Captive P&C Agents: Simple Question. What is Your Close Ratio?

[infoe]

Re: Captive P&C Agents: Simple Question. What is Your Close Ratio

i have 8 out of 10

As an IA now...what was it with farmers?



at ST8PHRM if a customer called in for a quote through a referral or a direct piece of mail it may be 1 in 7

internet lead 1 in 20

 

[vegasjones]

Re: Captive P&C Agents: Simple Question. What is Your Close Ratio

First things first in response to VolAgent.

My main reason for asking this question is to do exactly opposite of what you think I'm trying to do. I'm confident in our company's rates, in fact I was just selling for this company 3 months ago. Because I'm confident in our rates I was pretty certain that if I could get some honest, straightforward answers surrounding close ratio I could then use that information to motivate the agents with the idea that our rates really aren't that bad and that we have just as much of a chance to close a sale as those companies that our model is trying to compete with.

I'd like to make it clear that I do not have a home office/sales manager mentality. It's hard to get a point across through written words so I'm starting to think my post is mis-understood. Truth is, I'm not looking to point fingers in any way. I'm not sure if you read my entire post but if you had you'd see that I was an agent for 10 years, in fact I was an agent up until May. I just started in this position. I'm actually quite the opposite of what you describe. I have nothing but the agents best interest in mind as many of them are close personal friends. But at the end of the day, I do feel our rates are somewhat competitive and I'm only looking for information to get them to focused on something other than rate.

So with that said, as an agent I never used rate as a crutch if I was not producing. If my company was losing competitive edge, I found ways to farm more prospects, plain and simple. And a lot of the agents I'm working with are using rate as an excuse.

Maybe I'm ignorant in believing this, but for a captive company I see close ratio as a good indicator of how competitive your rates are. Yes, there are other factors involved but in general, with a captive company, quotes to closure ratio is a good indication of your competitive place in your market. And if our agents are confident that our company is competitive it's much easier to motivate to sell.

Ultimately all I'm trying to do is find ways to take agent focus off rates. I just felt that knowing the industry average close ratio and whether or not we are in line with that would be a helpful tool for me.

I didn't realize this would turn into such a drawn out thread.

Also, I appreciate the constructive feedback.
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You probably need to listen to the agents a bit better.
I know when I talk to someone that certain carriers aren't a good fit, don't even rate them there.

If your agents are not bothering to quote a lot of individuals, you don't have a 31% close ratio because of the pre-filtering that occurs.

Here's what you really need to look at.... are your agents/producers quoting at least 3 different risks a day? That's 3 different prospects.... If not, then the closing ratio is somewhat meaningless. For closing ratio to be valid, you have to have a certain level of quoting per producer/agent.

I close 75% of the bonds I quote. Unfortunately, I only quote 4 a year. I can't build a business plan around those numbers. If I quoted more, my closing ratio would go down, not up.

You have a preconception of what things should look like. Talk to your agents without trying to convince them of anything. Yes, P&C is extremely price sensitive nowadays, especially if you don't have name awareness behind you. Why would someone buy your product over a less expensive product or a better known product?

In my area, I tell carriers that if they are more expensive than State Farm (for preferred risks), they are toast. Why would anyone use something more expensive and less well known? Of course, it helps that State Farm has somewhat middle of the road rates in my area overall.

Dan

Thanks for this feedback as well. As a 100% captive company, our agents don't have an option to quote with different carries, just one, so little to no pre-filtering is done. If an agent is pre-filtering customers with our company it means they are walking customers without any sort of quote, and I'm 100% certain that does not happen. There are only a few instances that insureds are ineligible with us and that would be the only time an agent would walk a customer without quoting them.

As far as the number of prospects per day, yes, 3 prospects/day would be a VERY slow day. Up until May, as an agent with this company I averaged about 12 quotes/day. I would say the average agent with us is quoting around 6-7/day. Of course some are more active than others. And this is why I do feel the close ratio would be a good indicator of how competitive we are. We have one company to quote with, if a customer comes to us, or we prospect a customer it's entered in one system. Because of the nature of the business model, close ratio is very helpful for us to be aware of.

Ultimately, all I'm trying to get is information to build confidence in our agents that our rates do have a competitive place in our market.

Again, thanks for the feedback.

 

[aacards8]

Re: Captive P&C Agents: Simple Question. What is Your Close Ratio

You had me until your middle paragraph about agents using high rates as a "crutch". If the rates truly are not competitive agents are dead in the water in this economy. Yes you can prospect more but if your rates are too high you're done. P&C is a commodity based sale. There is a small percentage of clients who care about coverages, service etc but 95% of the time it's all about price. Why do you think Geico, Progressive, etc spend millions of marketing $s telling consumers their prices are lower? That's the main (usually the only ) focus of their marketing campaigns.

I know some may disagree with this. P&C agents prove me wrong if you can.

 

[Bob Klee]

Re: Captive P&C Agents: Simple Question. What is Your Close Ratio

As a long time P&C dude, I can say it does depend on both rate & sales skill. As a good friend of mine once said when we had a Huge price increase with Allstate before our competitors took one: I might have to make twice as many calls, but I'm not going to stop producing!

And she was in a very rural area. She was still in the top 10% of all agents that year. She just refused to let the rate keep her from winning.

We also had a "spin" calculator. Basically, like a ROI calculator. You could input what growth rate you wanted, premium, sales growth, close ratio [yes, based on number of quotes to everyone given] and it would spit out how many calls per day your team needed to make to reach our goal! Bottom line, a Whole lot less calls to make if your close ratio is Higher!

