A common goal for agencies and producers is to double their book of business over the next three years. But how many believe it’s doable? How many stop to figure out the necessary changes to drive that kind of growth?
Without factoring in attrition of existing accounts, it takes 26% compounded growth to make it happen. Not easy, but doable, thanks to the power of compounded growth.
That’s not aggressive enough
What if I challenged you to grow your book by 60% this year?
Related: 2020 sales & marketing tips: Grow your book of business
I get it; 60% sounds like an overly lofty goal for most. But let me reframe it. What if I challenged you to find a 10% improvement in each stage of your new business production. Does that feel less daunting?
Let’s assume your sales process requires three phases.
The first phase, executive briefing, is an exploratory conversation to identify potential alignment. The second phase, strategic analysis, is a conversation to uncover the needs of the prospect. The third phase, alignment plan, is to explain solutions to address the buyer’s needs and earn their confidence in your ability to solve their problem.
You gotta know some numbers
As the saying goes, you can’t manage it if you don’t measure it. Let me show what that means in practice.
When a producer starts, about 50% of their first-phase conversations will move to the second phase; 75% of the second-phase discussions will move to the third phase; and, they will close about half of those third-phase presentations.
Now, increase each of those numbers by 10% (see chart below) and add those conversion/close ratios together with the other growth KPIs to see how much new business would be written. That’s an increase in new business production of $57,235, or 61%. If you continued to improve each of your growth variables by 10% each year, you would quadruple your book of business in three years.
It takes a process
Compounded improvement requires a well-defined growth process. Predictably improving your number of new business opportunities requires a defined marketing and prospecting strategy. Consistently increasing your average revenue per opportunity requires a discipline most lack.
To improve your conversion and close ratios, you have to have a specific process in place to identify opportunities.
You have to be in control of your growth.
Start by defining, documenting and consistently executing on your growth strategy. Measure performance at each step and focus on incremental improvement along the way.
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