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Taking 14 Sales Steps to Catch Up: Average firms lose 10% to 15% of their clients annually—so you might begin your new year behind your last.
Leader's Edge, September 2008
Fast Focus
- In a great sales culture, producers spend the majority of their time selling.
- Superior service supports a sales culture driven by results.
- Whatever your competitive advantage, build it seamlessly into your sales culture.
Halftime's over, and your team may be ready to take the ball and run. On
the other hand, turnovers could be the story of the game. How's your
record against key competitors? What about your gate attendance? What
are your firm's prospects of scoring big during open enrollment?
Your organization is primed for greatness, but how do you take full
advantage of your preparation? The answer lies in developing a truly
effective sales culture.
Your players are in position, confident and ready to spring. What do
they need from you to consistently get a first down with client
proposals and regularly get into the end zone with new business?
There are effective steps you can take to build a team sales culture and
have competitors—not just John Madden—singing "Katie, Bar the Door."
Why is a sales culture so necessary? Because standing still is not an
option. You cannot rely on the market to get better and save your bacon.
Yes, soft markets will stifle growth and profitability, and no,
insurance is not different than other industry. Ask anyone in
manufacturing who delivers products to Wal-Mart or other large chains
and you'll get an earful about pricing pressures.
Therefore, an aggressive stance is the only option. Even top-quartile
firms lose 5% to 10% of their business each year. Average firms lose 10%
to 15%. Couple this with rate decreases also amounting to 10% to 15%,
and before you sell one new account this year, you could conceivably
open your door with no more than 85% of prior year revenue. These
sobering statistics show why developing a sales culture is so important.
Your motivation may be survival, but it should quickly turn to success.
Here are 14 ways to help you build a great sales culture.
BE DRIVEN BY RESULTS. Most agencies today are process-driven, focused on
performing tasks and getting things done. That's fine, but each player
can take the field and follow the playbook and you can still lose. The
key to moving those first down chains is to aim for results, not just
the completion of tasks. This frees you from the tyranny of the market
because you are following your own initiatives, being proactive rather
than reactive. A results-driven team is enabled by the sales culture.
ORGANIZE FOR GREATNESS. Many firms do not truly understand what a sales
culture is. Often, brokerage leaders will think they have a sales
culture in place, but when I ask what the prime characteristic is of
their organization, they will say "great service." When I hear that, I
know they are misdirecting their efforts. Service should be an agency's
baseline, not its differentiator. It's important to keep the hot dogs
warm and the beverages cold, but to really satisfy the fans, your team
must win. That translates to new sales. An agency truly organized around
a sales culture will have great service, yes, but the structure allows
producers to spend the majority of their time selling. My mission
statement for an agency: "A true sales organization is one that creates
an organizational structure that results in great service but allows
producers to spend the majority of their time selling."
VISUALIZE SALES. The thought of sales energizes people. You need to
promote this concept: "We are a sales organization first, and our
service supports our sales." Great sales organizations are fed by
positive thoughts and energy. It is contagious and spreads throughout
the agency, at all levels.
KNOW YOUR NUMBERS. Big producers are always focused on their goals and
their production. A producer's primary goal is to generate new sales.
The way you gauge that effort is to set goals for the number of calls to
make, letters to mail and introductory meetings to schedule to generate
those presentation and sales opportunities. In this scenario, both sales
and support roles are well-defined. Knowing your numbers allows you to
increase conversion and closing ratios, which are the foundation of
achieving your sales goals.
CULTIVATE SERVICE PROS. While you're enabling producers to focus on
sales, you must also lay the responsibility of service onto your account
managers. Producers know they are not the key to service, and great
producers recognize this is not the best use of their skills. On the
other hand, account managers and customer service reps can spend every
working moment honing their service techniques. Keys to superior service
are personal attention and addressing issues promptly.
STAY ALIGNED. Teamwork is essential to the sales culture. Each person
must understand that the overall agency goals and objectives are
achieved only when everyone works together. They must believe the old
adage that a chain is only as good as its weakest link. Therefore, align
the links in your sales and service teams properly and have them join
arms for strength. Each member of your "High Performance Team" must be
in place on the field, with one eye on the ball and the other on
interactions with fellow players in sales, service and support.
