Why Sales Leaders Fail to Increase Sales (and 7 Things to Do About It)
A few days ago, I had lunch with a young man who told me that when he was hired as a producer, his sales leader (CEO) said, “If you come work here, we’ll leave you alone.” Look, I understand this new generation of the workforce operates a lot different than before, but there’s a massive problem with this type of leadership style.
Sales leaders have a responsibility to their salespeople, not to leave them alone, but to help them gain clarity on their goals, long-term and short-term. Then help them come up with a legitimate plan to achieve those goals. And lastly, train and develop the skills and habits to make these intentions a reality.
Nick Saban said it best, “Young people have the illusion of choices. But if you want to be good, you have no choices.” Most people won’t figure it out or do it on their own, which means it’s on us as leaders to inspire and put a system in place to make our people want to be successful.
And truthfully, it’s a big win-win for both of you. Because when you help a producer develop the capability to achieve their goals and boost their confidence, they’ll grow fast and make great money. As a result, your firm becomes one of the best places to work. But not only that, your agency grows fast, which drives wealth for you and the other stakeholders (and that too is a worthwhile goal.) Recruiting new and mature producers to your shop becomes easier because it’s an upward power cascade of growth.
To motivate your producers, you want to start big, then get small with their goals. There are a million different philosophies on goal setting. But unfortunately, not a lot tell you how to help your producers understand it as an agency sales leader. So to help you, here’s a quick goal setting process to help your producers grow their books.
7-Step Goal-Setting Process
1. Act like you’re a financial planner and get all the big stuff on the table. For me, it was cars, universities, weddings, and retirement. Calculate how much you need to save annually to fund these necessary expenses. Warning: Be prepared because it will probably make you want to vomit as I did after learning I had to save $65,000 a year. But when you get over “the brutal truth” of how much it will cost, you can go to the next step.
2. Calculate “how much” you need to grow your book of business to throw off that much extra money. Here’s a quick example: If I need an additional $50,000 after-tax to invest, I have to make that much plus the tax. If your tax rate is 30%, then invert that and divide the $50,000 by 0.7, and you’ll get how much money you need to make. In this example, it would be $71,000. So to make $71,000, how much do you have to grow your book? If you make a 30% commission on your book, divide that $71,000 by 0.3, and you’ll come up with about $233,000 of agency commission.
3. Create a four-year growth plan. Now that you know that growing your book of business by $233,000 will throw off $70,000 pre-tax and $50,000 after-tax, you can create a four-year growth plan. Divide the $233,000 by four years, and you’ll get $58,000 per year. And voila, exactly $58,000 net growth every year puts you in control of your situation.
4. Now for the annual plan. How do you get $58,000 net growth? It’ll depend on your target account size, but just four accounts at $15,000 revenue, and you’re practically there. This step is where most producers realize they can’t keep writing small accounts because no one has the time to write and maintain hundreds of $100 to $200 revenue accounts.
5. Break it down into actionable activities. For you to win four accounts at $15,000, how many do you need to submit, and how many new business appointments do you need? Figure out your current closing ratio, then move on to the next step.
6. Get your “right-fit” prospects into a database and start prospecting. Do you have enough opportunities to get you to $58,000 net growth every year? If so, schedule your prospecting efforts on your calendar and start setting those appointments. If you don’t have a database, I highly recommend finding one that will help you stay organized to win more deals.
7. Tell your boss (both at home and work.) Show them what you have planned and get them on your team to support you. You’ll need these people in your corner encouraging you throughout this mission, especially when things get tough. If you don’t communicate your plans, it’ll be more challenging for these people to understand why you’re doing this and where you’re going with the process.
I hope this framework helps break down goal setting for you and your producers a lot easier. After starting this process over 20 years ago, it changed my focus, how I managed my days and how much money I made and saved. My mission is to help every insurance producer who wants to help themselves and gain clarity in their financial freedom.
And look, money is not the secret to happiness. But almost everything you want for yourself and your family costs money. And a lot of you producers and sales leaders are in your prime time. Meaning, you’ve got the skills, ability, the marketplace, and resources to turn it on and provide this for yourself and your family. So if you’re going to make money, let it be on purpose.