You may think that your agency is performing well. You’ve got new business coming in and policies that are renewing.
But, are you achieving your full potential? No matter where your agency is in its lifecycle, whether you’re just starting out or you’ve been around a while, you can be better.
These are some common mistakes I see agencies making that keep them from achieving more. Where you are today is not final. If you want to grow and find yourself making one or more of these mistakes, you can get out of these traps.
Not Having a Business or Marketing Plan
You may wonder why you need a business plan if your agency is small and just starting out. But, it’s a critical roadmap that will guide your agency as you make operating decisions. Plus, if you’re trying to get funding or appointments, people will probably want to see your business plan.
Even if your agency has been around a while, you need to plan for the future. A business plan can help you devise where you want to go in the next year or several and how you’re going to get there.
Your marketing plan may be part of your business plan or a separate document. Either way, it is the guide to your marketing strategy. Without it, your marketing will be unfocused and not as effective. And, you’ll probably spend more than you really need to because you don’t have a clear idea of what you need to do.
Not Having Standard Processes
Without processes that are consistent and documented, it is hard for each member of your team to know exactly what they should be doing and how to do it. There will be inconsistency in the service clients experience. There will be inconsistency in how your team performs their tasks. They also won’t know what you expect from them.
Standardizing processes and then holding your team accountable to those standards is critical. Without this consistency and accountability, it’s hard to know how your agency is performing and where it can improve.
Relying Only on Referrals
Don’t get me wrong. Referrals are a great way to get new business. These warm leads are more likely to close because of who referred them to your agency.
But, if you rely only on referrals for new business, your organic growth will be lower than it could be.
This is why having a marketing plan is so important. It helps you identify the ways you will promote your agency, so you are driving new business from more than just referrals.
Focusing on Blanket Retention Rates
Retention rate is an important metric for every agency. But, a blanket retention rate does not tell the whole story.
For example, if your retention rate is 85%, how many of those 15% were first-year policies? How many were third year? The former may indicate a failure with new customer follow-up initiatives. The latter poor long-term customer retention.
To get a better idea at how you’re retaining customers, look at how long customers stay with your agency on average. You should also look at your retention rate by acquisition period. Read more on those metrics here.
Doing It All Yourself
When you’re just starting out, you have to do a lot of the everyday tasks yourself. And, it can be tempting to continue this habit as you grow. It is natural to want to be involved with everything as it’s your business. But, doing so will slow you down.
As an agency owner or principal, you have to ask yourself questions to understand if you’re focused on the right tasks for your business. Is this something only I can do? Am I sacrificing quality by not outsourcing or finding the right person for this task? Can someone else at the agency handle this just as well or better than I can? Is this taking time away from tasks only I can do?
Ignoring the Small Problems
You get a review that is not entirely positive. It’s easy to brush it aside as a comment from someone who doesn’t know the whole picture. But, what if you get a second review with a similar comment? That’s a trend and one that you shouldn’t ignore.
It’s easy to dismiss small problems if you don’t have the time or don’t like looking deeper at potential red flags. But, you need to be pragmatic. You have to look at the situation objectively and identify issues when they arise. Then ask yourself… Is this working as it should be? If not, why and what do I need to do to fix it?
What starts as a small problem often becomes a much bigger problem. And, bigger problems are harder and more costly to solve.
Underusing Your Technology
Most agencies are only using a fraction of the insurance agency software they buy. Whether it’s an agency management system or comparative rater, there are features available that you may not be using. Even an insurance agency website may have features available that you’re not taking advantage of. Not fully using your technology is a huge mistake.
Technology is a critical part of your business. Both in how it helps you bring in new business and also helps you service and retain your existing business. You need to audit your technology on occasion so you know what you have and how you’re using it and what technology you may need.
There are many insurance agencies that want nothing more than the status quo. I’m betting if you made it this far in this article, that is not you. If you want more, if you want your agency to be the best it can be, start looking for ways to correct the mistakes that are keeping you from, reaching your full potential.
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