Prospecting: A Lost Art?

My last post, "Why Producers Fail?" resulted in many requests for further information and specific requests for help.  The most popular feedback had to do with prospecting - how to do it, who should do it, and so on.  I will address prospecting in this article.

Many of you already know my feelings about this and the need for a division of responsibility in the sales department.  It's a proven fact that the number of sales people who can do prospecting, relationship building AND closing equally well is very rare.  And those who can are usually the owners of insurance agency! 

So just what makes a good prospector and what are the keys to success in this area?  Here is a brief list based on my interactions with many of WDC metro's insurance producers over the past ten years:

1.  Personality:  If you don't have the personality for sales, you will forever swim upstream.  My wife is a great example: She is not only brilliant, but also meticulous, understanding, and a great problem solver, but she is introverted and does not enjoy picking up the phone to call strangers.  Hey, she is standing here right now and just chimed in, "I admit, I'm afraid of rejection." I still love her!  My point is to make sure your producer (or prospector) has a personality in alignment with prospecting.  We give all of our candidates personality profiles which are specifically benchmarked for the minimum threshholds for high dominance, high extroversion, and low patience which are the basic predictors for prospecting and cold calling. Personality profiles do not lie.

2.  Blocks of time:  my son played big time college football and I had the opportunity to discuss how he plans his practices throughout the season since it seemed like there were so many moving parts to a practice depending on positions and time limitations.  He explained that everyone worked in 'blocks of time' with no 'block' longer than 45 minutes.  I heard later that Bill Parcells used the same system of blocks of time - he would plan his entire day in blocks of time.  There is a best selling book called, "The Eight-Hour Work Week."  Same principle.  My point is to organize your prospecting time in blocks of time.  Our internal cold-calling block in our office for my recruiters is 9 - 11AM and then 1 - 3PM.  No email, no outside calls, no social media, no nothing!  Just outgoing cold calling.  It's been proven that multi-tasking is highly overrated.

3. Touches:  the experts will tell you that you need to touch a customer 3 to 5 times to make a sale.  I believe in our industry that number is closer to five.  A phone touch is best, but email is effective too.  Spread them out to once per 30 days so that you can complete the cycle in 120 days or so.

4.  Measure Results:  Keep accurate records of these blocks of time.  This was discussed in the last blog, but it is very important to measure progress.  Once you have the metrics down, it is simply dialing the phone or sending out the email.  Let the numbers work for you.

5.  Script & Roleplay:  develop a script and review it with another successful producer or manager in your office.  It should be short, concise, and definitely less than 50 words.  Practice with other people (roleplay) and have them throw up obstacles for you to overcome.  Then re-write it again. To be really successful with a script, you must practice to the point of becoming fluent.  Several years ago, one of my most successful recruiters used to lock herself in her office and would tape herself, rewrite, tape, rewrite...it worked.

6.  Walk-away:  learn to sort out the qualified from the unqualified based on your pitch.  You have to be ruthless to not spend your time with potential customers who are obviously not interested. Learn to walk away. You have enough friends already.

7.  Get a good list:  You've heard of "garbage in garbage out". Same thing in prospecting.  You absolutely have to have a good prospecting list to start with.  Otherwise, you will become dispirited very quickly and burn out.  There are firms that specialize in these lists.  Use them.  A good list is worth its weight in gold.  Try your industry association for whatever industry sector you are focused on.  Chambers have them too. 

That's it for now.  Thanks for reading and let me know if you need any assistance with prospecting.  Glad to help!

Why Insurance Producers Fail

                                               
Because my firm specializes in insurance brokerage recruiting in the WDC region, I get a lot of calls from WDC area insurance brokerage hiring authorities asking me, “why do insurance producers fail?” The answers may surprise you…

I have fielded this question so many times this year that I now feel obliged to pass along my findings to my hiring authority colleagues. It is interesting just how similar the executive search business is to the insurance brokerage business.

