David E Estrada is the founder and managing director of
Rain Maker Advisory. Here he discusses how to grow your book of business.
Principle #1: Client retention
Client retention is paramount. You can’t grow your book of business if you’re losing clients. Consistency and continuity are critical for higher retention. One of the critical components of increasing client retention is developing a 12-month service calendar or game plan. These identify what you will do, when it will be done, and who will do it. I recommend doing this for any client but especially for your top ten clients, as they are often being courted by other brokers and being asked what their broker is doing about X, Y, and Z. Providing an annual service calendar goes a long way to preventing competitors from exploiting missing elements of what you are providing in terms of an annual service plan, or even the absence of a plan being deployed, to acquire your client!
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Social interaction is a key element that contributes to client retention and should not be underestimated. One of the benefits of social interaction is that is allows you to capture important nuances of information that don’t necessarily lend themselves to formal business discussions and common business etiquette protocols. For example, in a formal business setting, when your primary buyer is with their work peers at the table they may feel uncomfortable in revealing certain aspects of the firm’s culture or issues that are material for you to know in helping you generate a happy client over the long term. A lunch, a dinner, or even just a morning coffee creates the opportunity for an informal exchange. Such discussions can help you understand some of the entity’s political nuances that will help you both serve and preserve the client over the long term.
Finally, take time to understand those individuals with a stake in your services 360 degrees around your primary buyer. So in addition to your primary buyer, who are the stakeholders around them that can weigh in on a given decision? What is their agenda? What’s important to them? How can you help your primary buyer successfully address the questions those stakeholders may have? Your buyer has people to please within their organization, so helping them deal with stakeholder concerns and preparing them for those discussions is not only key to client retention over time but also contributes to the process of new client acquisition.
Principle #2: Account rounding and cross-selling
Keep in mind that many relationships are substantively formed during the immediacy of a sales transaction, which can leave many boxes unchecked. Frequently what happens is that there is a long courtship period—a year, or even two or three—but when they are ready to make a move, they require that your work be done very quickly in order to secure their business. When that happens, many boxes can be left unchecked. Doing a quarterly sweep of your accounts can address this issue. Have you written all the lines of coverage? Have they been introduced to the other side of the house? What is missing that needs to be fulfilled during the course of a sustainable relationship?
Many buyers don’t ‘give you the baby’ right away; they intentionally start small and see how you perform before trusting you with greater opportunities for engagement with other lines of coverage. These ‘quarterly sweeps’ looking for gaps and new opportunities can be a significant contributor to higher retention because the more lines of coverage that you write for a given client, the higher the retention rate.
I have heard from many brokers that they want the whole thing or not at all, but I believe that’s foolish. I believe that it’s important to be patient and not ‘draw lines in the sand’ in terms of writing their business. It’s okay to establish yourself in terms of one or two lines of coverage, and then based on your performance throughout the year, you can vie for the other pieces of business as the relationship develops. This is especially important in cross-sell business because of the very nature of the introduction from someone that already holds business with that client – essentially, you don’t want to embarrass the person referring their client to you by taking an extreme position in terms of wanting all their coverages or not at all!
Principle # 3: Converting ‘non-clients’ into clients
This is the most critical principle of book growth that defines a successful broker. At the end of the day, the ability to convert non-clients into clients is the key to being a successful producer over the course of your career. If you can do this, everything else will tend to fall into place, so this is a key area to focus your skills. A significant, yet often dismissed contributor to new client generation is the sheer act of research. Researching a prospect takes minutes and will allow you to see things that can help you make a more impactful approach. Specifics are everything here. You want them to feel like your approach was specific to them and their circumstances. That’s what will differentiate you and help you gain greater access to potential clients versus those using a ‘canned-one-size-fits-all’ approach or using some sort of linguistic formula, ‘Pop’ psychology, or other trickery intended to manipulate someone into a conversation.
Focusing on niche situation or buyer properties is a hallmark of top performing producers. We know as a fact that most producers with million dollar books and above tend to focus on niches, specific situations, or buyer properties. Of course most of us start our careers with an ‘anything and everything’ prospecting methodology. Most of us will write business with people that we know and have known for a while regardless of whether they own a plumbing store, a bakery, or a machine shop. But we know that books like that ultimately flatten out using this approach, and to go beyond that, it’s important to focus on some specific niches when these thresholds have been reached in order to sustain the growth of your practice over time.
