Professional Development

YOUR BEST OPPORTUNITY

Become an indispensable contributor to your clients’ success

By Elisabeth Boone, CPCU

“He’s in ‘the sales game.’”

That term is often used to describe someone who sells for a living, whether it’s used cars, aluminum siding, or insurance.

If indeed selling is a game, says Wayne Allen, it’s important to know what game you’re in. Allen, who identifies himself as a “recovering lawyer,” is chief executive officer of Insurance Thought Leadership (ITL), whose ITL Advisory unit provides innovative strategy, process, and leadership coaching to insurance organizations and executives. At the Sitkins Group’s ProFit producer networking event earlier in the year, Allen made a presentation titled “How to Exploit the Best Opportunity of Your Career.” We share highlights of his presentation with commentary from an interview with him.

“The growth of insurtech and risktech is the best opportunity you will ever see to serve your clients, grow your business, and make more money.”
—Wayne Allen
Chief Executive Officer
Insurance Thought Leadership

To lead off, he posed a question to attendees: “What game are you playing?” He made a distinction between finite games like football and tennis and infinite games like business and personal relationships. When asked if he thought that most independent agency and brokerage principals understand the distinction, he said “no” but added that, like other business owners, they are juggling myriad responsibilities. “They have to make payroll, they have to make rent, they have to pay the bills, which means they have to make sales. Most producers have been trained to think of selling insurance as transactional and therefore see themselves as playing a finite game.”

What’s needed, Allen says, is a mind shift so that producers can embrace the more abstract concept of infinity when it comes to building and maintaining client relationships. “Finite games can be won and lost,” he says. “Infinite games cannot be won or lost; they are simply played until someone quits. If you think your competition is another agent, you’re playing the wrong game. Your competition is yourself; it’s how you live your life and how you serve the people around you, whether it’s your family, your friends, your employees, your clients, or the people in your community.”

Allen believes it’s critical to understand just how fragile those relationships are and how carefully they must be nurtured and tended. “Your purpose on this planet is not to sell one more insurance policy. Your purpose is to influence people in a positive way, whether your connection is business or personal.”

As noted above, infinite games have no winners (or losers) in the conventional sense. Still, it’s natural for salespeople in any field to think and talk about winning. Asking “What does winning look like?,” Allen substitutes the word “success” and quotes the late great UCLA basketball coach John Wooden:

“Success is peace of mind, which is a direct result of self-satisfaction in knowing you did your best to become the best you are capable of becoming.”

Advantage and awareness

The phrase “competitive advantage” is familiar to everyone who sells something—but what does it actually mean?

Allen identified six factors that go into creating a competitive advantage:

1. Price (cost)
2. Product quality/selection
3. Branding
4. Distribution
5. Customer service
6. Speed

Agents who compete on price through operational efficiency, Allen explained, earn lower commissions and are simply selling insurance as a commodity. Agents who differentiate themselves by offering a unique or high-quality product or service command a higher premium and make a higher profit. Another form of competitive advantage, he said, accrues to organizations whose leadership understands, focuses on, and serves a specific or small niche market better than anyone else, using value as differentiation. In this situation clients are willing to pay more.

To gain a competitive advantage, it would be great to know what your competitors are thinking and planning. Allen explained that this can be accomplished by using Porter’s Four Corners model, a predictive tool developed by theoretician Michael Porter that helps leaders ascertain a competitor’s likely course of action.

Porter identified four factors to be considered in this analysis:

1. Drivers—What motivates your competitor?
2. Assumptions—What do they believe about themselves?
3. Strategy—How do they compete in the market? How do they establish relationships and create value?
4. Capability—How do they act? Do they have the will or capital to compete? How do they panic (jump into a price war or denounce the competition)?

“The greatest opportunity lies not in focusing on your competitor but in being aware of all the forces that affect your clients’ risk profile and helping them manage both their internal and external risks in a way that truly drives greater enterprise value to your clients,” Allen asserts. “Deliver the best advice to your client—not just better advice than your competitors.”

