The Preeminent Producer Podcast

Segmenting Your Client List

• The Preeminent Producer • Season 1

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Who wouldn't want to supercharge their revenue by being strategic with their client list? In this episode, we lay out out a strategy that can dramatically help you focus your time and attention where it needs to be to grow your book of business. 

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Are you a commercial insurance producer struggling to stand out from the competition? Do you find it challenging to grow your book of business and create a fulfilling career? 

Then welcome to The Preeminent Producer Podcast! Each week, we'll be tackling important topics, sharing proven strategies and insights from successful producers that are in the trenches and have traveled the journey to becoming a Preeminent Producer. 

You'll discover what it really takes to become Preeminent & build your book of business, in a way that isn’t being taught anywhere else. Our hosts are experts in the field and have built thriving businesses by becoming the most trusted adviser to their clients. Welcome to your journey to becoming a Preeminent Producer. 

Let’s dive in!

Ready To Grow Your Book Of Business? 
For More Information go to: 
https://www.thepreeminentproducer.com/

Speaker 1:

Welcome everybody to another episode of the Preeminent Producer podcast. Today we are going to be talking about a strategy where you really can maximize where your effort goes and where your revenue is coming from. This strategy is all about segmenting your current client list, so let's dive in.

Speaker 2:

Are you a commercial insurance producer struggling to stand out from the competition? Do you find it challenging to grow your book of business and create a fulfilling career? If so, then welcome to the Preeminent Producer podcast. Each week, we'll be tackling important topics, sharing proven strategies and insights from successful producers that are in the trenches and have traveled the journey to becoming a Preeminent Producer. You'll discover what it really takes to become preeminent and build your book of business in a way that isn't being taught anywhere else. Our hosts are experts in the field and have built thriving businesses by becoming the most trusted advisor to their clients. Welcome to your journey to becoming a Preeminent Producer. Let's dive in.

Speaker 3:

Well, I think you stop and think about why you're going to segment your clients, and is time. You know, the only diminishing asset that we have as producers is time and we want to make sure that we're using that time the very, very best way that we can to get the very best return on that time. So what we're talking about in segmenting our clients A, b and C clients I'll even add why clients a little bit later is kind of a funny thing here. A client, and we believe in the Pareto principle, the 80-20 rule. So Wilfredo Pareto put that down a billion years ago and it stands as much today that we will find that if you do a review of your book, that 80% of your revenue will come from 20% of your clients. So you need to be spending your time on those 20% and not over-servicing the small clients at the expense of your large clients. So we're not going to tell you what a large client is I mean, that's up to you and your own book of business but you should definitely identify A clients, those largest clients that you have.

Speaker 3:

B clients, and those are clients that are very good clients but have the ability to move up because they're growing. C clients, which are probably not the greatest thing, and Y clients, which are why the heck am I writing and spending time on these guys, because you don't want to be in that category. So spending time segmenting those and then, by the way, on those C clients and certainly the Y clients, at the end of every year or towards the end of every year, you should be trading those things down, in other words, getting them out of your book of business. If you have a small commercial lines department, send it to them. If you have a new producer in the agency, send it to a new producer. But protect your time and spend your time on those clients that give you the largest return for your time. So that's kind of why the segmenting, I think Paul.

Speaker 4:

Yeah, you know it all makes a lot of sense. I agree with that. You know, segmenting is an exercise that we probably traditionally would do towards the end of the year as we're trying to figure out what am I going to do different next year or whatever. And sometimes some of us never happen to me but fail to do that. But to me, a big reason or another reason to do that segmentation is and every time I've done it, by the way, that 80-20 rule seems to hold up. It's just amazing, just it's eerie. But also it can identify vulnerabilities in your book, if you have any.

Speaker 4:

You know, I purchased a book from a retiring producer six years ago or something and there was a big vulnerability in that purchase because something like in his case, 80% of the revenue of his book was one client and it was scary. But we worked out an arrangement and I did hold on to that client for three or four years. Actually I still have a small piece of it. But what they ended up doing after three or four years is moving their entire production operation to Mexico, and this is a company that's headquartered back east. I had no relationship with a parent company, so I did okay with the purchase.

Speaker 4:

But the point is, if you do this, segmenting things like that on your own book will really jump out at you and maybe you can take corrective action. And then the last comment I guess I had to make is in terms of saving you time and I think you mentioned that at the outset, rick, spinning off the bottom 20%, 15%, whatever, yeah, definitely gives you more time and I think as long as you don't use that time doing nonproductive activities, you know you're better off. And also, if you do not fail to do that segmentation exercise once a year or so, if you don't fail to do that, in other words, if you do it I call it mental health you have a better snapshot of your book if there are vulnerabilities and it just takes some of the stress out of it, takes the worry out of it, versus not knowing your own book.

