It's Time to Prospect and Sell Your Ass Off
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It's Time to Prospect and Sell Your Ass Off

WARNING?- You're going to lose more business than usual in 2022.

If you read our blog regularly, you know how strongly we believe in prospecting consistently, the necessity of maintaining healthy pipelines, and following a sales process to capitalize on those opportunities.

This is what creates a foundation that drives organizational growth. We all know that healthy and profitable growth is a challenge, even in normal times.

My friends, these are NOT normal times.

In today's business environment, several rather unique circumstances (some industry-specific, others not) are converging at once. They are creating a perfect storm requiring insurance and benefits producers to put their prospecting and sales efforts into high gear.

Another one bites the dust

We are all very aware of the degree to which mergers & acquisition (M&A) activity has hit our industry.?But don't think for a moment that our industry is unique in this phenomenon.

The primary factors driving the activity are a seemingly insatiable appetite from private equity and concerns over changes to tax law. This results in many business owners, everywhere, deciding it's time to take some money off the table and get out.

An August 12, 2021?article in Reuters?referenced Refinitiv data, stating that the volume of completed and pending deals had already surpassed the full-year total for 2020. The article quoted a global vice-chair from Ernst & Young, saying the pace could continue for the next 18 to 24 months.

What does this have to do with prospecting and selling? In a word,?EVERYTHING.

Chances are high that you will lose clients due to M&A activity this coming year, no matter how well you serve them. If you focus on specific verticals, it could be like watching dominoes fall.

Even with normal attrition, a typical producer/agency may lose 7% of their book each year. Yeah, I know every agency claims to have 95% retention, but very few can quantify their claim. When you look at the actual retention numbers, they are almost always less.

But I digress.

What if M&A activity causes the typical attrition number to double? This isn’t a stretch at all. I've seen specific instances where it is already much higher. Even at a doubling of the attrition rate, you would need to write $140,000 of new business to get back to even on every $1,000,000 of revenue.

The storm builds

As of this posting, the effective date of the Consolidated Appropriations Act of 2021 and its compensation transparency requirement is a week away. While it doesn’t have to, and shouldn’t, many of you will feel compensation pressure with your clients like you never have before (we’ve written about this before).

However, the pressure you may feel from your clients should be the least of your concerns. Be prepared for desperate competitors (struggling with the same pressures as you but less equipped to deal with them) to show up in front of your clients armed with your compensation and commission numbers.

They are going to be working their way through your client list with an overly aggressive “I’ll do it for less” message. No, this tactic isn’t new, and it isn’t healthy, but it is about to be applied at a level the industry hasn’t seen before.

Feeling a sense of urgency?

I’m going to guess that your 2022 business plan and budget are built on your growing top and bottom-line revenue, not getting smaller. And they should. However, you need to factor in this perfect storm of factors attacking your existing book of business.

Let’s do the “math.”????

Normal attrition +

Clients lost to M&A +

Compensation pressure due to transparency +

Overly aggressive/desperate competitors +

Your plan/need to grow =

__________________________________________

A reality that you need to prospect and sell your ass off this coming year

?You can mitigate many of these factors. You can even turn some of them to your advantage. However, you cannot afford to fool yourself into thinking that you don’t need to prospect and sell with an intensity and determination many of you have never felt before.?

Just sayin'???♂?


Previously posted on Q4intel Insights

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