Agency Revenue Tools

NewsArticle
Dec 5
Time for Production
2014 Planning Recommendation
John W. Macdonald

Issues:

·         Growth/Production opportunity

·         Major revenue opportunity

·         Recover lost revenue from commercial lines soft market

·         Examine opportunities for 2014…is there anything more substantial out there?

·         Payroll companies are willing strategic partners

 

As you and your Agency develop your 2014 budget, are you directing resources at growing your customer base, your P&C revenue, and -most important-your commission revenues? As business people, we all look to the coming year and plan to take advantage of opportunities that exist for our businesses.

Consider this…multiply your agency’s average Personal Lines account commission by the number of employees working within your agency’s commercial accounts. What kind of numbers do you come up with?

Account Commission     $250         $300        $400

 Employee Count 

 

 

 

 

 

 

 

 

 

 

 2,000                        $500,000   $600,000   $800,000

 4,000                     $1,000,000  $1,200,000  $1,600,000

 

 

 

 

 7,500                     $1,875,000  $2,250,000  $3,000,000  

10,000                    $2,500,000  $3,000,000  $4,000,000

These are revenue figures!! These commissions are being paid to some insurance provider within your market area. We at Agency Revenue Tools suggest that these commissions should be a component of your agency’s annual revenues.

 

 

 

 

As business people, we are(or should be) hard-wired to recognize and pursue opportunities. Many independent agents have been comfortable revenue-wise for many years, and the pursuit of new revenues from new opportunities has not been as critical or urgent as it is today. It is time to ask your senior staff where opportunity for growth exists…and the pursuit of these opportunities should be part of your 2014 budget.

 

Evolution science states that the ability to adapt is the key to survival. The US Economy is in transition, with manufacturing being mechanized and moved off-shore. Fleets are being reduced. Inventories have been down-sized. Employee count is down…and likely to stay smaller. 

What is your agency’s plan to deal with the “New Normal?”

We suggest you look to the grid above. Harvesting additional commissions from the Commercial relationships that your agency already controls just makes sense. Employers are operating with thinner margins than ever, so they are willing to listen to ways to generate employee goodwill through benefits with no direct expense.

 

Another wrinkle-the Payroll Companies in your area can be willing strategic partners, as their landscape has also changed. ADP, Ceridian, and Paychex have all purchased/developed the ability to offer insurance products and services. The smaller, privately owned payroll services are looking to compete through alliances with independent agencies.

So…the question is, what should you and your agency do with this information? Opportunity is knocking on your door, but it conflicts with our industry’s history of departmental silos preventing whole account sales. Whoever the initial producer on an account is all too often is convinced that they are the only person capable of handling insurance matters without “screwing up the account.”

 

Here’s the plan:

Build some agency accounts that start with the worksite personal lines sale. Go for big accounts-you’ll get them. Once you have these accounts developing, work with the commercial producers who are working with you. Feed them the commercial account leads that come out of your worksite personal lines marketing initiative.

Working from a position of strength is always best.

Remember-a year from now you’ll wish you started today.

 

 

 

 

 

 Call today and we will help you explore your agency’s potential for success!

 

Make it happen.

Worksite Marketing Manager 2.0
Central to Agency Catalyst is Worksite Marketing Manager 2.0. This online system enables your agency to make multiple products from multiple insurance companies available to employees while requiring only one employer payroll slot.

Agency Revenue Tools - P.O. Box 155 - Fryeburg, ME 04037
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