As you move upmarket, understanding the roles and concerns of different stakeholders becomes more important for success. Main Street businesses are typically characterized by one highly empowered buyer, whether it’s the business owner or the office manager. But, when we move up market, transactions are often defined by the fact that there is more than one stakeholder in the buying process. Therefore, understanding the roles and concerns of the different stakeholders involved in the buying process is more important for success with mid-market businesses than it is with Main Street businesses.
When you’re competing for Main Street business, it can feel like everyone and their brother owns an insurance agency or knows an insurance agent, so the competition is broad. In mid-market, you will probably only see five- to 10 prevailing brokers competing with you for that business. Tracking them, whether it’s on Google alerts or following their LinkedIn company pages, will help you keep abreast of what those competitors are doing and help you maintain a competitive stance within your market.
I encourage targeting large accounts by how long it will take you to make up for it if you lose them. I know this is a somewhat unorthodox concept and position to raise for most readers – however doing so is prudent in the long term. Would it be six to 12 months, or longer, of your typical annual new business production to make up for losing one of your largest accounts?
Some producers evaluate this issue by examining it in terms of a factor of their largest current account, whether it’s a multiple of 1.5 or 2.0 or 3.0. For example, imagine your new business run rate is $100,000 of new business per year, and by happenstance, you write a $200,000 commission case. It’s important to understand that if you lose that case, it will take you roughly two years to make up for it. Many producers like to chase progressively larger pieces of business, and of course writing progressively larger pieces of business is the key to sustainable organic growth over time, but just be sure to keep your eyes open and understand the time it will take you to make up the business if you lose it. Use caution. Don’t forget that your client management team, who may have historically been familiar with managing smaller accounts, may find it difficult or a stretch to manage something much larger and may need development to preserve that business over time. As we all know, it’s one thing to write a piece of business, and another thing to keep it!
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Principle #4: Strategic alliance partners and center of influence development
This type of initiative increases deal flow over time. It compresses the courtship cycle of each specific new client referred because you’re leveraging the credibility of the person who is referring you, who has worked with them and established a relationship with them over time. This allows you to duplicate yourself in terms of prospecting activity by orders of magnitude. However, this type of business should be pursued in concert with your active new client development strategy, not in lieu of it.
Over time, the clients you develop from the center of influence relationships will be quite lucrative, and retention will be high. Center of influence and strategic alliance partners are great in that channel of business for advocacy if relationship friction occurs with a client you hold which they referred to you. For example, if you’re delivering a renewal that is significantly larger than last year’s premium and you’ve done the best that you can to work it down, it’s great to work that business through the center of influence after you deliver their renewal.
As an illustration, you might ask the center of influence, “Did they say anything to you? How upset are they? Are there any flames that I could squelch? Any additional work to keep them happy that’s required from your perspective?”
Remember that center of influence and strategic alliance partners contribute to our competitive intelligence - networking opportunities, professional branding, and prestige. In working with them, you may have access to events where your buyers congregate that were not possible to attend on your own. Attending those events with strategic alliance partners can help with branding and visibility within the local business community, and, of course, it can provide access to viable prospects. It’s that significant.
Principle #5: Sales initiatives
These are coordinated outbound marketing efforts designed to acquire specific types of businesses by niche, situation, or buyer characteristics. A sales initiative allows for efficient marshalling of both internal support and enterprise level support. When I was producing business, the more I defined what I was doing with leadership the more support I was able to obtain from them for those given initiatives.
For example, if leadership asks about what you want to accomplish and you reply that you simply want to write more business, you will get less support than if you reply with specifics like these: “I want to launch a biotech initiative,” or “I want to develop a brown bag lunch initiative where we invite clients and prospects to learn about new elements of legislation,” or “I want to work on taking one of the ten largest accounts away from our biggest competitor”
The specificity of these initiatives will enable leadership to get their arms around what you’re doing and support it much more effectively than a general objective: thereby helping you achieve the results you are seeking.
Next Monday, in part two, David Estrada will examine a host of growth strategies.
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