organic growth: 4 key strategies to succeed
DESCRIPTION
It\'s no secret that Organic Growth is one of the many challenges Agency Owners are facing in today\'s Insurance Marketplace. This webinar will concentrate on FOUR Key Strategies an agency can use in 2012 to successfully grow organically. Join this webinar to hear Jared Roy and Josh Morgan, MarshBerry Consultants, explain how you can implement a proven process for Organic Growth through Organizational Infrastructure, Differentiation, Proactive Sales and Producer Investment. If you\'re an insurance agency owner, executive, or shareholder interested in growing your agency; this webinar has the answers. In this 30-minute webinar we will reveal: • Key strategies of organic growth leaders • Examples of how to take action now • Secrets of high performing agencies • And more...TRANSCRIPT
2012 Marsh, Berry & Company, Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Company, Inc.
Organic Growth: 4 key strategies to succeed
Presented by:
Josh Morgan Consultant
[email protected] 440.392.6579
Jared Roy Consultant
[email protected] 440.392.6560
2012 Marsh, Berry & Company, Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Company, Inc.
Agenda
MarshBerry Overview
Organic Growth Background/Statistics
4 Ways To IMPROVE Your Strategy
Review
Q&A / Discussion
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2 Spring 2011 BANK/TASC Summit 2012 Marsh, Berry & Company, Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Company, Inc.
Marsh, Berry & Company
Information Services
Management Consulting
Exchange Networks
M & A Advisory
Managing Peer-to-Peer Network Groups for 15 years
6 Networks with over 186 partners across the US, Canada and Puerto Rico
Network Clients represent over $2.3 billion in collective broker revenue, and $24.5 billion in total insurance premiums
MarshBerry is dedicated
to enabling insurance distributers to LEARN, IMPROVE and REALIZE
their fullest business potential.
Founded in 1981 4 Offices: OH, CA, TX, MI Privately-held Perpetuated Ownership 15 Shareholders
Clientele Includes: Insurance Agencies Brokers Wholesalers Credit Unions Banks Insurance Companies
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3 Spring 2011 BANK/TASC Summit 2012 Marsh, Berry & Company, Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Company, Inc.
Upcoming Network Summit Total Agency Sales Culture (TASC)
GROW 2012 Fall TASC Summit SEPTEMBER 10-11, 2012 FOUR SEASONS DENVER
State of the Industry Presentation General Session focused on Healthcare Reform Strategic Issues Groups Educational Breakout Sessions
• Employee Recognition • Future of Technology in the Industry • Compensation and Operations
For more information: www.PeerNetworks.MarshBerry.com
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4 Spring 2011 BANK/TASC Summit 2012 Marsh, Berry & Company, Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Company, Inc.
Organic Growth Background/ Statistics
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2012 Marsh, Berry & Company, Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Company, Inc.
GROWTH DRIVERS
1. Acquired Growth
2. Organic Growth Agency Control a. Add a new Product to the Mix Limited b. Increase Price Limited c. Sell More Existing Products/Services Direct
How Can We Grow? Economics 101
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2012 Marsh, Berry & Company, Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Company, Inc.
Growth Stats Are your new sales outrunning your leakage?
Trailing 12 Months as of 2011 Average Top 25% High Growth
New Business as % of Prior Year Commissions & Fees
12.6% 19.4%
- Less: Leakage/Rate -10.3% -7.9%
= Equals: Organic Growth 2.3% 11.5%
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2012 Marsh, Berry & Company, Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Company, Inc.
The Solution Four Main Areas of Assessment
I. Organizational Infrastructure
II. Differentiation
III. Proactive Sales
IV. Producer Investment
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2012 Marsh, Berry & Company, Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Company, Inc.
I. Organizational Infrastructure
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2012 Marsh, Berry & Company, Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Company, Inc.
What Does Your Org Chart Look Like?
CEO
Dept Heads
Employees
Producers
CEO
Employees
OR…
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2012 Marsh, Berry & Company, Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Company, Inc.
Practices of High Growth Agencies New Business Comparables
New Producer – less than three years Senior Producer – over three years and <$500k book
Executive Producer- over three years and >$500k book but < $1M Million $ Producer – over three years and > $1M book
Too Often, the Agency Infrastructure Does NOT Promote New Business Sales. Agency Exec’s Do Not Provide the Resources, Tools, and Accountability Metrics to Drive Growth.
