Growth of your practice, to be specific. It’s a good thing. Yes? Then let’s look at some more ways you can see more of it in the coming months and make your 2015 a banner year.
In my previous post, we looked at three (3) keys to help you grow your practice:
1. Generate More Clients
2. Increase Your Average Client Transaction
3. Create Transactions More Frequently
In this post, I’d like to look at three more specific keys to increased growth of your practice.
By the end of this post, I’ll show you how to manage these three keys to effectively DOUBLE your production. (Got your attention? Good! Stay tuned . . . film highlights at 11!)
I can think of no better metric at predicting how your year is going to turn out than how many people you’re meeting with on a daily basis.
Meetings with new prospects or with existing clients whom you meet with to review their planning, are the fertile ground from which great things can come to you and cause your practice to grow.
Big deal. Everyone knows the old adage “See More People” is the secret to increased production, revenues and income. You’re right. Everyone knows WHAT will grow your practice. But HOW do you get those ‘At Bats’ with people who can either buy from you or, refer you to others who can?
The real driving force behind having enough meetings comes down to your prospecting. If you aren’t seeking introductions to people who are most like your best clients — i.e. referral prospecting — I suggest you learn how to do that as soon as possible. Doing that will help you grow your meetings and, ultimately, your practice. Probably better than many other marketing tactics will — and I say that from experience.
We offer a Special Report on this topic as well as private coaching on how to utilize a proven and proprietary prospecting system known as The Preferral Prospecting® System. Click these links for more information.
If all things are equal, but your average case size (remember the A.C.T we talked about in my last post?) is more or less than another advisor’s, the revenues you produce will be more or less, too.
If you want to make twice as much as you have in the past (2014?), then you’ll either need to work twice as hard or, generate twice as much revenue from each transaction you generate.
Obviously, you’ll have a range of transactions. We all do. Some cases will be larger (or, smaller) than others. Regardless, your average case size reflects where you’re marketing yourself and prospecting for clients.
If you want to improve your average case size, ask yourself, “Am I in the BEST market/s, for the value I offer?” You can, if you do some research, find a more lucrative marketplace — and the clients it offers — than the one/s you’re in now. Remember — even a modest change in where you’re marketing can have a significant growth on your revenues and income.
Lifetime Value of a Client
Quick story. As you probably know, life insurance policies have an optional feature that allows an insured to be able to buy additional insurance at ages 25, 28, 31, 34, 37 and 4o regardless of their health.
This feature known by various names (Additional Purchase Benefit, Guaranteed Issue Option, etc.) is offered because insurance companies know that, at those ages, the need to buy more life insurance is the greatest it will ever be.
During these critical years — from 25 – 40 — most of us get married, have kids, buy a home, have a mortgage, start a business, etc. It’s also when the most people will have the greatest need for the insurance the companies want to sell. Offering APB or GIO options practically guarantees additional policies will be sold . . . by the companies.
Not surprisingly, only a small percentage of all policies (about 7%) later issued under these guaranteed issue options are sold by the agent who sold the original policy. To be fair, it could be these policies were sold by agents in these same age groups (e.g. under 30) and agent attrition can’t be ignored as a factor behind the low percentage of later sales made by the original agent.
But I submit there’s another reason. The original agents didn’t stay in touch with their clients. They were so busy seeking new people to sell that they ignored their past clients. True, some clients moved away from where they bought their first policy. But more often than not, benign neglect may be the most significant reason why those later policies were sold by agents who didn’t sell the original policy.
SYNERGY . . . It’s a Beautiful Thing
Earlier I promised to show you a do-able way to DOUBLE your production. Not surprisingly, it depends on how you use the information we just discussed above.
Your growth or productivity reflects three factors:
• The People You’re Seeing / Meeting
• The Size of Your Average Case
• The Percentage of a Client’s Lifetime Value You’ll Enjoy
Here’s a simple graphic that reflects how this works:
Each factor is a key element of a formula or functional relationship — as you can see is being shown by the white numbers in the red box at the top.
Let’s assume each factor is equal and valued at “1.0” The resulting formula thus gives us a growth factor of “1.0”.
OK, now let’s see how you can DOUBLE your growth!
The first way you can double your revenue or growth is to double the number of people you’re seeing and meeting with . . . i.e. your ‘At Bats’ . . . e.g.
The second way you can double your revenue or growth is to double your average case size . . . e.g.
The third way you can double your revenue or growth is to double the length of time you retain a client and, as a result, realize a greater portion of that person’s lifetime value based on future transactions for the service you offer . . . e.g.
In theory, each of these approaches will DOUBLE the revenues or growth you’re currently enjoying.
In practice, that’s not likely. Why? Because it’s not easy to double the people you’re seeing, double your average case size or double the length of time you retain a client.
OK, now let’s suppose . . . you improve each of the factors we’ve introduced by 25% . . . that’s far more do-able than if you actually had to do twice as much of any one of these factors as you were up to now. Fair?
But look . . . if you improve each factor by just 25% across the board, you actually end up DOUBLING your revenues!
Making a ‘little bit’ of improvement in each factor goes a long way toward making your revenues and the growth they’ll support . . . what you really want them to be.
Growth comes from doing many things, a little better and more consistently than you are now
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