Are you pondering how to grow your revenue after the massive financial impact of the current worldwide pandemic? Whether you operate as a typical sole proprietor or an FSP with representatives, your business could benefit significantly with the targeted help of representatives.
Consider the value that representatives could or do add to your business, and how they could or do form part of your growth strategy. If your FSP has representatives, are they making a difference to your bottom line? Or are you simply creating employment opportunities for others, with possible high risk but low return for the FSP itself?
Representatives can and should help you achieve your business growth objectives in various ways. From conducting client reviews and upselling to your client base, to helping you access new markets, representatives can make a positive impact on your business.
If you have operated in the industry for several years, you are likely to have many clients. Like many other advisors, you probably struggle to find enough time to conduct annual reviews with all your clients.
Furthermore, you probably focus most of your time on the top 20% of your clients, from whom more than 80% of your business income is derived. However, the remaining 80% of clients presents potential revenue opportunities.
Mining your client database is more likely to produce positive opportunities for income if your clients are regularly exposed to your marketing initiatives, or if they have regular contact with your FSP. Database mining is a good alternative to driving an active lead generation process outside of your current client base, as this will not add more clients to your book and further stretch your time with each client.
Successful sales are also more likely to occur when relationships already exist with clients who have previously committed to your products and services. However, if you neglect to connect with these clients through at least one review per annum as required by law, these opportunities could be lost.
Employing additional representatives could enable you to access the remaining 80% of your client base more regularly. Having ‘more hands on deck’ can ensure regular reviews take place and create cross selling opportunities.
By setting clear revenue targets and objectives for your representatives, which link to your overall business objectives, you can further support their contribution to your revenue goals. You can then actively manage this through performance score card activities. This results in more intentional deployment of resources inside your business, which will financially benefit both you and the individual representatives.
Access to new markets
Access to new markets is essential to continue growing your business. This may help you thrive in the face of increasing competition from other FSPs who target the same clients as you, as well as new FSPs that constantly enter the market. These new entrepreneurs have clear objectives to grow their business; they have specific levels of income to generate and defined services they will provide to specific clients.
Results from a survey conducted by auditing and consulting business Deloitte in the US in 2015 also highlight areas of growth for FSPs. The results revealed that many consumers have a renewed desire to purchase financial products, and that life insurance is one of the ripest areas for potential growth.
They also suggest FSPs should adapt their marketing strategies and work to overcome some common challenges, namely:
- Generational divide – Baby Boomers, historically the most reliable customer base – continues to wane.
- Evolving customer expectations – consumers of all generations, but particularly the younger demographics, want to research and buy through multiple channels.
- Diminishing effectiveness of traditional distribution – the way in which carriers (advisors and representatives) have typically partnered with producers (product providers) is becoming less effective.
- Ineffective sales and marketing strategies – underserved markets are not being reached due to outdated and ineffective marketing strategies.
Consider the potential for your business if you appointed representatives who could help your FSP overcome the above challenges!
The right representatives
So, then who do you appoint as representatives? Think about the type of demographics and skill levels required. Will the new representatives provide access to new markets, possibly closing the generational gaps and providing new revenue opportunities? With their different skills and attributes, could they provide new ways to reach the marketplace and offer new and alternative media and concepts to approach and interact with clients?
If you already have representatives, you are not excluded from these considerations. You can review and refocus the current contributions of your representatives. Consider how they are driving and supporting the main business objectives. Think about how you can align their performance to help overcome some of the challenges identified in Deloitte’s survey.
If your business has reached a ceiling on potential revenue growth, based on the market in which you operate and the type of client you target, such as an ageing client base, deploying representatives could provide new and increased revenue opportunities.
Besides justifying the business decision to employ additional representatives, you will be providing employment opportunities with a reward for your FSP.