Developing a Sales & Marketing Plan

The first part of this two part series described the self-analysis of the agency’s book that must precede the development of an effective sales and marketing plan. This is accomplished by reviewing each producer’s book for the type and size of accounts and analyzing what industries or other niches exist.

Producers also needs to evaluate their primary areas of expertise. What have they successfully written before and what centers of influence do they have? They also need to determine if their past experience and success will still be valid in 2009. The first part allows the sales force to understand the current composition of their clients, take a look at their products skills, and identify areas to exploit. The next step is for key sales players in the agency to brainstorm ideas of where they want to go now and how to get there.

Setting the Goals

Compiling the individual producer goals creates the sales and marketing plan parameters. Using the data already collected, each producer can then set goals based on his or her sales ability, resources, time and expertise. Producers need to set goals that can make them stretch. The goals should include how much new business will be written and what specific types of business will be approached. The plan needs to take personal goals into account, too.

Their plan should show the starting point and the finishing point of their goals. It is up to the producer and sales manager to define and revise the path that is followed. Adjustments might include ways for the producer to improve the hit ratio, targeting larger accounts and/or how to create a new program to exploit a producer’s talent. These steps or adjustments should be organized into action plans.

Action Plan Development

Action plans state the current issue, the future goal and then list a few key tasks or milestones along the way. The action plan needs to clearly define the person responsible for each step and the timeframe to complete the task. These action steps are the step-by-step directions for the sales and marketing plan. Keep in mind that the end result should be fixed. However, the path to reach that goal can be revised and altered along the way based on what seems to work best. The sales and marketing plan should be an ever-changing document.

Monitoring the Plan; Tracking Progress

The overall plan and action steps are only as good as their monitoring and management. Tracking progress and holding people accountable ensure reaching the end result. The focus needs to be on the goals set, while being flexible on the path followed. Therefore, performance is evaluated by an understanding that the path is not straight. There will be some setbacks and changes will need to be made along the way.

Monitoring needs to be done by the sales manager and this role is extremely important; more so today than before. Each producer needs to be prepared to describe his or her past results, project what is in the pipeline for the future and describe what has been working and what improvements are needed. The sales manager’s role is to work with the producer to make any adjustments necessary to keep going in the right direction. This would include joint calls and even helping producers take new approaches based on market woes, such as contractor producers moving to road construction versus home building.

Adjustments to the sales and marketing plan can include coaching, mentoring, outside training, telemarketing, advertising, promotion, development of new programs, products or services, or perhaps even new staff. An action plan should be created when these adjustments are necessary. That way the producer and the agency agree on the steps, responsibility, timeframe and expected results.

Know the Terrain

Just like a traveler on a trip, the agency’s sales and marketing plan must be aware of and respond to the terrain. Clients’ needs, insurance companies and the marketplace in general are all out of the control of the agency. The agency needs to understand what is happening and be pro-active, or at least respond quickly to these factors.

Market Analysis

Agents need to have a clear understanding of what carriers can do for them and how this fits into the overall agency plan. Insurance companies, it seems, will either be unmoving or totally change things, usually cycling through both approaches.

Run a list of all of the carriers with volumes, commission rates (or commissions), loss ratios and contingents received. Analyze how the agency’s book of business stacks up with the existing markets and their products. Compare all the carriers and their products against what the agency has with the top 10 industry groups the agency writes.

Some of the questions that should be asked include: Will volume commitments be met and how will this be done? Are there new markets the firm should seek out? Is the volume spread too thick or too thin? Is the agency maximizing profit sharing agreements?

List in the sales and marketing plan the five most important markets (not necessarily the largest) and the agency’s volume with them. Write realistic agency production goals next to those numbers. Next, list one or two markets that the agency does not have, but the agency could use. Write down the dates producers will approach them (create action plans by carrier). Finally, list two or three markets the agency has outgrown and should eliminate.

Target Clients

An agency can have the greatest products and sales force, but unless producers are targeting the clients, these assets are moot. Make sure the agency’s capabilities, strengths, products and centers of influence match up with the targeted clients. If a new group of clients is to be targeted, then create an action plan with the steps required, timeframe and who is responsible.

It’s a Sales Tool

The beautiful thing about a well-written sales and marketing plan is that it does not need to only be used internally. It can be shared with prospects, clients and insurance companies. Such a plan helps the firm look organized and efficient and makes the agency management and sales force feel directed and on task.

Take the sales and marketing plan directly to insurance company representatives. Set an annual meeting to discuss agency goals and future opportunities with the regional vice president or branch manager and the main underwriter assigned to the agency. Inform them about the current status of the agency and its future plans. Find out where the company stands now and its plans for the future. Discuss how the agency and the company can do more business together in the future.

Summary

Be proactive not reactive. Firms that incorporate an annual planning process are more efficient, more profitable and highly valued businesses. The choice is yours. Take the time to plan ahead and be successful or be at the mercy of the winds of change.