It turns out that many of the same reasons why insurance sales producers are not producing new business are nearly the same reasons why my own recruiters are sometimes not successful. I will address the primary two reasons below:

1.  It’s a Numbers Game: it’s amazing just how many sales managers have not figured out the metrics of their own sales organization. For sure, each organization is going to be a little different, but across my client base, it’s pretty much the same process:

 Segment your market and identify/develop your niche,

 Get a list of those companies and identify the decision-maker,

 Make the calls,

 Establish the telcon connection and make introductory presentation,

 Schedule the sales presentation meeting,
 Close the deal.

 When the dust settles, fine tune your activity metrics and benchmarks

A typical insurance sales metric: 1) 100 targeted calls = 50 telcon presentations = 15 sales meetings/pitches = 3 deals using a 5:1 closing ratio. Repeat the same process 3 – 5 times over the next 90 days.

So why doesn’t every sales producer do this? Because many times there are no communicated benchmarks and/or metrics to measure activity against. There is no real accountability. If benchmarks and metrics are not measured on a regular basis and enforced, they do not exist. It’s just human nature.

Every sales organization has to determine their own metrics and benchmarks. Once this is done and effectively communicated to the producers AND measured each week or month in a group setting, your sales producers will either perform or realize they need help. Post it in the conference room so everyone can see how there phone/meeting activity fared against their peers. Believe me, nobody wants to be last. For new hires, within 60 days you will know the posers from the producers. Keeping unproductive producers around too long is one of the costliest mistakes you will ever make.

It’s amazing how similar our sales models really are because I sit down with my recruiters at the beginning of each quarter and remind them of how many outgoing calls they will have to make to prospective candidates to make $xxxx for the year. After ten years of doing this myself, I know the numbers. And at the end of the year, we tally up the calls from our call accounting system and, sure enough, the sales commissions they generate from placements is within a margin of error of +/- 5%. Amazing. As such, they look forward to making the calls every day! Because they know the metrics. Simple.

Do you know your metrics?

If you don’t have the metrics for a particular P&C or EB sector, just call me and I will give them to you. I have the averages.

2.  Ability to Connect: Throughout the years, my best entry level placements have been young teachers and journalists/reporters. Why is this so? Because they can CONNECT with people. They have advanced active listening skills. Listening and clarifying is in their DNA.

I was just telling someone this morning over breakfast about a well-known insurance brokerage client that invited me down to their headquarters office for some consultations on compensation structure and, afterwards, I was invited to a company function where some of their insurance top insurance producers were present. I was asked to interact with some of them and guess who the #1 nationwide producer was.

I was astonished to find out that the #1 producer was a non-descript individual sitting off in the corner of the crowded bar area reading the WSJ. I introduced myself and ended up having a 30 minute conversation about a wide range of topics from family to sports to music to travel. This slightly pudgy and horn-rimmed individual could really connect. And he listened to what I had to say. By the time I left the table I really felt like I had made a new friend. He could CONNECT.

Tough to measure on a personality profile or in a resume. But when you feel it, you know it. Look for it in your next candidate. Funny thing was that I asked him about his activity metrics and he knew his closing ratio to the decimal point.

Are your producers talking or are they connecting?

Your thoughts and feedback are important to us and greatly appreciated!

I will be discussing how to retain your top producers in my next blog before the Holidays.

www.mrfairfax.com

New Compensation Structures on the way

Many of my clients have been clamoring for a fresh new perspective on creating highly incentivized compensation schemes for their producers with the objective of making them more accountable and for providing unlimited earning potential.

So how did we do this? I mixed and matched from similar industries and related sales organizations to come up with what we have termed the, "Declining Base Salary Structure" (DBSS).

The DBSS has five unique characteristics: 1) A base salary for some number of months during Year One; 2) Activity-based benchmarks used to determine quarterly bonuses; 3) a reduced commission rate during the first year only; 4) A declining salary over 24 months commencing in Month 7; 5) A ten year vesting schedule to provide ownership over a long period of time to incentivize a producer to stay a long time.

This structure is being adopted by many local insurance agencies/brokers right now and is changing the way P&C (commercial lines) and Employee Benefits are compensated in the WDC metropolitan area.

