nearby city.
All about attitude
The common thread to all of these ideas is that how you respond to carrier pressure comes down to attitude. It’s easy to resent that pressure, but resentment isn’t productive for you or for the carrier. If you instead shift your mindset so that the pressure becomes motivation, everyone comes out ahead — you, the carrier, and the clients who gain better coverage and service by doing business with you. If that kind of motivation becomes a habit, you’ll be surprised at the growth you experience. You’ll also find that the quality of service your team provides will be likely to increase.
Demonstrating your willingness to achieve more challenging goals makes your agency more valuable to the carrier. That means the carrier is more likely to offer other opportunities or rewards to you in the future. It may also give you additional leverage with the carrier when trying to resolve a problem for a client or trying to obtain coverage for someone who isn’t easy to insure.
You can see how a simple change of attitude can have a big impact upon your agency. Call it making lemonade, looking on the bright side, or whatever you’d like. It’s a sound approach you should start using today.