The Top 3 Reasons Insurance Agents Fail
There are two sides to every coin and the same goes for a particular business theory. You’ve probably heard the expression – “In order to succeed in business, find out what successful people do, and do that.” This same logic can be applied to the flip side of the coin – “Find out what unsuccessful people do, and don’t do that.” Internet searches return thousands of pages about how to be successful, but there is very little information about how not to fail.
Has it ever occurred to you why insurance agents fail? When we compare successful insurance agents with those who didn’t make the cut, there are three common denominators that explain why insurance agents fail. It’s certainly difficult to talk about it, but there should be some discussion nonetheless.
Agents Fail Because of Unrealistic Expectations
Most insurance agents fail because they had unrealistic expectations and expected too much too soon. This typically results when the business isn’t sufficiently capitalized to allow for the time it takes to show a profit. New agents fail to understand that successful agents rarely succeed because of sales, they succeed because of renewals. This is especially true for property and casualty agents who earn very low commissions compared to life agents.
Agents who strike out on their own without significant capital in the bank typically lose hope early on, and once that happens, it’s almost always downhill from there. Unrealistic expectations are always a result of poor planning. In every case, the agent did not complete the needed due diligence when developing their business plan, or they simply did not have a business plan at all.
Moreover, many agents are not prepared to put in the hard work required to make
their business succeed. They decide they will work the hours they want to work, they pay themselves what they think they should make, and the majority have problems with that dreadful two letter word – NO.
This is only one of the reasons why insurance agents fail. We shall see more reasons as we continue in this discuss.
Agents Fail Because of Lack of Support
In most cases, failure to have access to a support system is more of the fault of the agent, than the person or organization who recruited them. Time after time, new agents feel the necessary tools are just a product brochure, a laptop, and a telephone. It is unrealistic to expect to sell insurance products because you have an insurance license. Licensing and sales do not go together. Competing in an industry with other agents who have spent years honing their craft, requires product knowledge, market knowledge, and most importantly, selling skills.
All of these attributes can be obtained by spending time with a mentor who can share their expertise and help you see the picture for what it is and not for what you’d like it to be. All agents need a support system, but new agents need this system more than ever. A mentor or other support system will help you avoid making mistakes that everyone before you has made. Why go it alone when you can access the experience and wisdom of others who have been there and done that?
Agents Fail Because They Focus on Commissions Rather Than Service:
Another reason why insurance agents fail is because they focus mostly on commission rather than service. Have you ever been to a restaurant that provided lousy service, and if so, did you ever go back? Yes, commissions are important, but renewals are more important. The only effective way to ensure your client’s renewal business is by providing outstanding service. Your outstanding customer service will always be your secret ingredient for success.
Unless you are willing to exceed the expectations of your clients, your agency is no different that the other ten in your neighborhood. In order to succeed (not fail) you must separate your agency from the rest of the pack, and exceptional service is what gets you there.
How you run your business is really not up to you, it should be up to your customers. You must be open when they need you to be open. You must answer a call before your voicemail is triggered. You must service the living daylights out of every customer whether they are big or small. When you put the needs of your clients before the needs of yourself, you are headed in the direction of a highly successful agency rather than one that eventually fails.
The Bottom Line
New agents need to understand why insurance agents fail, just as much as they need to understand why they succeed. When they enter the market with reasonable expectations, a support system to rely on, and put the needs of their clients before their own needs, they will soon discover how rewarding and profitable the insurance industry can be. They will have the ability to develop a successful business that will serve them and their family for many years and even generations to come.
Of course there are so many other reasons why insurance agents fail, but these are on the top list. The more informed you are about these reasons, the better equipped you would be for success.