3 Reasons Why Agency Owners Fail to Grow Revenue (and What to Do About It)

What happens when you put a self-directed team in the game against a well-coached team? If the talent is similar, then the well-coached team will win eight out of 10 times. But why is that?

If the coach is doing their job, they will manage the resources more strategically. They will motivate players and match up their strengths to gain the advantage. They will pull players out when they get tired and give them a rest — and change the defense to stop a dominant player on their team. They are the ones who set up offensive plays to gain a scoring advantage.

In most cases, a self-directed team will not do that predictably. If there is no coach, two-thirds of the players will be screwing around, while a couple of people are out busting their butts.

When there is no coach, there is usually no playbook for offense or defense. And if that’s the case, a few dominant players will hog the ball on offense, doing their “shake and bake” routine while drill-darting to the basket. But ultimately, they’re throwing up low-percentage shots and on defense, they’re sloppy getting back on a fast-break to prevent easy scores. Although talented, this kind of team would probably get crushed by a well-coached team.

Sports teams need leadership just like sales teams do if they are to reach their full potential. But leading a sales team usually becomes a problem for the agency owner and here are three reasons why.

Problem 1: You Have an Agency to Run.

As an owner, you are the one responsible for running the business. If you’re fortunate, you’ve got a great management team to handle all the day-to-day activities of running your agency. If you’re not so fortunate, you’ll soon feel like you’ve been drawn, quartered and burnt-out as an agency owner.

Between all the responsibilities such as underwriter, carrier and shareholder meetings, personnel decisions, planning, and meeting with your clients — you probably don’t have time to coach your sales team, too. The bottom line is that a substantial part of your day is roped, harnessed and ridden into the sunset — a huge chunk that you will never get back.

Problem 2: You Have Your Own Accounts.

A lot of your personal income is derived from your own personal production (unless you are running a major league agency and are the majority stockholder).

That clearly means one thing: Your book is your lifeline, and as such, you must make it top priority. You have to handle renewals, get involved in nasty claim messes, engage with underwriters, fight off competitors, write new business and grow your book. It is the easiest and fastest route to greater personal income.

Agency owners generally fall into one of these buckets. Either you’re a born seller, love meeting with clients and building your book because it’s just fun. Or you love the mechanics of the business — the operations. Getting your fingers in the overall planning and execution is the place where you derive a lot of work satisfaction.

Either way, you make a lot of your money from managing your book of business and that leaves a big gap on the sales frontier.

Problem 3: No Time to Develop the Team.

You run sales meetings and wish they were better, but you don’t have a lot of time to plan for them. You’re always willing to help a producer strategize on difficult accounts if asked. You conduct an annual goal setting and planning session with your producers.

You are involved with your sales team, but it’s like being a player-coach much more than a head coach. You don’t have much time to devote to it and don’t have systems in place to support it where you can train others to help you … so the burden stays on your shoulders.

Now it’s time to get real about it. Do you have a self-directed sales team because you are too busy? If so, play that video tape out for the next five years. What will be different if you don’t step in and step up to being their coach? You might have a producer problem, but even more so, you might have a leadership problem.

If you invested a little time and money in developing your ability to grow and develop your producers, they will grow and develop. It’s that simple. But if you leave it up to them and their own devices, most of them will do what people naturally do and that’s take the easy road.

If you want to get excited about the potential for growth or your agency, play three what-if games. Get your partners in the boardroom and using the whiteboard, map out these scenarios.

The first game is pretty simple — assume nothing really changes. Project how big each producer’s book will be in five years based upon their current and past performance. Will you be happy with that? If yes, go have a beer!

The second scenario is to assume that you can step-up and develop your middle 60% of producers on a faster growth path by training, coaching and holding them accountable to prospect (more appointments) and sell (write bigger accounts), retain (bump that rate by 1%). Where does that put you?

The third game: Do what you did in the second game, while adding new producers successfully each year for the next five years and determine where that would put you. Would it be worth it?

If you want to grow your agency revenue, you have to develop your producers, so they become better at prospecting, selling and retaining. And the only way to do that is to take the time to train, coach and develop them … just like head coaches.

Topics Profit Loss