What is Your Capacity for Growth?
What is Your Capacity for Growth?
The following article was written by Senior Marketing Specialists’ very own Vice President of Growth and Development, Dan Mangus, and was published in California Broker magazine for June 2024.
To access the full magazine and original article, click here. You can find this article on page 42.
How realistic are your expectations when it comes to growth? Having dealt with hundreds of agencies attempting to establish ways to grow and determine their capacity for growth, I have found that most have not set down to address the immediate and long-term impact of it.
Growth can come in many forms. Organic growth that establishes one new client at a time can come from effective marketing efforts, referrals, or strategic alliances. Acquisition growth generally brings on blocks of clients all at one time. If you are using acquisition for growth, ensure the methods and style of the agents you purchase align with yours. Since their clients were probably attracted to the agent’s style, this helps to ensure that the personality of the clients you acquire will likely be similar to your current clients. Be prepared if acquisition takes you into a new product line or a geographic area new to your practice.
You can enhance your practice if you have built the infrastructure to support the new responsibilities inherent in having additional clients. Let’s examine a few ways to embrace growth while keeping your brand’s reputation solid.
Your Organization and Staff
Accurate expectations of your staff and clients need to be monitored and correctly set. Factors include the financial costs of client support and the human resources that will be necessary. Don’t assume your staff will welcome growth or have the capacity to support added responsibilities. Will you ask a staff member to suddenly take on a management role they are not trained for or desirous of? As an agency owner, recognize that your passion about your business differs from even your organization’s most dedicated members. Be open about growth planning to make certain no one is broadsided by sudden or burdensome growth and its added responsibilities.
Even if your growth is small and incremental, you will eventually outgrow systems unprepared to grow. Use the rule of 70 to determine when your agency will double its size at the rate of growth you are experiencing. Divide 70 by the estimated annual growth rate to determine how long your agency will take to double in size at the current rate. For example, if your agency is growing by 20% a year, you will double the size of your agency in 3 1/2 years. It will help you determine the runway you must prepare. Can you, your staff, your location, and your systems handle your agency being twice your current size? Be ready.
Your Clients
Most complications of growth come from not setting service level expectations properly. Unrealistic expectations may attract new customers but almost immediately put your staff in uncomfortable situations. Poorly set expectations can also quickly lead to dissatisfied customers, which leads to negative feedback that may impact your reputation. Examine all the activities and system resources required to support the promises you give to a new customer. You want to exceed your client’s expectations, so build in ways to provide those un-promised extras.
Be precise in your marketing to attract clients that create the most value for you. That way you will spend your time wisely, caring for the correct type of client. The type of bait you use will determine the kind of fish you catch.
To create space for growth, you may also have to “fire” clients who need excessive unprofitable support or only create problems with your practice. The quicker you remove the bad apples, the better you can realign those resources and give relief to your team and yourself.
Building Your Plan
To properly analyze your practice for growth capacity, you will need to collect the appropriate information and allow yourself sufficient time to develop your plan of action and reaction to the opportunities presented to you. Be specific as you build your strategy. Dig into the details that can undermine your growth as well. If you have staff who have attempted to make themselves irreplaceable, realize that they may have been successful in doing that. However, remember that they have made it impossible for you to grow beyond their own personal ability as well. The same is also true for you. If no one else can do what you can, you will only ever add the number of clients that you can individually support. Consider finding ways to begin sharing or offloading some of your responsibilities to others to give space for you to grow the size of your practice. Detailed journey mapping is one of the best ways to examine all aspects of a client’s impact on you and your team.
Examine the calendar for times of heavy activity. Don’t make a decision that is manageable for your organization in times of low activity, when it won’t be manageable in busier times.
Leave room for growth spurts from unexpected opportunities. For instance, an alliance might bring a block of prospects, maybe a marketing venture will exceed your expectations, or other things. Regardless of the cause, you should always expect unexpected growth.
Measure things you may not have previously measured to examine the costs of that item. Items may include client acquisition costs, profit per presentation, client retention rates, average client lifetime value, and average time of client meetings. For instance, if you have five client meetings a day and your client meetings are 1 hour and move them to 45 minutes, you create the space for eight more client meetings weekly.
Know when to say yes and when to say no. Not every opportunity will necessarily be for your individual practice. Only you will know if it’s right for your organization. Discussions about growth can be limitless, but hopefully these reminders will begin your thinking process. Move beyond simply reacting to growth; plan for it so that when new clients come your way, they enhance your success.
Dan Mangus joined Senior Marketing Specialists in 2012 as our National Sales Director, serving over 10,000 agents nationwide. He teaches Medicare courses at universities and keynotes national insurance conferences. He also conducts Medicare certification courses for both the National Guardianship Association and the American Association of Daily Money Managers. Dan has published numerous books and articles for advisors in the Medicare market.
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