We have a lot in common with most insurance agencies. Besides the fact that we spend most of our day talking to insurance people, we also operate our business in a similar manner to the way agents operate. We build client relationships that require little or no fee and earn our fee based on a commission (In our case we call it a Success Fee). It’s not an exact match, but it’s close. It certainly gives us plenty of perspective on how an agency operates and the importance of value-added services.
It also means we’re perfectly placed to ask a question that many insurance agencies should consider asking. At what point does the service side of your business lose priority to the revenue-generation end? In other words, at what point is it ok for an agent to start putting his or her own business ahead of their clients?
As an insurance agency owner, you’ll be very familiar with investing huge amounts of time and money in training, advice and risk management procedures for your clients, often with no direct revenue for your business. You do this because it helps your clients, builds your relationship with them and allows you to earn revenue by selling them some insurance.
We broadly follow the same process. We invest time and energy into helping our clients add value to their business. We discuss perpetuation planning and help them to define their goals. While all of this helps us to achieve our commission, it’s our choice to invest in that. If we wanted, we could just connect buyer and seller, without investing ourselves in making sure our client gets the deal they want.
We both make the same choice. We choose to invest in our clients first and foremost. That strategy can backfire. You can find yourself in a position where your client decides to go with another provider or just change their mind on your service altogether, leaving you with a huge investment and no payout.
This is why it is important to ask, ‘at what point do we stop putting clients first?’ However, just because you ask the question, doesn’t mean the answer isn’t ‘never’.
You’ve worked hard throughout your life to build your agency into something you are proud of, and now you feel it’s time to sell. We have a whitepaper that can help you find The Value of Your Agency.
The important factor here isn’t the fact that all this investment could be for nothing. The important factor is that we choose to do it. We choose to provide ongoing services, because we understand that success is as much about how you do business as it is about the revenue. We also understand that by helping our clients succeed we will ultimately succeed too.
That choice is what built our business, and probably yours too.
