Читать книгу Profit from Change - Troy Korsgaden - Страница 5

You already know you need to embrace change and start seeing your customers differently, beginning with a needs-based approach. But maybe at this point you’re saying to yourself, “All right, fine. A needs-based approach sounds feasible, and it certainly serves my customers. I even buy into the idea that I’ll find the process energizing. But, well . . . how exactly does my agency actually profit from all that?”

Answer: You learn to leverage the opportunities that you already have by taking a holistic view. It’s a mind set, really. Each customer lives in a household. That household could be made up of just one person, two people, or an entire family. The people in the household could be related or not. Society has changed. Households are now diverse. It really doesn't matter. What’s important is how much information you have about the household and its inhabitants. Let’s look at both typical and atypical households. You’ll quickly see where those opportunities lay.

HOUSEHOLD #1

The Johnson household is traditional, consisting of a married couple with two children. They live in a house and have a mortgage. Both spouses work outside the home, so each adult has an auto. The children are 12-year-old Melissa and 16-year-old Scott. You know the Johnsons like to water ski and own a ski boat.

Using just this basic information, you can begin to determine the Johnson family’s insurance needs. They need homeowners insurance, they need an auto policy on two cars, they need a policy on their boat, they need life insurance on both adults, and they may need an umbrella policy. They also need a college savings plan for both children, and they need to save for retirement. Scott will be driving soon, which means they’ll need additional coverage for that as well.

This is where the change in how you think about your customers comes into play. You have to look at what the customer needs for his household instead of looking at just the existing policies. It’s a total reversal in how you regard your customer. Looking at the Johnson household in its entirety, what is the potential for insurance and financial services products? Count them up:

— 1 homeowners policy

— 2 auto policies

— 1 umbrella policy

— 1 boat policy

— 2 life insurance policies

— 2 college savings plans

— 2 IRAs

Minimal potential: 11 products

Other possibilities include life insurance for the children, disability insurance for the parents, health insurance for the family, and, as you learn more about the Johnsons, you may discover additional needs such as insurance on jewelry, furs, and so on.

HOUSEHOLD #2

The Smith household is upper-middle class. Mr. Smith owns an electrical contracting business with 10 employees. Mrs. Smith is a homemaker busy with three active children: Justin, age 10, Jennifer, age 4, and Jeremy, age 2. The family owns a vacation cabin in the mountains, two cars, and a boat.

Even though you don’t have much information on this household, it’s easy to determine the family’s basic needs:

— 2 homeowners policies

— 1 umbrella policy

— 2 auto policies

— 1 boat policy

— 2 life insurance policies on the two adults

— 3 life insurance policies for the children

— 3 college savings plans

— 1 retirement savings plan

— 1 commercial policy for the business

— Insurance to cover the business’s trucks

— Workers’ comp for the employees

— Disability insurance on Mr. Smith as the sole breadwinner

Minimal potential: 19 products

Does Mr. Smith’s business have a 401(k) plan for its employees? There may be potential to write insurance on each of the employees and their households. The possibilities just keep multiplying and multiplying. You’re starting to get the picture.

HOUSEHOLD #3

This household consists of two working professionals in their early thirties: John Jackson, a physician, and his live-in partner Mary Bennett, a computer systems consultant. They own a home together and each has a luxury automobile.

Their household needs:

— 2 auto insurance policies

— 1 homeowners policy

— 2 life insurance policies

— An investment plan for retirement

— An umbrella policy

Minimal Potential: 7 products

If you think beyond the basics, you’ll also see that Mary needs additional coverage on the computer equipment in her home office, and Dr. Jackson needs insurance for his medical practice and workers’ comp for his employees.

That’s just the beginning. This couple could be an excellent referral source to your agency from their peer group, so the potential for add-on business is excellent.

HOUSEHOLD #4

Take a look at the household of Penelope White and her two children, Michele, age 5, and Jonathan, age 7. Also sharing the household is Jim Carrington and his 10-year-old son Peter. Both adults work outside the home, they rent a house, and each adult has an auto to commute to work. What is the potential in serving the needs of this household?

