The Building Blocks of Agency Development: A Handbook of Life Insurance Sales Management
180
The Building Blocks of Agency Development: A Handbook of Life Insurance Sales Management
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Overview
Product Details
| ISBN-13: | 9781468553970 |
|---|---|
| Publisher: | AuthorHouse |
| Publication date: | 02/29/2012 |
| Sold by: | Barnes & Noble |
| Format: | eBook |
| Pages: | 180 |
| Sales rank: | 542,259 |
| File size: | 546 KB |
Read an Excerpt
The Building Blocks of Agency Development
A Handbook of Life Insurance Sales ManagementBy C. Nguyen Canh
AuthorHouse
Copyright © 2012 C. Nguyen CanhAll right reserved.
ISBN: 978-1-4685-5396-3
Chapter One
PURPOSE OF AGENCY MANAGEMENT
What's the main purpose of agency management? Now that you've been promoted to be an Agency Leader (AL=Unit Manager, Sales Manager, Agency Supervisor) in your insurance company, your boss expects you, and so do you, to succeed in your new position. Your enthusiasm abounds because you were promoted rather quickly. You want to know a lot of things in order to succeed faster; however, since you're a cautious person, you've been thinking hard but still aren't sure where to begin and what you should focus on to ensure your success as you promised your company. Although you're very confident, sometimes you wonder if you've promised management too far beyond your ability. You realize that you need to learn a great deal more to acquire new knowledge and skills. So, where should you start?
Don't worry! There are 3 things you need to determine and focus on:
• Objectives,
• Activities to achieve your objectives, and
• Methods to carry out your activities in order to achieve your objectives
Like taking a trip, you need to know where you want to go, what to prepare, and how to get there. This first chapter will help you explore your objectives—what your company wants you to get done, how much pay you want for your work, and how far you want to move upward in your company.
STOP HERE!
Write down in the space provided on the next page, or on a separate sheet of paper, what you believe are the main objectives of what you do in your position of AL.
In my opinion the main objectives of what I do as an AL are:
1. _____________________________________________________ _____________________________________________________ _____________________________________________________
2. _____________________________________________________ _____________________________________________________ _____________________________________________________
3. _____________________________________________________ _____________________________________________________ _____________________________________________________
4. _____________________________________________________ _____________________________________________________ _____________________________________________________
5. _____________________________________________________ _____________________________________________________ _____________________________________________________
IA. OBJECTIVES
The main objective of business is to grow profit over time. Your job as an AL is to:
* Grow staff
* Grow revenue, and
* Grow profit
IA1. Staff Growth
You're supposed to increase the number of your active (selling) agents every quarter. It doesn't matter how many producers you have; it only matters how many of them sell. The number of agents on your sales staff is only a body count. The number of your active agents indicates how successful you are as an AL. It's better to have a lower body count and a higher ratio of active agents. But, the important thing you need to bear in mind is the increase of this ratio as well as the absolute number. You should decide on a ratio higher than the company's average but not unrealistic. The ratio alone isn't a good indicator of success. A 66% active ratio looks good on paper but it doesn't reflect your talent and skill when your staff has only three or four agents. The same ratio is excellent when the number of your sales staff is 15 or 20 and keeps increasing. To achieve consistent growth, you'll need to recruit to increase the body count, develop new salespeople into active agents, and manage to retain the majority of them over time. So, within your responsibility for staff growth, you're responsible for recruiting, development, and supervision.
* You should discuss with your leadership team, and decide on a common goal. You should meet with your team to guide the discussion and group decision but avoid imposing your ideas on them or unilaterally deciding regardless of what the team thinks. If you don't completely agree with them, you'll need to convince them of the reasons and benefits of your position and persuade them to change their minds. Since you're the leader, you can rather easily dictate and impose your will on the team but success isn't certain when you lack the ardent support of the majority.
IA2. Revenue Growth
Your agents' premiums must grow over time. As the years go on, operation expenses increase due inflation and the ever rising cost of doing business. If they maintain the same level of premiums, your company's revenue will decrease in value, and so will their income, and yours! When your agents do the right things and do them right, and have consistent and sufficient activity in prospecting and selling, they'll naturally sell more and bring in more premiums. Exceptions do exist when you have the same number of selling agents but your premiums increase. This is due to either larger cases are sold or more cases sold per active agent. In the first scenario, luck can be a factor. However, in order to sell large cases on a continual basis your agents must upgrade their markets, which isn't an easy thing to do. Agents rarely reach out of their comfort zones and venture into new territories. The second scenario doesn't happen often either. For the same agents to sell more cases per week or month, a change of market is necessary. Again, unless you as a manager actively promote and help your agents develop new markets, the number of sales per agent and their case size remain rather consistent over time if your management capability remains at the same level. You need to get out of your own comfort zone and bring your agents with you on this uncomfortable trip to help them sell more and bigger to increase revenues for themselves, for you, and for your company.
