Profile of producers and their relationships with brokerage agencies
Insurance agents, like most working professionals, face unique obstacles everyday. There's the perennial prospecting challenge. Asking for referrals and working leads can be tough. And then there's the support and service they get from their marketing organization -- is it enough? What more do they need? And when is it time to search for something better?
This year, Agent Media, publisher of the Agent's Sales Journal and Insurance Marketing magazine, partnered with NAILBA (National Association of Independent Life Brokerage Agencies) to present our first-ever Brokerage Agency study. In this groundbreaking undertaking, we asked agents about their relationships with their marketing organizations and about how they do their day-to-day business. We also spoke with industry experts on how agents like you can find the right BGA and improve your overall practice.
Whether you're just starting out or you're a seasoned insurance professional, you'll find great value in this study as well as in the advice given by other professionals like you.
Partnering with a marketing organization
The first step to a successful career is finding a BGA that meets your needs. Many agents are always looking for new BGAs: Our survey reveals that in the past 12 months, 73 percent contacted a BGA they'd never worked with before, and the same number said they anticipate contacting a new one in the next 12 months.
But first, you have to actually find the right broker. You can search the Internet, check out direct mail and trade publication ads, or just ask around -- and it helps to talk to a happy agent. According to our study, 61 percent of respondents become interested in a brokerage agency by a referral from another agent. Forty percent say they attended a seminar that grabbed their attention, and 34 percent received a recommendation from a carrier.
Mike Corente of Corente Insurance Agency says if you can find another producer who can vouch for an agency, that's a great sign that they'll treat you well. "Otherwise, just go with your gut. If you're asking them questions and they're not giving you very good answers, if your gut's telling you this doesn't feel right, then walk away." Corente also suggests asking your questions in three different ways -- if the answers aren't adding up, that could be a sign to avoid the BGA altogether.
So now that you've found a BGA you're interested in, how can you tell if they're right for you? Corente says you should ask how long they've been in the business, whether they're a member of the Better Business Bureau, and what their release policy is. "That's really big, and a lot of people don't know about that," Corente said. "Basically, if a guy signs up with a broker and he's not getting the leads they promised him but the BGA has a release policy keeping him there for a certain amount of time, he's basically held hostage for six months or so and can't leave." Get something in writing up front, he says, to prevent this from happening.
Joe Corio of URL Financial also says that a BGA's longevity is a hot button issue. "There's a lot of new brokers who are just breaking in, and I think it's important to take somebody with a long reputation." He also advises looking beyond commissions and products: Check out their staffing and their Web site, and make sure they have the technology to help their business move more smoothly. "What you're looking for is service and relationships. They should go out and see people so it's not just a voice on the telephone line or an email address."
Fifty percent of agents indeed say live telephone support is among the most important services a BGA can provide, while 58 percent say access to multiple product carriers and product lines are essential; 38 percent prefer Internet access to forms, licensing, case status, etc.; and 27 percent look for product training.
And what would make you consider writing business through a BGA you've never heard of before? Forty-seven percent each say higher commissions and lead offers are important, while 35 percent look for new product offerings, 29 percent take referrals from other agents, and 27 percent start looking around when their current BGA starts giving them worse support.
A New York agent says he looks for professionalism, expertise, and the BGA's willingness to say they made a mistake. "The one thing that gets under my skin is when they fake what they're talking about. I'd rather somebody say, 'I don't know, but I can find out' or 'I don't know and can't find out.' It's important in this business to be 100 percent right, even if it takes a little more time."
It's important to do the legwork up front to prevent a less-than-ideal relationship with a BGA. Sometimes, however, it's unavoidable. An agent from New Hampshire said she's about 80 percent satisfied with her brokerage agency. "They could give me a little more information up front rather than letting me find out the hard way." And many of our agents surveyed feel the same way: 54 percent said they are generally satisfied with the support that they receive but would consider moving their business to a new BGA if a better offer came around.
But what constitutes a better offer? 35 percent say they'd leave if the BGA stopped working with the carriers their customers need, 32 percent if there were better financial opportunities with another BGA, and 22 percent said customer service challenges would drive them away.
There are other red flags that may indicate it's time to leave a BGA. Corente says you should leave if you're not getting follow-up calls or if you're on a lead program but you're not getting leads. Corio adds that when your phone calls and emails go unreturned, that may be a sign that you're not getting what you signed up for.
The prospecting barrier
"Some of the least successful agents, they stop prospecting when they walk out the door. The most successful are prospecting 24 hours a day," says Jason Kestler of Kestler Financial.
While that may be true, respondents of all income levels and experience name prospecting as their biggest challenge (69 percent overall). As Kestler says, however, some agents may simply need to dedicate a bit more time to the task: 68 percent of respondents spend less than 25 percent of their time prospecting.
Luckily, there is a simple way to effectively prospect: 58 percent of respondents say referrals are their favorite way to find new clients. Joanne Black, founder of No More Cold Calling LLC, agrees, saying a good way to start collecting referrals is through current clients, especially the ones you've built a solid relationship with. "You should have a list of at least 100 names and start working that list every single week ... you need to start by having a basic strategy."
