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Trokey’s Take: Budgeting is not the same thing as planning

Thursday, October 21, 2010
Written By
Kevin Trokey

We’ve just entered the fourth quarter. For benefits agencies, that means you’re busy with renewals, employee meetings, open enrollment and hopefully planning for a successful 2011.

When I talk to prospective new member agencies, I always ask about how they approach planning. It is the rare agency that plans effectively with its producers. Not only does the vast majority not plan effectively, many don’t plan at all.

Perhaps the most dangerous of all are those agencies/producers who think they are planning, but really aren’t. Sometimes I’m told, “Oh sure, we do producer planning every year. We expect our producers to grow by $X or X% this year.” That isn’t planning, that’s budgeting. In fact, that isn’t even budgeting, it’s guessing.

Let’s use a little deductive reasoning here:

  • Agencies are sales organizations (at least the good ones are) and, by definition, writing new business is their lifeblood.
  • The people responsible for new sales are producers.
  • The primary responsibility for any position should be the goal/objective for which they are held most accountable.
  • To be held accountable for a goal/objective, it needs to be defined.
  • To effectively manage (and hold accountable) any employee, you have to be able to monitor the behaviors that result in success for that position.
  • To define the behaviors that will result in success, you have to know which ones are necessary to achieve the desired outcome.
  • The act of determining which ones are necessary is the actual planning process.

So, if we can agree that planning is not only helpful, but also necessary, let’s talk about the required elements of an effective producer plan. (Note: This intended to be the minimum amount of planning; you may certainly choose to plan in other areas and to get much more detailed.)

1. Personal ODDS Analysis

For the individual producer, analyze the following: a. Opportunities – What are those situations for which you have to make sure you are in position? (Example: Your unique offering/value-proposition or a particularly influential center of influence.) b. Dangers – What are those external forces that could threaten the producer’s success? (Example: Health care reform, a new competitor, etc.) c. Distractions – What are those bad habits the producer has that need to be avoided? (Example: Inconsistent prospecting, getting involved in service issues, etc.) d. Strengths – What is it the producer does better than most anyone else? (Example: Developing strong client relationships, closing deals, etc.)

2. Critical Indicator Plan

Document what your current numbers are in the following area as well as where you would like them to be at the end of the coming year: a. Closing ratio b. Revenue per account c. New business written d. Retention rate e. Total revenue f. Number of referrals received g. (Other critical indicators important to you)

3. Personal Marketing Plan

Identify a handful of ways to create opportunities in each of the following areas: a. Cold calling b. Centers of influence c. Networking opportunities d. Current clients e. (Other ways you see to create opportunities)

4. Personal Development

Identify a handful of ways to improve in each of the following areas: a. Sales skills – Example: Commit to regular role-playing with a team member. b. Technical skills – Example: Learn more about self-insured risks. c. Business acumen – Example: Learn to read financial statements. d. (Other areas you need to develop)

If you will just take some time over the next month or two to work your way through these lists with each producer, spend some time thinking about what belongs in each area and use that to plan out your 2011, I promise it will be more successful. We all tend to get off track from time to time, but it becomes impossible to get back on track if you never took the time to lay the track in the first place.

Of course, you can always guess at a number for each producer, add up the individual numbers, build an entire budget around that total and run your agency for the next year on the hopes that it may happen.

You always have choices. Choosing to plan for your success takes a little more time up front, but I promise the results are more than worth the effort. You just have to ask yourself, “How badly do I really want it?”

About the Author

Kevin Trokey is President of Benefits Growth Network, a firm specializing in growth strategies for Employee Benefit agencies, departments and producers. He can be reached at Kevin@benefitsgrowthnetwork.com

© 2010 Zywave, Inc. All rights reserved.

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