20 Aug Prospecting: The No. 1 Source of New Production
If you’re a new producer and want to be successful, there is one thing you need to be very diligent about: Prospecting.
If you walk around your office and ask for other’s opinions, you’ll get a variety of options on how to go about this task.
Be careful who you listen to, especially if they are over 40. I’d ask to see their net worth statement before I started following their direction too closely, and here’s why.
There are a lot of 10- to 20-year veterans with a $300,000 book ready and willing to tell you what works and what doesn’t. Most of them do not believe in using the phone to set appointments. They will tell you that no one answers their phone any more. They’ve been saying that ever since voicemail arrived on the scene back in the mid-’80s.
They will tell you it’s an intrusive way to grow your business, so don’t do it.
When you ask them what you should do, they’ll tell you about a referral they once got that turned into some big dough, but they won’t have a process. They won’t have a system. They won’t have a full pipeline. They don’t win very often except on rinky-dink little accounts. And, their book isn’t growing. So, beware.
Develop a Prospecting Plan
Developing your plan is simple, and it’s never exactly right. That might drive you crazy, but some things in life you have to be flexible with.
Start with how much new business you want to win this year. Let’s use $100,000 to keep it simple. Then, determine the size of account you want in your book. As you do this, be futuristic, meaning if you write it this year, you have to renew it next year.
Many new producers write a lot of little accounts that have no potential to grow. In the years ahead, they end up with a lot of little accounts that produce very little money, and they get bogged down in the renewal and servicing of those accounts.
A nice, average size account is $8,000 in revenue. If you go much smaller, they will see insurance as a pure commodity. You could easily get stuck in that price/coverage mode that two-thirds of most producers are stuck in. Not a fun place to be if you want to be a “million-dollar producer” someday.
When you divide $100,000 by $8,000, you need to write 12 new accounts this year.
Now, look at your closing rate. If you are a value seller, you could have a closing rate in the 50 percent to 70 percent range. If you are a commodity seller, you could be as low as 15 percent to 25 percent.
It pays to be a value seller. Twelve wins divided by your high-end close rate of 70 percent means you need to propose 17 accounts. If you are a commodity seller, 12 wins divided by a 25 percent close rate means you need to propose 48 accounts.
This is integral to your planning. Once you get this figured out, you can start to concern yourself with how many dials you must make and how big your database of prospects needs to be.
There are two views on this. If you do a good job of researching your prospects so you know their relative size, and who the primary and secondary buyers are, then you can build a database of approximately 200 prospective firms and focus. With that group of firms, you plan your dialing schedule.
Do the math. If you plan on dialing 200 buyers approximately 16 times in a year, you will have made 3,200 dials. To break it down even further, that is only 20 dials, 3 days out of the week.
If you have the right technology to support that, you can bust through 20 dials in 30 to 40 minutes very easily.
The next challenge is planning what are you going to say to them to get their attention. If you don’t get them on the phone, are you going to use voicemail as a way to present your brief commercial?
Getting the Prospect’s Attention
I had a cold-call coach tell me with no uncertainty, “Do not tell them who you are when you get them on the phone. If you do, they’ll immediately stereotype you as a salesman and hang up on you.”
Instead, here is what she taught me to do:
Prospect: “This is Jim, how can I help you?”
Me: “Hey Jim, Randy Schwantz” (then silence).
At that very moment, your prospect will go through a search in their brain, asking themselves: “Do I know this person?”
They could just get rude, but most often they don’t, because you could be from their church, their social group, a client… who knows? In most cases, they will give you the benefit of the doubt and they will be friendly. Therefore, do not use your company name.
Prospect: “Hi Randy, how can I help you?”
Me: “Bold statement.”
What is a Bold Statement?
It’s something simple but gets their attention. For years, I have used this bold statement: “I help insurance agents bust the incumbent relationship. Is this an OK time to talk?”
There it is, simple, direct and the essence of what I do: Bust the incumbent relationship.
Obviously, if they don’t care about busting the incumbent relationship, they blow me off. If they do, then we engage in a conversation.
You need to develop your bold statement. If not, you’ll end up saying something like this:
“I was wondering if you are going to be quoting your insurance this year? We have a special program for (industry segment), and I’m not sure you will qualify. When can I come and tell you about it?”
“Are you looking for a second opinion on your insurance this year?”
How do you develop your bold statement? Ask yourself this: “What is something they really struggle with and probably don’t even know it? ”
Here are a few examples:
- Make the underwriter beg to get to write your account.
- Only hire people that won’t get hurt.
- Eliminate the 50 shades of gray in your insurance policy.
- Make your vendors pay for 15 percent of your insurance costs.
Don’t lie about what you can do. Hopefully, this will get you thinking about something bold.
Here is the last piece … if you are working a niche, with buyers with common problems, you need to send emails that position you as a resource.
Many times, someone is not ready to buy, and they are not in the market for changing agents. If you develop an email style that is short and pithy, you can position yourself with your emails and your voicemails.
Wrapping It Up … You Need a Plan:
- Who are you going to call and how often?
- You need to schedule time on your calendar.
- You need to develop a database of people you’d like to have as customers five years from now.
- You need something bold to get their attention.
- You need an email system to stay in front of them throughout the year.
Do these things, and you’ll be a master prospector and make a lot of money, have a great lifestyle and maybe become the next agency owner.