Growing the Small Commercial Segment

Growing the Small Commercial Segment Presented by Sharon Cunningham Business Management Group

Established in 1983. Dedicated to the insurance industry. Goal is to enhance the growth and profitability of our clients. Partner for the long term. BMG History

BMG Services • Business Plans • Operational Reviews • Small Accounts Set-up • Department Reviews • Compensation Plans • Marketing Plans

Why Small AccountsAre Unprofitable • Compensation • The Way the Jobs are Designed • Duplication of Effort • Too Many Companies • Too Many People

Small Accounts Today • Has Become a Step Child • Considered an Undesirable Necessity • Repository of Problem Accounts • Weaker Staff Struggle with Workloads • No Producer Involvement

Small Accounts Potential • Fastest Growing Segment • New Industries are Germinating Small Businesses • You Can Sell them Anywhere • A Small Account Can Become a Large Account • Who Else Has the Expertise?

Small Accounts Departments Less than $1,250,000 14.0% $1,250,000 to $2,500,000 54.0% $2,500,000 to $5,000,000 73.5% Over $5,000,000 81.8%

Keys to Successful Small Accounts Management • Picking the Right Accounts • Picking the Right People • Complete Automation • Streamlined Procedures • Aggressive Lead Generation

Productivity Ratios Revenue per CSR Average $100,000 to 150,000 Best $200,000 to 250,000 Producer New Business Average $30,000 Best $60,000 to 100,000

Characteristics of the New CSR • Willing to sell, ask for referrals • Enjoys using automated system • Motivated by bonus compensation • Open to change

Small Accounts and Automation • Imaging, full use of system • Headsets, rotate calls • Automated procedures • Non-standard forms in computer • Transactions handled first call • Management reports

New Business Endorsements Claims Follow-ups Renewals Documentation Billing Web Sites Common Procedure Problems

Using a Customer Center • Productivity Improvements • Profitability Improvements, Expense Reduction • Frees up Resources for Sales • Cross-selling, Lead Generation

Financial Implications

Steps to Facilitate the Transition • Indicate service center business on screens • Route the calls directly to the service center • Via download, maintain policy detail • Discontinue all transactions for service center business

After the Transaction to the Customer Center • Changes in Job Descriptions for CSRs • Changes in Procedures • Customer Management

Where Do You Find Producers? • Agency staff and their families • Sales people from other industries • Recent college graduates • People in retail, telephone sales • Professional and civic networks

Small Accounts Sales Management • Sales Plan is Activity Plan • Follow-up is Frequent • CSRs are Lead Generators, Cross-sellers

Sample Producer Sales Plan January 2003 - December 2003 2002 Small Accounts Commissions $500,000 Probable Attrition Rate - 10% $ 50,000 Probable Commission Income $450,000 Commissions Needed to Replace Lost Business $ 50,000 New Commissions Needed for 2003 - 10% Growth $ 50,000 Total New Commissions Needed for 2003 $100,000 Total Commissions Needed for 2003 $550,000

Small Accounts Sales Plan Small Accounts Producer $50,000 Referrals from Producers $25,000 Call-ins $ 5,000 CSR Referrals $10,000 Other Departments $10,000 CSRs - 4 $50,000 Cross-selling $12,500

Lead Generation • The Referral Method • The Target Marketing Method • The Program Method

Marketing Ideas • Cross-selling • Networking with producers • Creative mailings • Centers of influence • Other lines

Customer Contact • The Rule of Four • The Annual Review • Other Contact Points

Business Management Group 1-800-772-0208 860-547-3541 www.bmgconsulting.com

Growing the Small Commercial Segment