Search
  • Monica Adwani

8 Ways To Experience Growth Within An Insurance Agency

The 21st century has been a rollercoaster for growing companies and agencies which have faced dynamic business environments, constantly changing consumer behaviors, and fast-paced product evolution. Gone are the days when companies and agencies grew using conventional methods, they must adapt and innovate to grow in such a competitive environment. As distances have become a diminishing problem courtesy of the internet boom, the clientele and target audience for companies have shifted from a national to an international focus. Although this has provided companies with greater opportunities it has come at the cost of questioning the conventional method used in a business which had been thought to be “Insourcing” i.e., to perform your tasks inside the company to cut down costs. Many analysts have provided numerous talks on how to scale up companies, but we want to take an agency-centric approach, and according to business leaders in the field, the top 8 ways to grow an agency are:

Business Development Starting off with the most widely accepted and effective way to scale up your business. Targeting a new audience is vital for a variety of reasons. Firstly, a new audience provides fresh data on consumer behavior and in-depth information regarding which market segments to target and which prove to be more profitable and efficient. Secondly, it is an effective way to achieve short-term goals and lay the foundation for the business's long-term goals and behaviors.

Cross-Selling When a customer is interested in purchasing a certain product, cross-selling can be an effective way to create demand for other products a business offers. Many times, customers are not even aware of the full range of products a business deals in, educating them effectively can pave the way for them to make an informed decision. A good example can be how companies assign a certain product to be a loss-leader, as it brings customers in and encourages them to buy other products offered as well. Another example can be seen in the insurance industry, which offers discounts if the insurer buys multiple policies from the same company. Businesses can also offer products that complement each other, which could entice customers to buy more.

Cross-selling enables businesses to cut down on costs in customer acquisition and lead generation. Furthermore, cross-selling may come with certain discounts resulting in decreased profitability, but it can increase the number of sales with lower advertising costs. Besides, it is better to sell a product at a lower price rather than not sell it at all. Page Break

Increasing Coverage In the age of competition, customers have a wide range of options to pick from, and agencies must set themselves apart from the rest, one way to do so is shifting from standardized packages to specialized packages which more preferably cater to the cucustomer's unique situation and needs.

“The best way to differentiate yourself from your competition is to truly show your customers that you care. Not by talking, but by listening to their needs and responding in ways that save them time, money, or solve a real problem.” -Kelly Donahue-Piro

Increasing knowledge of your products gives you an edge over competitors and helps build better relations with your clients as they feel like you are prioritizing their needs and not just maximizing your profit. On top of that, they will not have to go through the hassle of finding different agencies for various products when your company provides a one-stop solution for all their needs.

Retention It is always easier to resell a product to someone who is already aware of it and has used it themselves. Studies have shown that selling the same product to an existing customer increases the likeliness by approximately 40%. Not only is it easier, but it is also much cheaper, studies have also suggested that retaining an existing customer is saves companies as much as 70% in costs than closing a new customer. Retention builds loyalty among your customer base, and it also automatically leads to one of the most effective forms of advertisement which is “word of mouth.” New customers are more likely to buy a product if they already know someone they trust who is using it. That is why it is beneficial to develop a Customer Retention Process that drives customer satisfaction in the long run which in turn builds customer loyalty.

Firing the Bottom 5-10% of Customers A business's human capital plays a vital role in its exponential growth, you do not want to train your agents and have them leave you after a few months. A high employee turnover rate has proven to have a significant and inversely proportional effect on a company’s growth rate. Hence, it is important to use your human capital efficiently and utilize it to its full potential. It is important to set up certain merits for your customers, and set aside the bottom 5-10% who are toxic, abusive, and costing money rather than bringing it in.

“Though part of the puzzle is obviously capital budget allocations, most companies seem to have a much higher awareness of the rules by which capital and assets are allocated than they do about how skilled people should be spending their time.” Kelly Donahue-Piro Firing these customers frees up crucial skilled capital and decreases employee turnover. It not only enables your employees to target other customers, which can serve to be more profitable to the company, but also cuts down insurance costs and increases efficiency and profitability. Business Positioning

Companies use positioning to build an image of their products or services in the mind of their target audience. Your company’s positioning can have tremendous impacts on how you want to portray your products in the market. It is important to carefully examine your target audience and draft your policies accordingly. Simply adopting a progressive approach without considering the type of products you are offering or to which audience your products would be the perfect fit will lead to confusion amongst your employees and can have a negative effect on revenue. You must position your products in such a way that they connect with your customers in a unique way through a story that they could relate to on some level.

“Positioning is not what you do to a product. Positioning is what you do to the mind of the prospect. That is, you position the product in the mind of the prospect.” - Kelly Donahue-Piro

You can position your business based on competition, products, pricing, or quality. If you can find the right fit “niche” for your business, it will portray a unique and positive image of the business in the market, which helps you set yourself apart from your competition and effectively increases the odds of getting the initial trust people need to have to buy your products.

Budgeting

In a growing company, when departments are expanding and multiplying in number, businesses often lose track of their expenses and mismanage funds among different departments. It is often one of the major reasons new businesses fail. Budgeting your expenses can give you a clear picture of your future expected growth, after which you can adjust accordingly and make any changes if necessary. It provides direction to the business and avoids under or even overspending. According to research conducted by U.S. Bank, the biggest reason small businesses fail is poor cash flow management skills/poor understanding of cash flow.

“Businesses don’t always fail due to lack of money, most of the time they fail because they have too much money.” - Kelly Donahue-Piro

Proper budgeting can allow business operations to run smoothly and efficiently. It can also help in categorizing which tasks require more budget and which tasks are overbudgeted. It might be the ultimate key to scaling your business effectively.

Remarketing (Insurance Specific) Remarketing is one of the most underutilized tools. Even though it can be seen as a non-revenue generating activity, if done strategically, it can significantly contribute to the growth of the business. You can remarket unprofitable accounts to unprofitable or non-admitted markets, better accounts to higher commission carriers, and always add more layers and accounts while in the process. The more accounts, the less likely the clients are going to re-shop, especially if it possesses the same effective days.

10 views0 comments

Recent Posts

See All