How to Develop a Sales and Marketing Plan

By and | September 9, 2013

Every year a firm should develop a new sales and marketing plan. This is an essential element of strategic planning. Many carriers want to meet with the agency owners to set the game plans for the coming year and it is best for agencies to be proactive in this process. To be a “preferred” agency it is often required that an agency have a sales and marketing plan.

The best starting point is to first define the agency’s “personality.” The “personality” of an agency is the book of business and it will in turn define what to look for from the various markets and the selection of new markets to represent. For example, a large urban agency that sells only very large commercial accounts will have different expectations than a small town agency that sells all lines of insurance.

Start by finding out what the split of business is along each line: personal, commercial, life, group benefits and program business, etc. Then calculate the average size of account for each line. Also, how much of the agency business comes from the top 10 accounts?

Finally, analyze the distribution of business and identify the top five industries for the agency and by producer.

It is important to also perform all these same steps for each producer in the firm. The big picture is good for identifying the trends. However, the detail on each producer will define how the journey will take place to get to the goals. It is the individual producer’s goals that define what the agency can expect for the overall agency goals.

The analysis of the producer’s top 10 and top 50 accounts plus reviewing the most common industries in that producer’s book will define what they like to sell and their expertise. These should be the initial areas of focus for future growth. However, the producer’s focus needs to be in line with the products and carriers available, as well as the overall marketplace conditions.

Bottom Up

It is easier to create a sales plan from the bottom up. Overall new sales goals for the agency should be determined by the sum of new sales goals for each producer.

An experienced producer in a typical agency should generate at least $40,000 to $60,000 in new commission each year. For large firms with large accounts, the amount would be much higher, maybe even $75,000 to $150,000, or more in new commissions.

The hit ratio of each producer needs to be determined. Hit ratios less than 25 percent to 33 percent cost the agency a lot of time and money. The technique of producers with low hit ratios needs to be checked and adjusted. Often, the producer fails to pre-qualify the prospect. Sometimes producers just are not approaching businesses that match up with the products the agency has expertise in writing, nor markets that are competitive for those classes of business. Use the successful producers as a model.

After adjusting the initial target goal for each producer based on time available, hit ratios, attrition rates, niches and centers of influence, a good, solid goal will result. The overall agency goal is then the sum of each individual goal.

Writing the Plan

When writing a sales and marketing plan, list the current overall hit ratio, average new business produced and the average size of account and breakdown of the book of business. Write next to those numbers the target growth for the next year. Below that write two or three actions that need to be accomplished to reach those goals.

Then list the five most important markets (not necessarily the largest) and the agency’s volume with them. Write realistic agency production goals next to those numbers. Next, list one or two markets that you do not have, but feel the agency could use. Write down the dates you will approach them (create action plans by carrier). Finally, list two or three markets the agency has outgrown and should exit.

Share the Plan

The beautiful thing about a well-written plan is that it does not need to only be used internally. It can be shared with prospects, clients and insurance companies. Such a plan helps the firm look organized and efficient and, in reality, makes the agency management and sales force feel directed and on task.

Oak and Associates now offers a template for a sales and marketing plan for $275 (or $499 with an hour of consulting).

About Kelsey Johnson

More from Kelsey Johnson

About Catherine Oak

Oak is the founder of the consulting firm, Oak & Associates, based in Northern California and Central Oregon. Oak & Associates. Phone: 707-936-6565. Email: More from Catherine Oak

Was this article valuable?

Here are more articles you may enjoy.

From This Issue

Insurance Journal West September 9, 2013
September 9, 2013
Insurance Journal West Magazine

Top Workers’ Comp Writers; Intellectual Property: Copyright, Trademark, Patent & Cyber / Media Liability; Residential Contractors