Why do we still advocate that you cannot manage what you cannot measure?
In this article we explore the real possibilities of significant improvements in the sales conversions you have.
Of course the better the starting position, the less likely you are to have dramatic improvements. Even so, just a 10% improvement in the conversion of profitable business has got to be worth having. Interestingly even the use of the term ‘profitable business’ when it comes to Insurance can mean many things to many people. Is this taken as a 5 year ROI based on the assumption that your acquisition costs in Year 1 are recovered through the retained fee you will, with 90-95% probability, retain each year after that? Does the majority of your acquisition cost get ‘swallowed’ somewhere and only count an external cost such as an outsourced partner?
The key point here is that this paper can only put forward a simple argument for measuring what is going on and demonstrate at a theoretical level why there is such a massive potential upside for so many brokers.
Naturally, each situation will be different and we would welcome the opportunity to discuss your personal circumstances with you at the appropriate time.
So, how can we boost our sales conversions?
We start by defining a process:
- Define/document what steps are involved in your sales process
- Standardise the sales process across your team (or organisation)
- Ensure that each step during the sales process is carried out in a systematic way
- Log the results.
Let’s take a look at a ‘traditional’ attempt to secure new business via cold-calling and compare this to the ‘model’ process that is supported by The Key 2 Growth’s Insurance Accelerator offering.
Let’s take an example of 5000 prospects and some indicative step by step conversion rates:
|Step||Traditional %||IAP %||Traditional in pipeline||IAP in pipeline|
|Secure necessary paper work||50%||90%||400||720|
|Broker wants to quote||50%||70%||160||453|
|Broker secures ‘appropriate’ cover||62.5%||62.5%||100||285|
So, in this example, we have given a ‘simple’ 7 step process (in reality these ‘large’ steps do have a number of other steps – how often have you seen an organisation lose track of an appointment and not actually allocate it to anyone?).
These figures would suggest a 500% increase in conversions is possible. In reality it could be less although it could be a lot more!
Even the 500% improvement in the table above can be improved upon. A simple 10% improvement in each of the step by step conversion rates above would increase the sales by a further 94%. We are now close on to a 1000% improvement!
The table below supports the Mathematics:
|Step||Prospects to next step||IAP %||IAP % + 10%||New Prospects to next step||Overall % Increase|
|Secure necessary paper work||720||90%||99%||958||33%|
|Broker wants to quote||453||70%||77%||730||61%|
|Broker secures ‘appropriate’ cover||285||62.5%||69%||504||77%|
Understanding metrics and conversion rates are critical to any business.
Can these figures actually be achieved?
We believe the real point here is that by understanding the steps in the process, measuring the success rate, and taking focused action to improve the priority areas of concern, those sales conversion rates really can start to move.
For a confidential discussion on how The Key 2 Growth can help in your particular circumstances, please contact Malcolm Rose on 01293 880180 or email firstname.lastname@example.org