Referrals don't have to come solely from clients, though, says Kestler. They can come from anybody you have a relationship with. Try talking to your bank teller, for example. "Rather than going through the drive-through, go into the bank and develop relation-ships there. Just being aware of your surroundings and keeping your eyes and ears open is one of the most simple and effective ways to prospect."
One of respondents' least favorite prospecting methods is cold calling, which only 4 percent of respondents say they use. Like most agents, Black can't stand the idea of cold calling. "I don't think anybody should ever have to cold call ... The returns are dismal. If you make 100 calls, you might talk to 20 people, make eight to 10 appointments, and make one sale. That's a 1 percent return on your time.
"When they get a qualified referral, however, they'll get a client between 50 to 90 percent of the time. We have a choice of how we spend our time. And we can bet those who have been in the business for 10 years or more, they are not cold calling."
Only 18 percent of agents surveyed say leads are an effective way of prospecting, and our experts agree that leads can be tricky. "You get what you pay for," says Kestler.
An agent from Overland Park, KS says leads can occasionally work well, but it's all in the quality. "If they were pre-qualified, that would be better. Go with somebody with a reputation for delivering what they're proposing and get some kind of accuracy rate or feedback from agents who have purchased the leads."
No matter what prospecting method you use, though, Kestler advises agents to think outside the box. "You don't want to do something another agent is doing in your area. You need to set yourself apart."
Polishing your practice
A good working relationship with a BGA and effective prospecting are essential components to any insurance agent's success, but some agents may lose sight of the little, day-to-day things they can do to improve their business. These include CE courses, conferences, and Webinars or online training courses.
Ninety percent of our respondents indicated they'd been to at least one conference in the past 12 months, and 95 percent said they plan to attend one in the next 12 months. Nineteen percent, however, say they would attend a conference outside their own state, and 45 percent say they'd only attend a conference in their own city.
Conferences can be important, however, in shaping an agent's career. One agent from Birmingham, AL said they do a great job of educating and training agents on different products and sales methods, and that these opportunities should be taken advantage of as much as possible. Plus, there's the networking benefit. "Try to become more closely associated with managers so you get help when you need it. They may not always be readily available, but if they're at the conference, there's an opportunity to rub shoulders with them and get to know them better."
The agent from Overland Park, KS says he attends three to four conferences each year. He recommends going in with an open mind and learning as much as you can. "I don't necessarily take notes because it bogs me down, but I try to absorb things through listening to various presentations."
Then there's professional designations, which are a good way of setting yourself apart and showing off your credentials. But choose wisely, says Kestler. "Designations certainly add credibility, but the other thing I always warn agents about is that there are designations upon designations ... Some add more credibility than others."
When looking for a designation provider, says Larry Barton, president and CEO of The American College, make sure you're getting them from an accredited university. Credible courses should take at least a year or two. "Be cautious and be wary of what I call 'weekend designation programs.' Some are very good and educational, but they are not a designation." As for which designations are the best to obtain, they're all good, Barton says, but he calls the CLU (Chartered Life Underwriter) the "platinum standard," while ChFC (Chartered Financial Consultant) and CFP (Certified Financial Planner) are also excellent designations. And remember: the more you learn, the more you earn: Barton says those who pass professional designation courses can boost their productivity from 28 to 58 percent.
Required by individual states to keep up an agent's license, CE courses can be taken in a classroom setting, online, through a textbook, or by logging onto an online Webinar. Our respondents clearly have their favorites: 63 percent prefer to take live CE courses, while 59 percent take them online. Corio says online events tend to be more convenient for agents as they have access to all the information and can refer back to it when needed. Also, classroom settings can sometimes promote products while online events provide more subjective information. Choosing a provider isn't as important as choosing a topic, he says: Go with one that you're not as familiar with so you can branch out and expand your knowledge base.
Seventy-eight percent of our respondents said they've logged onto an online event such as a Webinar or training course in the past 12 months, indicating they have a thirst for knowledge. They also allow you to continue your education, says Corio, and see what's new out there, thereby providing better service to your clients. Then there's the convenience factor, he says. "It allows you to learn about products without leaving the office. Rather than driving a half-hour, spending two hours, and then driving home, you can do it in 30 minutes without leaving your home. You can do it in your pajamas if you want."
There are many building blocks to achieving the ultimate success in your business. First and foremost, finding the right broker and fostering a relationship with them will greatly help your career: Without the right BGA, you could find yourself out in the cold. But the right BGA can only take you so far. Whether you're trained to prospect or learning it on your own, you won't get clients if you don't do it right. And don't overlook the seemingly little things. Continue your training, stay fresh, and always remember that the client comes first. When you take care of yourself, you set yourself up for better customer service and more sales.
Christina Pellett is managing editor of the Agent's Sales Journal. For more information on this and other studies, call 800-933-9449 or email ASJeditor@AgentMediaCorp.com.
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