Agent to Agent: Book Optimization—the Million-Dollar Producer Process

David Connolly Photo - 200x250px.jpgBy David Connolly
Founder, iQ Consulting

Pareto was right. If you apply the 80/20 rule to your book you’ll probably discover that the top 20% of your clients generate 80% of your revenue. Now what do we do with this information? When you reach the point where growth is challenging because of service constraints, it’s time to shed smaller accounts to allow continued growth and profitability.

Total up the revenue generated by the smallest 20% of clients in your book and remove them. That’s right. Take them out of your book. Give them up. Move them into a select accounts department, gift them to a young producer, sell them to a competitor or move them to a carrier service pool.

Now look at the top 20% in your book. I’ll wager that the revenue generated by any single one of your best clients equals the revenue generated by all of your bottom 20% combined. In my book, I was so thrilled to discover this, that I traded down my bottom 33% (with some exceptions) and replaced the lost revenue in less than one year with 1 larger account. My book now generated more revenue with 53 fewer accounts. More importantly, I had much more time to over service my best accounts, who responded by giving me introductions into similar accounts and I doubled my book in less than 3 years.

Take a close look at your book of business and trade down the bottom 20-33% every year. You'll double your income every 3 years with many fewer clients. And if you get squeamish about trading down and losing income, I've taken the liberty of listing all of the excuses thought of by the many thousands who have come before you.

There are many reasons why producers won’t trade down smaller accounts. I call it mind trash. Here are my top 10 favorites.

Reason 1. “I can't afford to lose the income.”

Truth is, it takes less than one of your top 20% to replace it all, and your clients will help you if you share your business plan with them. Also, most agencies will give you six months to one year of commission on traded down accounts.

Reason 2. “Those little clients require no service."

The truth is, smaller clients have less resources and use more of yours. The larger accounts have middle management and typically require less service. We all know about high maintenance small accounts that won’t go away.

Reason 3.“I worked hard for those clients, that $$ is mine--I earned it etc."

Truth is, none of those smaller clients required hard work to write, and they are holding you back from focusing on larger accounts.

Reason 4. “Those clients will be mad or insulted.”

Truth is, most could care less who services them as long as they get serviced and their rates don’t go up. Also, they get better service from a small accounts department.

Reason 5.“We'll lose a bunch of clients.”

Truth is, if you communicate effectively and sell the advantages of the select accounts department or the trade down, few will leave, and those that do were unhappy already. Which would hurt more, losing some small clients or one of your largest clients because of neglect?

Reason 6.“They will tell all of their friends!”

Truth is, they won’t, but if they do, it’s only because you didn’t communicate the change effectively. Always let them know they can call you, always let them know that they will get better, faster, more responsive service.

Reason 7.“We don’t have a select accounts department.”

Start one. It’s one of the most profitable changes an agency can make. The agency doesn’t pay commission on traded down accounts after the first year, so profit margins increase by the amount of commission saved. Also, small business departments are incubators for new service and production talent.

Reason 8.“These small accounts could be huge some day.”

Truth is, if they have been in business for over 5-7 years and they are not large yet, they most likely won’t be. If they grow, you can take them back.

That’s all I can think of right now. I guess my top 10 is my easy 8. I know there are a few other silly reasons, but they didn’t warrant the grey matter required for memory so I guess I’ve forgotten them. The point is, there are no valid reasons against trading down and many reasons that support it.

David Connolly is the founder of iQ Consulting. They work with the top 100 agencies and brokers in the US and Canada and have trained thousands of insurance professionals.

Want to learn more about optimizing your book? Join PIA and iQ Consulting for our November 18th webinar, Book Optimization, or purchase the archived recording if the webinar has already taken place. This webinar is presented as part of the PIA Agent Success Acceleration Program. PIA and iQ Consulting have created this sales-focused, e-learning program for insurance professionals in CO, DE, IL, LA, MA, ME, PA, RI, SD, WV, WY and a growing number of states.

For more sales techniques that will help you rise to the top, visit the PIA ASAP webinar archives at

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