REWARD NEW BUSINESS. Compensation plans need to be structured to reward
new business production. That is a much better sales model than
producers "getting rich" on renewal commissions. Also, build in rewards
for exceeding goals and penalties for falling short. Further,
support-employees should have incentives to help the agency achieve
sales and retention goals.
PRACTICE YOUR COACHING. Sales management is practiced daily, but do you
also exercise your coaching skills often? If not, begin now. Sales
management is all about setting goals and monitoring performance and
achievements. Work with your producers to set those goals, to ensure
full buy-in. Sales coaching, on the other hand, urges your producers to
do their best through focused encouragement and skill development. When
you have both management and coaching underway, track progress through
key metrics, such as:
- Minimum new business development
- Regular review of proposals in the pipeline
- Closing ratio
- Average revenue per account
- Revenue per employee.
BREAK DOWN THE 80/20. The average agency lives in the 80/20 world, and
if excellence is your goal, you must break out of that mold. The
equation can be tracked at least two ways: 20% of clients represent 80%
of revenue, or 20% of producers generate 80% of revenue. Either way, the
best sales organizations don't practice this. Instead, push all
producers to achieve. Traits of a high-achiever include:
- No excuses: They do not fail because it's not in their genes to
fail.
- Aim high: Their goals are higher than the average producer.
- Self-monitoring: They need less coaching or management because
they know their numbers and monitor their own progress.
- Diligence: Great producers are diligent about their activities.
They're also disciplined, focused and driven. What else do you
need?
STRATEGIC CROSS-SELLING. Highly profitable sales organizations excel at
cross-selling or rounding out accounts. This often is led by account
executives and managers who have cross-selling goals as part of their
performance objectives.
STRATEGIC HIRING. In a true sales culture, recruiting great producers is
an ongoing activity. Hiring becomes a key strategic initiative, and
yearly hiring goals are set. In the best organizations, all employees
understand the value of recruiting and hiring, and monetary rewards are
often paid to employees who recruit or provide leads.
EFFECTIVE TRAINING. You often hear that only one out of three new
producers will be successful and that it will take up to 36 months to
determine whether the new person can excel in your program. This is not
the case at organizations with an engrained sales culture because such
an agency will inevitably have an effective training program. In that
situation, the success rate rises from 33% to 75% or more. The
validation period is reduced by at least a year. You can name the
brokerages and agencies with top-notch training programs across the
industry, and there's a reason they are well known. Every ambitious
producer wants to improve professionally, and those firms that offer
superior training will be the talk of the industry.
MAKE SMALL BUSINESS ITS OWN UNIT. Great sales organizations move small
accounts into a small-business unit as its own profitability center.
Often in those cases, such accounts do not pay commissions to producers.
Agencies can measure each account's revenue to determine profitability
and then eliminate the unprofitable accounts.
USE TECHNOLOGY ADVANTAGEOUSLY. Great agencies are almost always fully
automated. Agency management systems are only as good as the information
they contain and how they are utilized. Similarly, great sales
organizations use technology to their advantage. Service and support
staff can utilize technology to mine the data needed to cross-sell and
round out accounts. The firm operates effectively because the technology
enables them to perform their jobs quickly and efficiently.
Out of all these recommendations for making your agency into one with a
great sales culture, a couple of things stand out as key drivers. First,
service is not the differentiator that will enable your sales culture.
If your sales efforts are based on simply quoting business, you will be
right in line with every other average agency out there.
Second: Your people are not your competitive advantage. In all my years
of consulting, no one ever told me they had average people (or average
service). Touting a wonderful staff will get you in the door of a new
prospect at the same rate as every other agency—no more, no less.
However, what you can sell as a competitive advantage—whether it's a
special niche, markets, a unique service or product—must be built into
your sales culture as smoothly and seamlessly as a Super Bowl
quarterback connects with his 6'5" wide receiver 30 yards downfield.
That's not just a two-man effort.
Creating a great sales culture takes efforts on many fronts, from hiring
and training to coaching and being tech-savvy. It requires an approach
that includes thinking two plays ahead, always keeping your eyes on the
competition. But, hey, that's why you got into the game, isn't it?
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