Speaker 5:

Yeah, I think it's a great exercise in one way of, as a producer, becoming more focused on your clients, but also who's paying the bills for you. So I find myself, as a producer, working the producer's hat. A lot happens during the day, a lot happens during the week, months, years, and sometimes I kind of lose, honestly lose track, and focus on that top 20. It'll tell me, like, are we really experts in a certain area? Again, as you said, are we vulnerable to having a financial hit if we lose our biggest client? You know also. So not only can we be focused on that, but we can also then hopefully leverage that top 20 clients to get us other clients. That you know like goes with life, Maybe they know other people or we do the research we talk about and leverage those relationships.

Speaker 5:

And finally, I think, with segmentation, it's really important that once you do the exercise as a producer, you share it with your agency principal, you share it with your receptionist, you share it with your team, so that and it should be taken for granted, but I think many times it can get lost you know a really important client calls in. You want to respond quickly. It's a low level. We talk about it all the time. A low level service bar right now, where people aren't returning calls, they're not responding, and my gosh, the last thing you want is one of your top 20 accounts calling in and getting shoved around or not getting a call back. And so, when you share it with your team, look, these are our top 20s, these are the ones you drop what you're doing when they call and we take care of them, and the only way you can do that is through segmentation. Yeah, good point.

Speaker 3:

And you know it's just not a number. I mean, I have a clients that pay me hardly anything, but they are such a great referral source. And the other thing I'd say is the cost of trading down. You know, you'll find that if you really take a look at this, you may shed 20 clients that give you $2,000 of annual revenue and it frees up so much of your time. And we find that the small clients are much more needy. Yeah, I mean, a large client calls you.

Speaker 3:

My example is always you know, when I was a young producer, I got into the backhoe insurance business and I'd have a guy with a dump truck trailer in a backhoe and they would call me and say, hey, rick, you know we're thinking about getting rid of that 06 backhoe and getting an 09 backhoe. How much more would it cost us? Well, we don't do that anymore. And now somebody will call and say, hey, we just got rid of 10 backhoes. And they don't call me. They call because we've done a service handoff. They call one of the people on my team. They say, hey, we just put the team say hey, so and so just bought 10 new backhoes. Oh good, I don't need to know that. They didn't need to know the difference in premiums.

Speaker 3:

It's a much more sophisticated buyer in the higher end and you, when you get rid of those smaller clients, those needy, give them to somebody who has the time to service their needs. Because you, if you are or trying to become a preeminent no-transcript, then the only way you're going to get to that status is by continuing to move your minimum account size that you will write up every year. You set that and this is a little off-subjective segmenting, I guess it's kind of related you develop a minimum account size, in other words, you will not write any insurance under X amount of revenue to you, and that way you protect your time as well and that may not mean that necessarily your agency won't take on the smaller accounts, but you, as a preeminent producer, should constantly be focusing on becoming the best and premier athletes other than charity golf outings they don't play with average people, they just don't.

Speaker 5:

They play with people who are better than them. That keep pushing them and pushing them and pushing them and that's what a preeminent producer does is they're not completely satisfied with where they are. They're constantly looking to go further, to gain more knowledge, to gain solid clients, to expand their wings and expand that top 20.

Speaker 4:

Yeah, and guys, I think a key component of accomplishing what you both just said is and Rick, I think is exactly to the point, not off subject at all is every time you kind of rejigger every year and spin off, say, your bottom 20%, at the same time you really should evaluate, hey, if hence, or here, here to four, my minimum revenue size account I'm just picking numbers here it's been 2,500. Why not bump that up to 5,000? And now I've got an extra time in my hands. Right and now, for the next 12 months going forward, I'm only going to work on accounts that generate 5,000 or more, and that's the way to grow your book, and that's focused, matt, that's being focused.

Speaker 5:

As a producer, you know what you're going to go after, right.

Speaker 3:

You won't find yourself running around all of that crazy treadmill kind of thing, chasing accounts that are going to pay you $1,000 a year. You set your minimum account size and you bump it up every year, as we're talking about, and all of a sudden you become less busy but more profitable. And that is the pathway to preeminence is managing your time, managing your efforts that give you the best results, that send you into that preeminent stratosphere.

Speaker 1:

All right, guys, I hope you enjoyed that at all. Once again, I feel like I say it every week, but it's all about implementing, implement, implement, implement, so go. If you have not currently segmented your client list, now is the right time to do that, to really start maximizing what the coaches were talking about in this week's episode. If you enjoyed this week, would appreciate like, subscribe, leave a review, let us know what topics you would like us to cover in future episodes, and we're happy to do it. If you'd like more information on what we do inside of the preeminent producer, I encourage you to check us out at thepreeminentproducercom. Until next time, guys. We'll see you in the next episode of the Preeminent Producer Podcast.

Speaker 2:

Thanks so much for joining us on this episode of the Preeminent Producer Podcast. If you're enjoying the show, please feel free to subscribe, rate and leave a review wherever you listen to your podcasts. That helps others find the show and we greatly appreciate it. Once again, thanks for joining us and we'll catch you in the next episode of the Preeminent Producer Podcast.