Please give us a call and I will send you the spreadsheet.

2009 in the rear window

2009 was a wild year in the insurance recruiting business with our entire practice being turned upside down between a P&C focus to an EB (employee benefits) focus. Demand for P&C (commercial lines) professionals essentially disappeared during the course of 2009 whereas demand for EB producers skyrocketed through the roof with unprecedented demand. Just give me a call or send me note if you would like our recently completed 2009 Salary Survey for the WDC metro market.

Regarding 2010, client demand is already building and this is shaping up to be another big year for our recruiting practice. Right now, just in the WDC area alone, we have more than 25 urgent searches for EB producers and supporting cast. Sorry to say, P&C continues to be DEAD in the water. We are hearing that P&C pricing is even getting softer for 2010. One client told us that would need to be a dozen "Katrinas" in 2010 to get back to a hard market once again - wow!

Telemarketing - why the heck not?

This is one of those "no-brainers" that has me scratching my head... that is, why don't more insurance agencies employ a telemarketing component to their sales force? Most really good insurance producers are reall good because they can "connect with people" - they can build relationships AND close the deal...imcompatible skills with that of a telemarketer. So why do most agencies expect their producers to be both cold-callers AND deal-closers? Good question.

Being the largest search firm specializing in insurance sales on the East Coast and listening carefully to hiring authority feedback, we have a unique insight into what makes the great insurance agencies GREAT and the mediocre insurance agencies....well, not so good. Try revenues down 40% year over year. What is the critical factor between the winners and the losers? Simple: Telemarketing.

The great agencies "get it". One agency (that will go unnamed) has five full-time telemarketers who continually set up pre-qualified meetings for their producers. How good are these meetings? Try 2.75:1 closing ratio...not bad - industry average is 5:1...and in the soft market we are now in - forget about it! And morale is at all time high as the producers are out doing what they like best...meeting people and closing deals.

How do they keep the telemarketers honest and setting up good meetings - easy, the producers rate the appointments and compensation for the telemarketers is based, in part, on quality appointments. Producers in this particular office are getting between 8 - 10 qualified appointments per week. Wow.

Moreover, some are using the telemarketer position to hire entry level candidates in the hopes of growing a few good producers. Nice.

Welcome comments on this one.

Background Disclosure

If I had a nickel for every candidate who loses a job because they chose not to disclose either a DUI, Foreclosure, Bankruptcy, or civil/criminal offense, before the client background checking process commences, I would be a millionaire.

I had a candidate this past week tell me during the reference process that, "oh, by the way, Rob, I do have a DUI and filed for bankruptcy two months ago". Say what? They did not get the job...and I expect to see them as a Walmart greeter in the months to come because I doubt their duplicity will end with this bad experience.

The truth of the matter is that if candidates disclose "bad news" to their recruiter/hiring authority up front in the beginning of the process, we can properly manage expectations with the client and address the issue up front - when doing this, it has rarely been an issue....BUT if you wait until the end of the process, you will surely not get the job - soooooo, be honest and upfront folks!

First Half 2009 - Road to Recovery...

Many of you have already received our salary survey for H1 2009 which indicates that compensation levels are down to 2006/2007 levels, which is not surprising given that compensation levels (along with real estate prices!) seemed to be rising by the day last year during 2008.

At the same time, we are finding that many candidates are no longer focused on simply, "how much money am I going to make?" Based on our candidate feedback, money is now #4 on most everyone's wish list. #1 is corporate culture fit, #2 is work/family balance and employee benefits, and #3 is professional growth. The only exception is for 'hunter producers'...their #1 motivation remains,"how much money can I make and how much wealth can I create". Hurray! What would the world be without producers?? After all, who do you think pays the bills?

In the executive search business, summers are usually a slow time to revise business plans, etc., but we have three of our top four clients with the pedal on the metal to find top-shelf talent to bring on board in Q4 as they are already experiencing signs of an uptick in business - hey, let's keep our fingers crossed!

And pls let me know if you did not receive a H1 Salary Survey for insurance brokerage professionals in the WDC metro area. rob