IA3. Profitability Growth
The bottom line in running a business is to make a profit. Lee Iacocca, former President and CEO of Chrysler, says in his autobiography that one is "in business to make money." (1) In the life insurance business, an insurance company usually doesn't make money in the first few years of policies sold. It varies from company to company and from product to product. It may take somewhere from three to five or seven years to earn a profit. The company makes money from old premiums, savings in expense and mortality experience, and investment income. Therefore, new insurance policies of questionable quality will lapse early and cause greater expense and lower profit. Business sold to relatives and friends by new agents normally have lower persistency. It was sold based almost exclusively on relationship; the buyer felt "obligated" to help the new agent due to blood relations or friendship. It wasn't bought because of protection or savings needs. It'll lapse when the agent leaves the business as the owner sees no reason to continue paying premiums. Business sold under pressure of contract continuation, or meeting sales contest deadlines, or under the agent's high pressure sales techniques all fall into the non-quality business category. So, your job includes attention to quality business to help your company make a profit.
The above explanation of life insurance profitability doesn't appear to apply to individual sales managers because such profitability depends on long-term investment factors. Therefore, when we talk about profitability growth for you as an AL and your agents, we talk about your personal income, although most companies do pay a portion of your management income based on the business persistency of your staff. You need to keep an eye on your net income every quarter. You may hire more productive agents and bring in more premiums in the quarter but end up bringing home less money. In order to affect quick increase in staffing and revenue for a particular quarter, you may have spent too much money on advertising, travel, awards, and other incentives. Remember first and last that you're a businessman or businesswoman. As such, you should bring home more income from your business. Otherwise, you lose money.
IB. WHAT YOU DO TO ACHIEVE OBJECTIVES
STOP HERE!
Write down in the space provided on the next page, or on a separate sheet of paper, the most important things you do as an AL to achieve growth in recruiting, premiums, and income.
In my opinion the most important things I do as an AL to achieve staff growth, premium growth, and income growth are:
1. _____________________________________________________ _____________________________________________________ _____________________________________________________
2. _____________________________________________________ _____________________________________________________ _____________________________________________________
3. _____________________________________________________ _____________________________________________________ _____________________________________________________
4. _____________________________________________________ _____________________________________________________ _____________________________________________________
5. _____________________________________________________ _____________________________________________________ _____________________________________________________
IB1. An AL's Two Top-Priority Responsibilities
The main responsibilities of an AL are recruiting, retention, and agent development.
IB1a. Recruiting and Retention
In agency management you can always recruit your way out of any hole you dug yourself in not only in staff but also in revenue and profitability areas. Recruiting is the life blood of your business and retention is your wealth conservation. Please remember that you don't do your job right if a week's gone by without your active involvement in at least one recruiting activity. Your top responsibility is to bring more people to your sales team and keep the majority of them.
IB1b. Agent Development
You turn your new recruits into productive agents by directing and supporting the following four activities:
a. Prospecting
b. Calling for appointments
c. Making sales presentations, and
d. Managing activity
DIRECTING: What's the difference between the following examples?
AL #1 to Agent: Please prepare your prospecting plan for next week, and submit it to me on Friday.
AL #2 to Agent: Let's meet on Friday at 2 to plan your prospecting activity for next week.
As you can see, in the first example AL #1 gives an order to the agent to submit a prospecting plan. In the second example AL #2 also gives an order to the agent to meet in order to plan for prospecting activity with her involvement to give her input or show direction to help the agent find new prospects. In both examples the AL doesn't do the prospecting activity for the agent. In the first scenario, the AL doesn't even do the planning. The importance difference lies in the fact that AL #1 isn't involved at the start in the critical step of planning. She may discuss with the agent after she reviews the plan, or she may not. Reality tends to support the second possibility. We all know that field sales management is extremely busy with "urgent"activities—little daily "fires." Only strong agency managers who manage their time effectively have the stamina to review reports and give feedback. One can easily misconstrue the term "direct" as giving orders like a drill sergeant.
Managers in the past did give orders and exercise their positional power with detachment. Those days are over. Most of the time in today's free market economy directive management is no longer effective. Nowadays employees have more options thanks to greater employment opportunity. They can't be forced to take orders if they disagree. And they do disagree with unintelligent directions from their boss because they're well educated—in many cases even better educated than their superiors. It's easy for newly promoted managers to make this mistake of giving orders. They feel empowered because of their "higher" position, and mistakenly think that their positional authority will automatically command compliance. It'll help the new manager to keep in mind that personal influence, rather than positional power, is much more effective in getting things done through others. So, get involved with your agents in their most important business activities of which prospecting is foremost in order to guide, and build relationship. Be a friend most of the time; be a boss some of the time. We'll talk more about management skills in a later chapter. For now, it's worth remembering that "direct" means showing the way, not giving orders.