Another good measure for you is not Total Close ratio, but close Ratio by Product Type! Standard Auto, non-Standard auto, Home, Renters, Boats, etc.

That is Much better than just total close ratio.

Check out those numbers with your agents.

 

[Bertolinoins]

Re: Captive P&C Agents: Simple Question. What is Your Close Ratio

It is a price only decision for much less than 95% unless you only deal with Internet leads. Most warm referrals, you just need to be in the ballpark while showing some value. That is harder to do as a captive but not impossible. Not every buyer is as price sensitive as we make them out to be.

 

[Bob Klee]

Re: Captive P&C Agents: Simple Question. What is Your Close Ratio

Bertolinoins,

Truly, IMO, internet leads are no more "price conscious" than my Yellow Page clients were. Creating value overcomes price over & over. No problem unless one is prospecting in low income areas with no assets.

Just my experience, others may vary!

 

[VolAgent]

Re: Captive P&C Agents: Simple Question. What is Your Close Ratio

First things first in response to VolAgent.

My main reason for asking this question is to do exactly opposite of what you think I'm trying to do. I'm confident in our company's rates, in fact I was just selling for this company 3 months ago. Because I'm confident in our rates I was pretty certain that if I could get some honest, straightforward answers surrounding close ratio I could then use that information to motivate the agents with the idea that our rates really aren't that bad and that we have just as much of a chance to close a sale as those companies that our model is trying to compete with.

I'd like to make it clear that I do not have a home office/sales manager mentality. It's hard to get a point across through written words so I'm starting to think my post is mis-understood. Truth is, I'm not looking to point fingers in any way. I'm not sure if you read my entire post but if you had you'd see that I was an agent for 10 years, in fact I was an agent up until May. I just started in this position. I'm actually quite the opposite of what you describe. I have nothing but the agents best interest in mind as many of them are close personal friends. But at the end of the day, I do feel our rates are somewhat competitive and I'm only looking for information to get them to focused on something other than rate.

So with that said, as an agent I never used rate as a crutch if I was not producing. If my company was losing competitive edge, I found ways to farm more prospects, plain and simple. And a lot of the agents I'm working with are using rate as an excuse.

Maybe I'm ignorant in believing this, but for a captive company I see close ratio as a good indicator of how competitive your rates are. Yes, there are other factors involved but in general, with a captive company, quotes to closure ratio is a good indication of your competitive place in your market. And if our agents are confident that our company is competitive it's much easier to motivate to sell.

Ultimately all I'm trying to do is find ways to take agent focus off rates. I just felt that knowing the industry average close ratio and whether or not we are in line with that would be a helpful tool for me.

I didn't realize this would turn into such a drawn out thread.

Also, I appreciate the constructive feedback.
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Yeah, you really do sound like a sales manager. And yes, I saw that you were once an agent, guess what? So were most if not all sales managers.

I don't do P&C, so I can't say anything about your close ratio, although according to the 10:3:1 in Life, 31% is good.

My suggestion is, turn it around on the agents. Have them tell you how much business they want to do and what they can do to reach it. Rates matter, but they don't as well. Try to engage them and see if they even want to succeed.

Some sales manager/HO coming in telling them that they aren't doing enough activity is pointless. I've seen enough sales meetings where the sales manager did this. Most likely you'll just put their backs up. Instead, turn it all around on them. Get them talking about what their goals on and get them engaged on how they can achieve them within the systems your company provides. If they are actually motivated for themselves, you might truly be surprised by the results.

 

[djs]

Re: Captive P&C Agents: Simple Question. What is Your Close Ratio

The easiest thing for agents to complain about is rates. I understand that.

But, if agents are averaging 5 household quotes a day, closing 31% of them, 15 household quotes a week, 5 household sales per week (assuming 2 items per household).....

.... Home office should be jumping up and down for joy. I know I would be.

This doesn't sound like whats happening so something is off in the numbers somewhere.

Dan

 

[Bertolinoins]

Re: Captive P&C Agents: Simple Question. What is Your Close Ratio

Bertolinoins,

Truly, IMO, internet leads are no more "price conscious" than my Yellow Page clients were. Creating value overcomes price over & over. No problem unless one is prospecting in low income areas with no assets.

Just my experience, others may vary!

YP is the same as the Internet, blind shopping based on price. That is much different than a lead from a RE industry source. When your pricing is just average, Your best bet is to market to centers of influence that can send you warmer, less price sensitive leads. When a house is closing, a $50-75 premium difference is a non issue but it is a big deal to an Internet lead. Same with a car sale, they want to drive off the lot so an extra $10 per month isn't a deal breaker. These would not be ideal marketing plans for me as an IA but if my hands were tied as a captive with average rates I would find a way to bind policies. Some of them will re shop you but most get too busy with life and just stick with the same company... Ideally you get them on eft and mortgagee bill so they don't think about it.

 

[aacards8]

Re: Captive P&C Agents: Simple Question. What is Your Close Ratio

That's true to a point if you are at least in the ball park. However there is a "tipping point" where you can try to create value till your blue in the face and you won't be able to get the sale. Our HO rates have gone up 50 to 60% in some cases. There is no way to keep that business if someone was paying $600 annually and their renewal comes back at $1300. Remember, P &C is a commodity type sale. It's like going to one supermarket and pricing tomatoes, then going to another market and comparing. The only x factor is the reputation of the company and claims paying ability. I would imagine Farmer's, State Farm, Geico and the other big names are all equally capable of doing so.

So when you have companies that are basically the same in the consumers' eyes, that's where it comes down to price. I've had sales managers for years preach sell value, price doesn't matter and when I was a new agent I actually believed that. But with all due respect to any sales managers on the forum it's bs.