— 1 renters insurance policy

— 2 auto policies

— 3 investment plans for college savings for three children

— 2 investment plans for retirement

— 2 life insurance policies

— 2 disability policies

Minimal potential: 12 products

These example households are presented to spark your thinking about the potential in your own database of customer information—and how to better analyze that information. I’ll help you do that in the following chapters, but even now, start thinking about how well you really know your customers. Do you know how they spend their leisure time? Do you know the names and ages of their children? Life changes, people change, they get married, they get divorced, they have children, they start businesses, they start a new career, the children grow up. All of these events trigger a change in the needs of that household. If you’re current with your customers you can capitalize on the possibilities and truly serve their needs.

The Deeper Penetration Approach

Now that you’ve seen how sales opportunities can multiply when you peer into each household with an all-encompassing view, take a look at what happens when you run some simple numbers based on patterns in our industry. For instance, it used to be that every household had the potential for seven sales. But as demonstrated in the previous examples, today’s households are much more diverse than in the past. That’s good news for us, because with all that diversity, the potential for sales has expanded to 10—at least. For an agency with 1,000 households, that means it has the potential for 10,000 new sales in its existing book of business.

Now take into account that our industry’s “hit ratio”—the average number of people you can sell to if you see them under the right conditions—is 20 percent. Do the math and you’ll see that the hit ratio factored with the potential means our 1,000-household agency can score an additional 2,000 policies in its book of business. The agency doesn’t have to drum up new customers to gain those sales. It only has to seize the opportunities that are already there. That agency? It could be yours.

What About Single-Policy Households?

Savvy agents are putting their energy into areas where the greatest return exists, and that’s clearly in the multi-policy household. They’ve learned that single-policy households simply aren’t cost efficient. That’s not to say that agents are abandoning mono-line customers without an opportunity to turn them into something more, but they’ve elected not to spin their wheels endlessly. Eavesdrop on a savvy agent about single-policy households and you’ll likely hear something like this: “We’re going to give this single-policy household a year and a half, three opportunities, one every six months, to make an additional purchase. If they’re not willing to meet with us, if they’re not willing to discuss these other opportunities, then they’re not sold on our agency. Therefore, we can’t afford to market them the same way we do somebody who has several different products with us.”

Here’s an illustration of why it’s more efficient to have 1,000 households with four policies each than 4,000 customers with one policy each. In either case it equals 4,000 PIF. With 4,000 customers your phone rings all day long. It costs you a lot to service their business. On the other hand, the higher product-density agency operates more efficiently and profitably because one phone call services all four policies.

Your enduring challenge, of course, is to deepen the relationship with each of your customers, and clearly that includes your mono-line customers. But as you increasingly address the challenge, it’s possible that one day you may come to the point where you decide that having a single-policy household no longer fits your business model at all. First you have to identify which customers don’t want to grow with you, and in Chapter Nine I outline the process to make that assessment quickly and efficiently. What you’ll probably discover is that a small percentage of your customers are content to have just one product with you, probably because you offered the lowest price at the time of purchase. Those are price-driven customers, which means they’ll leave your agency at the drop of a lower price. Obviously you’ll want to try and persuade them to expand their relationship with you, and you’ll want to continue serving their accounts with the professionalism all of your customers deserve. In the end, though, price-driven customers are poor investments and if they signal their intent to disengage from your agency, let them. The days of clinging to customers who care only about price are over.

Now that you’re beginning to look at your customers differently, in the next chapter I’ll take you through the steps necessary to look at your agency differently. Is it geared up and staffed up to capitalize on today’s opportunities? It's not that difficult to make it so, and I’ll show you how.

Chapter Highlights

— Today’s business environment requires a holistic view: that we see the potential each household offers.

— Life is always changing. To maximize the potential in every household, stay on top of the major transitions in your customers’ lives. What they need today could expand tomorrow.

— Gone are the days when households offered the potential for only seven sales. Today, the industry average is 10. Take advantage of it.

— Don’t spend a disproportionate amount of time with single-policy customers who refuse to grow with you. You want customers who are driven by more than price and will respect the needs-based approach you bring to them.