We all know how important organic growth is to the success of an independent agency. But is growth simply for the sake of growth enough? Is there such a thing as too much growth or is it possible to grow and still not achieve the agency’s financial goals?
When an agency’s sales pipeline stalls out, there is often pressure to create at least the aura that things are still moving forward. Thus, management sends the message down the line that “we need to increase our activity level”. This is usually followed by a short period of frenetic sales activity where simply having something in the pipeline is considered success. Producers break out the yellow pages and start entering “prospects” in their database, when in fact these names are really just suspects rather than bona fide prospects. Most agencies know that some activities are more fruitful than others. Chasing after an account that isn’t a good fit for the agency’s culture could mean sacrificing a better opportunity. You’ll look busy and you might feel like you’re accomplishing something, when in reality a more concerted effort to write the right account could be better for all concerned.
If growth is simply defined as taking more applications and writing more policies, without a great deal of regard to the quality of the account, then it’s possible to achieve the short-term objective of creating activity while the agency takes a step backward in terms of profitability. In addition, writing new business requires a substantial amount of internal resources and may put pressure on the support staff to choose between serving an existing customer and helping a producer and the agency to grow the book of business. Too much growth without a corresponding addition to staff can spell disaster.
The agency’s comprehensive marketing strategy, when properly and thoughtfully created, will address both quantity and quality. Sales and growth goals will always be balanced with profitability targets and integrated with internal operational needs. Any proposed “quick fix” solution that simply generates leads without matching the lead to the agency’s desired customer profile will accomplish results in the short-run often at the expense of the long term health of the agency.
As is true in most aspects of life, a sold plan with specific goals, timelines, tasks and rewards is critical. But even the best plans will fail unless there is the proper leadership, talent and resources in place to execute the plan. If you have the discipline to plan your work and work your plan, you won’t need a canned approach that creates a lot of activity but doesn’t necessarily further the agency’s financial goals.