SUPPORTING: What's the difference between the following examples?
AL #1 to Agent: I'll go to the job fair and get names for you.
AL #2 to Agent: I'll go to the job fair with you and show you how to get names.
In both examples you can say the AL supports her agent in prospecting activity. The difference is the way in which the support is given. In the first example, the AL acts like her agent's secretary. In the second, the AL acts like a coach—working side by side with her agent in order to show the latter how to do things the right way. Many new managers confuse their supporting responsibility with helping. A manager doesn't do things that her Agents are supposed to do for themselves by themselves. She shows them how. Before you were promoted, you were a superior salesperson; and as such you took initiatives to get the right things done like setting appointments, seeing prospects, closing the sales. You did everything by yourself. You developed the habit of being independent. Since you were good, you didn't need a lot of coaching from your sales manager. The bad consequence was that you didn't have an opportunity to see how your manager taught agents new skills. You should find that doing things for others is easier and less time-consuming than showing them how to get things done. Naturally, it'd be easier for the teacher to solve a math problem than show her students how to find the solution by themselves. Many managers are tempted by the easy way out without realizing that they're giving up their managerial role, and consequently, their management authority and effectiveness. In addition, please remember the popular saying that when you give a hungry man a fish, he can feed himself for a day. On the other hand, when you teach him how to fish, he can feed himself for a lifetime.
As an agent you were more effective being independent; but, as a sales manager, you're more effective being interdependent. You need others to make the sales, get the premiums, and meet your sales target. You're dependent on your agents. On the other hand, your agents need you to show them how to make the sales, get the premiums, and meet their sales targets. You depend on each other. Many new managers misconceive that once promoted they have more independence. Your role is to be a teacher, who shows, and if necessary, corrects mistakes. To be effective in getting more things done through others, be a teacher, not a boss or a secretary! New agents need to be developed into professional insurance salespeople. It takes you a lot of time, hard work, and patience to turn a new recruit into a good salesperson. What do you need to teach and coach your agents in?
Directing And Supporting Prospecting Activity
Most of the time agents leave their insurance sales business because they run out of prospects, not because they don't know how to sell. Therefore, as their teacher and coach you must focus on helping your agents succeed in this most critical activity in a life insurance sales career. We'll discuss the different methods of prospecting later. For now it's important for you to remember #1 how instrumental you are to your agents' success and #2 you must have a mastery of prospecting skills to teach them.
Directing And Supporting Calling For Appointments
Don't ask your new agents to call to set up appointments without your supervision. The majority of new agents have call reluctance. If no help is available, this reluctance will soon develop into fear, and surrender. Therefore, close supervision for calling sessions must be provided early on. Walk around and observe. Jump in to coach those agents who call for fifteen minutes without getting an appointment. Praise them publicly to motivate the good agents as well as encourage others by showing them that their peers can set up appointments over the phone. Your support and encouragement in this prospecting activity will make or break a new agent's career. The importance of your personal involvement can't be overestimated when it comes to new agents' calling for appointments.
Directing And Supporting Making Sales Presentations
New agents learn to make sales presentation in their initial training but they haven't gained the self-confidence needed to apply their skills in the first few weeks, especially when they sell to strangers. Joint field work in the initial weeks is an excellent way to teach and coach your agents to help them gain confidence in selling the right way. New agents sell to people they know; and normally they don't like having their manager tag along for fear of losing face, or any other reasons. To overcome this reluctance you may want to convince your new agents that these initial joint appointments are the best opportunities for them to practice their selling skills.
(Continues...)
Excerpted from The Building Blocks of Agency Development by C. Nguyen Canh Copyright © 2012 by C. Nguyen Canh. Excerpted by permission of AuthorHouse. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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Table of Contents
Contents
IA. Objectives....................4IB. What You Do to Achieve Objectives....................7
NOTES—CHAPTER I....................38
IIA. Recruiting....................39
IIB. Retention: Developing and Keeping New Agents....................51
IIC. Problem Solving....................70
IID. Motivation....................84
NOTES—CHAPTER II....................100
IIIA. Differences between Management and Leadership....................107
IIIB. Leadership Styles....................116
IIIC. A Leader's Top-Priority Responsibilities....................123
IIID. How to Fulfill Top-Priority Leadership Responsibilities....................130
IIIE. A Leader's Requisite Qualities....................133
NOTES—CHAPTER III....................157
INDEX....................161