Happy Friday and hope that everyone is doing great and ready for the weekend. As I finished this week I wanted to share a concept that can give you POWER!
How often do you catch yourself playing victim? Our rates are too high. Our Underwriters don’t want to write business. Our Customer Service department is against me. Our products are not competitive. These are just a few of the complaints I hear on a regular basis from the Insurance Agencies that I coach. I am not claiming they are not true statements for them YET what I will claim is this: YOUR POWER COMES FROM WHAT YOU CONTROL! Today’s message will focus on ONE THING you control…..YOUR ACTIVITY!
If you grasp this concept today, you will not only take back control but you will know you have always had the Power AND Ability to WIN no matter any outside circumstance and/or Company.
There are two crucial ratios you must know for your Agency/Business:
- Leads to Prospects ratio
- Prospect to Sale ratio
Yet, before I explain let me define what each of these are.
- Lead=Name and method of contact (phone, email, Facebook message, address)
- Prospect=Lead that shows an interest in your Products
- Sale=Customer/Client that purchases your product
Once you understand these definitions you are free to evaluate the value of the ratio. THE RATIO is your POWER and THE RATIO does not matter AS LONG AS YOU KNOW WHAT IT IS!
Let me use an example to summarize this concept. In the Insurance Industry Internet leads are a prominent source of Marketing/Lead Generation and so I will utilize them as an example of the POWER of knowing these ratios:
You purchase 100 Internet Leads (names and contact info.) As you receive those leads you must contact them via many methods (phone call, text, email, direct mail etc.) The leads that you actually contact and are open to a PROPOSAL of your products become your PROSPECTS. Those PROSPECTS that were presented a PROPOSAL and decide to purchase become a SALE.
Here is a example of how these ratios might look:
100 Internet Leads generated 15 Prospects=15% Lead/Prospect Ratio (15/100)
15 Prospects generated 4 Sales=27% Prospect/Sale Ratio (4/25)
You MUST know these ratios for every Lead Generation source you utilize! And like I mentioned earlier the ratios DON’T MATTER, what matters IS KNOWING “YOUR” ratios. Let me quantify this for you and show you how this leads to you taking back the POWER of your ACTIVITY:
100 Internet Leads at $6.00 each cost you $600. Average commission on sales equals $200. ROI (return of investment)=4 Sales X $200=$800=133% ROI (Sales $/Lead$)
THOUGHTS TO PONDER TODAY: In your Agency/Business you CONTROL one thing ONLY; ACTIVITY! Do you know your ratios on every Lead source you utilize? Do you track the results of the investments you make OR do you blame your Company/Outside forces for your lack of success? The POWER to win is and always has been in your CONTROL. Once you know your ratios you can move your Business wherever you choose. For example if you decided you need to achieve 16 Sales this month utilizing Internet leads, you can reverse engineer the formula and have a good idea of how many leads you need to achieve that target…YOU HAVE CONTROL. Here is the formula to solve for 16 Sales: Prospect to Sales Ratio=27% You would need 60 Prospects to generate 16 Sales (Sales Goal 16/27% Prospect to Sales Ratio=59.4) AND you would need 400 Leads (Prospect Goal 60/15% Lead to Prospect ratio). AND YES YOU STILL WIN: 400 Internet leads X $6.00 Cost=$2400 AVERAGE SALE COMMISSION $200 x 16 Sales=$3,200!! TAKE BACK CONTROL…..YOU ARE NOT A VICTIM…..YOU ARE THE VICTOR!
John Lucero, is a successful business owner with over 20 years of experience in multi-line insurance agency operations for several major National Brands. With an expertise in Recruiting, Educating, Coaching, Developing and Product Knowledge, his passion and drive to ELEVATE Insurance Agencies to higher levels of success is what keeps him inspired about the future and motivated about making a difference.