Percentile Group
All Producers
Million $Producer
Executive Producer
Senior Producer
New Producer
80% to 100% 175,223$ 251,720$ 233,121$ 122,570$ 179,560$ 60% to 80% 95,491$ 167,669$ 131,472$ 74,153$ 80,626$ 40% to 60% 67,450$ 111,717$ 88,908$ 49,389$ 55,534$ 20% to 40% 47,100$ 95,621$ 55,281$ 36,022$ 36,017$ 0% to 20% 28,763$ 58,156$ 37,873$ 21,453$ 16,452$
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2012 Marsh, Berry & Company, Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Company, Inc.
Setting and Enforcing Minimum Expectations Raising the Bar
$53,750
$64,667
$83,750
$-
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
Ave TASC High Grow th
Minimum New Business Requirement
43.4% 48.2% 61.6%
* %’s represent the percent of senior, executive and million $ producers who achieved the minimum new business requirement
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2012 Marsh, Berry & Company, Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Company, Inc.
Focus and Clarity: Establish Your Minimum Account Threshold at Minimum
of 70% of Average Account Size (non-house)
Average Target Account Ratio(Minimum Acct Threshold / Average Acct Size -Non House)
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0%
Target Account Ratio
New
Bus
$ a
s a
% o
f PY
CF
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2012 Marsh, Berry & Company, Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Company, Inc.
Averag e B ook of B us ines s R elative to # of Ac c ounts and Ac c ount S ize
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
$10,000
$11,000
$12,000
$13,000
$14,000
$15,000
$16,000
$17,000
$18,000
$250,000 $350,000 $450,000 $550,000 $650,000 $750,000 $850,000 $950,000 $1,050,000 $1,150,000
Average Book of Business
Ave
rage
Acc
ount
Siz
e
61
65
64
66
66
70
75
82
89
99
108
114
130
153
159
256
Average # of A
ccountsGrowing Your Book
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2012 Marsh, Berry & Company, Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Company, Inc.
Producer Tools and Resources
45.5% 46.3%
36.2%
87.5%
67.0%60.4%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
Differentiation Platform Pipeline Management System Sophisticated Service Staff
% o
f Age
ncie
s Pr
ovid
ing
Average High Grow th
Arm Producers to do Battle
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2012 Marsh, Berry & Company, Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Company, Inc.
II. Differentiation
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2012 Marsh, Berry & Company, Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Company, Inc.
Battle for Market Share The focus on the PL and small CL customer
99.8% of Companies
65.3% of Employees
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Source: www.census.gov
2012 Marsh, Berry & Company, Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Company, Inc.
4 Steps to Differentiate Yourself From The Incumbent
1. Know what makes you different.
2. Know how to articulate it.
3. You must be able to show it.
4. Ask others to share it.
*Email for Electronic Copy
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2012 Marsh, Berry & Company, Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Company, Inc.
Differentiation Retention of Top 20% Accounts
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2012 Marsh, Berry & Company, Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Company, Inc.
III. Proactive Sales
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2012 Marsh, Berry & Company, Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Company, Inc.
Producer Accountability The Carrot: Excess Compensation Potential
Current Split 20% 30% 40%
New Business Percentage 40% 45% 50% 55%
Renewal Percentage 25% 25% 25% 25%
Exceed Target By:
NB Target: 20.0% PY Book
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2012 Marsh, Berry & Company, Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Company, Inc.
Producer Accountability The Stick: Negative Consequence Enforcement
Current Split Yr 1 Yr 2 Yr 3
New Business Percentage 40% 40% 40% 0%
Following Year Renewal Percentage 25% 20% 15% 10%
Miss Minimum
Minimum Target: 15.0% PY Book
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2012 Marsh, Berry & Company, Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Company, Inc.
Producer ACTion Planning Model
Joe Sales (Producer)
Producer Planning Model Section I: New Business Production Goal
•Establish Individual New Business Production Goals •Compare Goals vs. Industry Averages •Ensure Individual Goals support Corporate Growth goals
Section II: Book of Business Analysis •Dissect the Current Producer Book of Business •Understand Average Account Sizes •Assess Opportunity to Trade Down Accounts to Create Capacity
Section III: Activity Worksheet •Establish Targeted Account Size for Prospecting Efforts •Transfer New Business Goals into Activity Goals
Section IV: Producer ACTion Plan •Create a plan and follow-through •Consistently measure and track results
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2012 Marsh, Berry & Company, Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Company, Inc.
