Ask any salesperson what they do not like about their job, the answer is the bad attitude of other people about sales.
In 2012, I got a contract to facilitate a strategy for an insurance sales agency unit. The objective was to help increase monthly production. Revenue in insurance-speak is called production. The agency had a sales production target of Ugx. 3bn per annum.
If you want to become a great consultant, first become a great listener, who asks great questions. In consulting, the starting point is to understand client needs. “How exactly will you measure work well done after the project?” I asked, and the chief executive officer (CEO) of the agency replied, “hit the set production targets.”
Next, I did a thorough study of the business and the agency unit to understand its current performance, successes, and failures and areas for improvement. As they say, ‘if you are given 10 hours to cut down a tree, take seven hours sharpening the ax, and 3 hours cutting.’ I focused on the current state assessment. The historical performance of the agency, top sales agents, top clients, retention rate, the marketing strategy, the sales conversion strategy, the pipeline strategy, and of course the top-selling products and how they sold.
The results were fascinating.
The agency recorded an over 55% churn rate over the previous three years based on the data. This means, out of every 10 customers, 5 did not renew their insurance policy with the agency. They left. The agency was, therefore, surviving on new business.
Such a model is cost-intensive and unsustainable as it requires aggressive marketing. It is no brainer that it is easier and cheaper to retain an existing client than acquire a new one!
In part 2, I explore what we did to transform the insurance agency.
Copyright Mustapha B Mugisa, 2020. All rights reserved.