We all want to grow smarter, stronger and faster, whether in life or in work. Agency owners are no different.
Every agency owner I have ever spoken with is growth oriented. So, why is it most insurance agencies only grow at the rate of inflation? While growing at the rate of inflation in the current inflationary environment may look more impressive, outpacing the average should always be the goal — and that requires something extra.
Agencies with extraordinary growth have not necessarily toiled day in and day out to reinvent the business. Instead, they often take small, but effective actions to supercharge their results. Here are 12 steps anyone can implement that will encourage the kind of growth that leaves even today’s rate of inflation in the dust.
1. Seek out efficiencies.
Comb through your financial statements and operations looking for every efficiency you can find. While this may not grow your top line it will grow the bottom, which is where you should focus. Years ago, I was boasting to a friend about our agency’s top line growth. He said, “I don’t care about top line growth, I only care about growing the bottom and everything I do is focused on that.” That was an eye opener. Break out the benchmarks and use them to stimulate your thinking. Compare each part of your marketing spend to ensure you are getting real results. Strip out every expense that doesn’t make your business grow profitability.
2. Survey and analyze your competitors.
What are they doing that works? Copy their winning strategies. It’s a lot easier to adopt and adapt a successful strategy than it is to create one from scratch.
3. Examine your prospecting and marketing activities.
Determine where each of your customers came from and learn how to do more of whatever it was that brought them to you. Stop doing what’s not working. Take the time, energy and investment saved in halting those tactics, and invest it in what works.
4. Coordinate strategic alliances.
Brainstorm strategic alliances with businesses that also sell to your customers. Ask yourself how you can improve your customers’ lives and businesses by collaborating with their communities. Many agents do this with mortgage brokers, car dealers and realtors, but the potential possibilities for partnerships are endless.
5. Keep an eye on capital.
Analyze how much cash and credit you have available and build a plan to grow it. Do you have a line of credit at a local bank? If not, get one. If you do have a line, consider increasing it. Do you have a good amount of retained capital? If so, save more of your profits. Now, go use those resources to hire a new producer or buy another agency or book of business. There are literally thousands for sale of all sizes. It is much easier to grow by acquisition than organically for most organizations.
6. Boost your marketing efforts.
Build a content marketing machine to attract the new customers you want. Most content that I see agents using is not effective. That’s because it’s generic, trite or the same carrier-produced content a dozen others in your market are using. Instead, think about the situation your clients are in, the problems they face and potential unique products or services you offer or to which you can introduce them. Develop your content with that in mind because those are the things your prospects want. Now, only post where they’ll find it. Do not post all over the place. Practice “narrow casting” instead of “broadcasting.” You’ll spend less and your ROI will go up. If you don’t think you have the capabilities in house, outsource. Look for a three-to-one return on your investment. Rinse and repeat.
7. Expand your geographic reach.
Once step six is working for you reliably, expand your marketing into adjacent geographies. You don’t need new local offices or employees to handle this business. Modern video communications make this unnecessary.
8. Reinvest in your business.
Most agencies are “lifestyle” businesses where the owner’s personal needs really come first. That approach never leaves enough money to invest in growth. Stop and recenter. Reinvest at least 50% of your profits (and there will be more profit if you’ve done a good job at step one above) in the agency. Look for a three-to-one return on your additional investment. Your lifestyle will actually get a lot better!
9. Set BIG goals for growth and profit.
Have you ever wondered why some people seem to do better than others even though they don’t have more talent, ability, investment capital or hours in the day than anyone else? It’s because they set bigger goals. John Bowen, a successful business coach in the wealth management industry calls this being “successful on purpose.”
10. Review culture and compensation.
Develop a company culture and compensation program that makes every employee an owner. Do you want more account rounding? Pay commissions to CSRs. Do you want your business to get written with your most lucrative carriers? Pay more for that and less when the business is placed somewhere else. Do you want lower expenses? Ask your people for suggestions and reward them for their ideas. Do you want a bigger bottom line? Institute profit sharing. Do all of these things and you’ll get an additional bonus — your agency will self-recruit and your turnover will drop. This will drive revenue and lower expenses.
11. Invest in yourself as a leader.
Take some of the increase in profits you’re now generating and invest it in yourself. Join one or more mastermind groups. Hire a business coach or join an entrepreneurial coaching program. You are the determinant of your own success as a business owner. Is there any better place to invest than in increasing your own capabilities? A corollary to this is simply to read more. It’s well established that successful people are readers — because they are insatiable learners. According to hive.com, Warren Buffet reads eight hours a day and Mark Cuban reads more than three. How much time do you invest in reading?
12. Take time off.
Related to step 11, increase the amount of time you spend not working. Many agency owners are on call 24/7, work every evening and every weekend, take few vacations, and always keep their cell phones with them and turned on. This just means they never get true rest where their attention isn’t at least partially on their business. This creates chronic fatigue, crisis management and clobbers creativity. Start managing your time with real limits, time off that has zero business distractions and where your availability to clients is controlled. You’ll be better rested, more creative and people will respect and value your time. The ultimate result will be faster growth and more money. When I started to take time to rest, my income doubled in two years and has grown by at least a third on average every year since.
Are there more ideas for exploding your growth? Absolutely. I’ve got a lot more and that’s just me. I’ll bet you have many you’ve thought of, too. Maybe you just haven’t implemented any of them. Well, now is the time to start!
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