The concept of competitive awareness may be unfamiliar to many agents and brokers, but Allen believes it is critical to establishing and maintaining solid relationships with clients. “Applying this concept will advance your role as an indispensable contributor to your clients’ success,” he says.

“Webster defines being aware as having or showing realization, perception, or knowledge,” Allen told attendees. “But the question is: How?” He offered a four-step process for developing competitive awareness:

1. Learn—Consume as much content as you can from the best sources.
2. Be genuinely curious—Ask the best questions of everyone.
3. Listen intently—Make sure you fully understand.
4. Assess—How does or could this learning affect me or my business?

Risktech and insurtech

By now insurtech is a familiar concept among agents and brokers, although its acceptance was preceded by apprehension on the part of those who saw direct writers embracing disruptive technologies and using them to offer personal lines coverages at lower premiums.

Perhaps less familiar is the term “risktech,” although it is rapidly gaining currency in the insurance industry.

“Risktech embodies all of the technologies that would change the risk profile of an individual or a business,” says Allen. “It changes the nature of risk itself. In contrast, insurtech changes the nature of the insurance supply chain. Autonomous vehicles, telematics, robotics, and genotechnology are all examples of risktech.”

For anyone who doubts the power and reach of risktech, Allen offers these statistics compiled by Insurance Thought Leadership: Thus far in 2019, $43.8 billion has been invested in 7,800 insurtech startups, whereas $248.3 billion has been invested in 31,200 risktech startups. That said, he points out that growth in insurtech is also producing tech applications that affect risk management.

“It’s a jungle out there,” Allen remarked. “So what are we up against? It’s a question of trust. The common perception of insurance and the people who sell it is that they are old, inefficient, untrustworthy and provide bad service.

“How do we change that perception?” Allen continued. “The growth of insurtech and risktech is the best opportunity you will ever see to serve your clients, grow your business, and make more money. Your understanding of those advances, technological or otherwise, is exactly the kind of competitive awareness that will allow you to deliver irreplaceable value to your clients.”

Imagine, measure, succeed

How often do we act before thinking through a situation? Sometimes quick action is required, but in most cases we benefit when we take the time to consider possible courses of action.

Earlier, Allen talked about the need for leaders to adopt a mind shift. “Success is in the mind shift,” he declared during his presentation. “Ask ‘What if?’ and ‘Why not?’ … imagine before you act. Believe before you see.” He showed an image of a staircase on which was written: “You don’t have to see the whole staircase … just take the first step.”

In his Rough Notes column “Winning Strategies,” Roger Sitkins likes to refer to his strategies and metrics by their acronyms. One of his favorites is KPI, which stands for Key Performance Indicators. Allen offered an acronym of his own: OKR, or Objective and Key Results. “Measure what matters,” he told attendees. “What gets measured gets done.

“So,” Allen asked, “what’s the formula for success: Agency management systems? A CRM system? Agent ‘content tools’? You’ve been doing that, right? There’s way more to it!”

His formula for success:

“First, make a commitment to organic growth. Adopt a mind shift to competitive awareness thinking. Empathize with clients to elicit their needs and wants. Understand and embrace the changing nature of risk to imagine what’s possible.

“Second, make a commitment to operating efficiency. Increase your visibility. Invest in technology to improve operational efficiency. Focus on your client’s total cost of risk. Get paid for creating value; avoid ‘commission compression.’”

Every opportunity presents challenges, Allen said, and every challenge is an opportunity.

“Expand your role and deepen your relationships,” he advised. “Change your approach. Technological advances create opportunities to think differently about your clients’ risk profile and how to reduce their cost of risk. Challenge your clients to think differently. Risk has always been placed in the bottom half of the financial statement. Introduce your clients to the idea that risk is migrating into the top half. Evangelize risk; encourage your clients to think of risk as an emerging asset class rather than an expense.”

Finally, Allen encouraged attendees to “Embrace opportunity. Become an indispensable contributor to your clients’ success and make more money.”