What the Future of Practice Management Looks Like for Producers

By | May 29, 2015

Whenever producers talk about the future of the insurance and financial planning industries, the conversation often involves market trends — what legislation is on the horizon and what shifts are expected in consumer needs and preferences.

Just as important, however, is exploring how the process of acquiring new clients will evolve. Adapting to industry shifts can be difficult at times, as we saw with Obamacare, but we have grown accustomed to coping with changes in regulations and policy, as challenging as they can be.

Rarer, perhaps, is a change that forces you to evaluate the way you run the backend of your business, the processes and practices that you use to service clients, to retain clients, and to manage the volume of administrative tasks that come with your day-to-day operations. We see this frequently, and many advisors have admitted that they felt as though they were never taught how to effectively initiate new relationships in the first place, so the challenge of adjusting the backend of their business turns out to be rooted in a very old problem.

Before we talk about the future, though, we should look to the past.

As many of you know, insurance sales began as a door-to-door business. A producer would claim a small swath of real-estate and engage prospects face-to-face. When he got a client, he would come back each week or month to collect the premium. At a certain point, a producer was so preoccupied with collections that he no longer had the time to seek out new clients.

Though this model made growth difficult for producers, it had a powerful benefit for clients: the quality of the relationships between producers and the people they served was highly developed. Face-to-face conversations were frequent, and trust was a major part of the value proposition. Producers knew that they would see clients again to collect, so there was built-in accountability. The promises made at the sale had better come through, otherwise a producer would have to endure an awkward conversation the next time he or she knocked on the door.

Eventually, the industry saw that an opportunity was being missed and separated producers from collecting premium payments and basic policy service to leverage what producers do best: engage and serve clients, which lead to more wallet-share. At about this time, the industry began exploring the potential of doing business by phone and in-office appointments.

Though this is now the norm, the transition came with growing pains. Some producers resisted, insisting that house-calls were the only way to close business. These producers fell behind the curve while those with more foresight capitalized on the untapped potential of telemarketing and bringing prospects and clients to them.

Inviting prospects to meet at an office was simply more efficient than driving from house to house. For producers, this meant serving more clients in less time within arms-reach of valuable resources, but even as the business evolved, a key element from the previous era persisted: the best producers were more transparent and more realistic with their clients. They focused on being trusted advisors and strived to maintain the same level of accountability that their door-to-door predecessors established.

Soon, nearly all producers adopted cold calling to expand their reach and hired staff so that they could still focus on building relationships in a more hectic business environment. This is key: despite managing larger client bases, the true value of producers’ skillsets remained their insights and their ability to develop relationships. Realizing this, they delegated administrative tasks to eliminate distractions.

Despite the success of telemarketing, a few producers saw the “Do Not Call List” looming on the horizon and began exploring more creative ways to connect with prospects — seminars, webinars, mailers, surveys, email campaigns — and that ushered in another new era.

That brings us to today. More and more producers are now outsourcing (not overseas, but within the U.S.) tasks so that they can better focus on serving clients and meeting with qualified prospects. These producers work with marketing consultants, search engine experts, and appointment setting firms to get in front of new prospects. They use freelancers and contractors to manage the day-to-day tasks that do not demand the availability of a fulltime employee, like scheduling follow-up calls and managing emails. These producers have seen past the sometimes-deserved negative reputation of outsourcing to find high-return opportunities that help them grow their businesses and better serve clients.

In a way, the work a producer has at the same time becomes more complex and more simplified. Producers, no longer constrained by physical proximity, can now serve more high-value clients, which means a greater variety in opportunities and challenges. They can find the clients that are the exact fit for them based on asset size, industry type, or even company structure. Utilizing a range of new business strategies and tactics may be more complicated than going door-to-door, but the shift toward outsourcing these tasks pares down a producer’s responsibility to a few essential tasks.

And this third-party approach is actually more productive. You might only need 15 hours of follow-up calling a month and 60 hours of marketing work. If you did that internally, you would struggle to find the right experts willing to work for those limited hours. But if you outsource it, you can get the expert to fill your exact need.

This approach eliminates the Swiss Army Knife secretary. You know the one. You hired him or her to manage your schedule and basic communication, but you end up delegating other tasks — like updating your social media or adding content to your blog — to your secretary just because that resource is there. In the end, your secretary ends up distracted by tasks that are outside of their core skillset, and the execution ends up being lackluster because the expertise behind it was poorly informed.

As an appointment-setting company, we decided that our best course of action was to start small. We started out by bringing in an outside agency to rebrand our company and collateral and to build and manage our website. We worked with this team remotely, meeting in-person on a few rare occasions. Once the website was finished, we began to experiment with outsourcing our social media marketing, our advertising, and even our IT management.

The net result: we benefited from the experience of specialists, sometimes only needing four or five hours of their time a week, and we were able to focus exclusively on the core of our business. This is easy to say in hindsight, but this growth required discomfort. At the time, we were uncertain at points and experienced a dose of anxiety as we learned to adapt to this new way of doing business.

Based on the long-term trends in the industry and the rapid adoption of new technology, the future of business development and management in our industry is an increased reliance on outsourcing. Producers will simplify their practices, reduce their staff, and hire out everything from out-bound communication to marketing to lead generation and appointment setting. With upward of 95 percent of your administrative tasks farmed-out, you as a producer (and your in-house staff) can focus exclusively on the core of your business.

After 60-some years and an unprecedented explosion of technological advancement, producers are still ultimately finding the best way to do what they have always done: forge meaningful, productive relationships with the people that need them most.

This process may be intimidating at first — it certainly was for us — so start small. Farm out one piece of your business at a time to make the transition manageable. For many producers, finding new business is a major drain on time that generates increasingly limited returns. If you outsource these tasks, the return for your business can be significant.

Once you are comfortable with outsourcing that piece of your business, you can move on to other aspects, like contracting someone to manage your social media or to manage your website. You don’t have to outsource everything, but if you can find ways to use more specialized talent on part-time tasks, you can accelerate your progress toward your goals.

For some producers, that future is already here. Are you ahead of the curve or are you still going door-to-door?

This piece originally appeared on LifeHealthPro. Read the original here.

Photo used under creative commons license, courtesy of the Seattle Municipal Archives.

About the Author/Host

John Pojeta

John Pojeta - Vice President of Business Development

John researches new types of business and manages and initiates strategic, corporate-level relationships to expand exposure for The PT Services Group. John came to The PT Services Group in 2011. Before that, he owned and operated an Ameriprise Financial Services franchise for 16 years.

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