“That Which Gets Measured and Rewarded Gets Accomplished”
Performance Posting: New Business Interval Wall Chart
Averag e B ook of B us ines s R elative to # of Ac c ounts and Ac c ount S ize
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
$10,000
$11,000
$12,000
$13,000
$14,000
$15,000
$16,000
$17,000
$18,000
$250,000 $350,000 $450,000 $550,000 $650,000 $750,000 $850,000 $950,000 $1,050,000 $1,150,000
Average Book of Business
Ave
rage
Acc
ount
Siz
e
61
65
64
66
66
70
75
82
89
99
108
114
130
153
159
256
Average # of A
ccounts
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2012 Marsh, Berry & Company, Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Company, Inc.
Defining The Intervals Performance Posting: New Business Interval Wall Chart (continued)
P adraig Harrington $4,640 $84,000 $6,000 14
F red C ouples $4,163 $84,000 $6,000 14
B en C urtis $11,800 $125,000 $11,800 11
P hil Mickelson $25,102 $175,000 $25,000 7
C harles B arkley New $60,000 $5,000 12
2010 F O C US
P roduc er2010 New
B us ines s G oalTarg et Averag e
Ac c ount S ize
# of Targ et Ac c ounts Needed
to Write G oalY TD C ommis s ions
C los edC urrent Averag e
Ac c ount S izeY TD # of Targ et
Ac c ounts C los ed
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2012 Marsh, Berry & Company, Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Company, Inc.
BONUS OR “CARROT” TERRITORY
“That Which Gets Measured and Rewarded Gets Accomplished” Performance Posting: Cross-Selling Wall Chart
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2012 Marsh, Berry & Company, Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Company, Inc.
IV. Producer Investment
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2012 Marsh, Berry & Company, Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Company, Inc.
Average Weighted Book of Business
Weighted Book of Business - Average
2.7%
12.4%
33.0%37.9%
14.0%
0.0%5.0%
10.0%15.0%20.0%25.0%30.0%35.0%40.0%
21-30 31-40 41-50 51-60 60+
Age
% o
f Tot
al
Com
mis
sion
s/Fe
es
Weighted Book of Business - High Growth
3.9%
26.4%31.2% 29.6%
8.8%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
21-30 31-40 41-50 51-60 60+
Age
% o
f Tot
al
Com
mis
sion
s/Fe
es
Comm./Fees Controlled by Producers Over 50 years = 51.9% vs. 38.4%
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2012 Marsh, Berry & Company, Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Company, Inc.
Average Weighted New Business
Weighted New Business - Average
6.4%
13.5%
32.9%38.4%
8.9%
0.0%5.0%
10.0%15.0%20.0%25.0%30.0%35.0%40.0%45.0%
21-30 31-40 41-50 51-60 60+
Age
% o
f Tot
al N
ew B
usin
ess
Com
m/F
ees
Weighted New Business - High Growth
10.4%
30.4%26.8% 27.9%
4.6%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
21-30 31-40 41-50 51-60 60+
Age
% o
f Tot
al N
ew B
usin
ess
Com
m/F
ees
New Business Generated By Producers Over 50 years = 47.3% vs. 32.5%
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2012 Marsh, Berry & Company, Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Company, Inc.
An Effective Compensation Model Compensation model that offers upside to top candidates while protecting downside for your firm
a. Three year base salary as follows: b. Commission From First Dollar paid to producer c. Base Validated by new business appointments d. Examples at $60k Base i. Beginning in month 3, the base pay of $5,000 per month must be earned or
base drops for the following month ii. Assume we want $60k in production for $60k base iii. Further assume $5,000 gross commission per account iv. 12 accounts needed to earn base - 12 accounts x $5,000 Base = $60k v. Using a 50% closing ratio, we now need 24 deals in the pipeline for year one vi. If we use the mentor model, then we need to double the 24 to 48 since business will be
co-produced vii. In this example we need approximately four first time new business appointments per
month viii. In Month 3, if a new producer only obtained 3 new business appointments, then Month 4
compensation would be $3,750, not $5,000
Year Base1 $60,0002 $40,0003 $20,000
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30 Spring 2011 BANK/TASC Summit 2012 Marsh, Berry & Company, Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Company, Inc.
THANK YOU!
Josh Morgan Consultant
[email protected] 440.392.6579
Jared Roy Consultant
[email protected] 440.392.6560
FOR MORE INFORMATION: www.PeerNetworks.MarshBerry.com
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Total Agency Sales Culture (TASC)