Page 102 - The UnCaptive Agent

PLANNING 75

difficult work. One day, our agency’s secretary came into
my office and demanded that I get off the telephone. She
said, “You were so full of stress that no one is going to
be willing to talk to you! We need to think differently
about the prospecting you’re doing.” She continued,
“You’ve made a couple of sales now. How much did you
make from those sales?” We figured it out, and she then
asked, “How many appointments did you have before
you made a sale?” We figured that out together, and she
asked, “What is your prospect-to-close ratio”—that’s
your closing ratio— “and how many people did you
call on the phone on these cold calls before you got an
appointment?” So, we calculated my suspect to prospect
ratio. Then, she continued, “Let’s divide the number of
cold calls you made into the commission you received
for the average sale you’ve made so far.” And we did
that. This very bright lady then observed, “See, you made
five dollars for every call that you’ve made, whether
someone hung up on you, talked to you, or gave you an
appointment!” A light bulb went off for me that has
remained burning brightly ever since. I realized it was
prospecting activity that generated my income.
I discovered I could forecast my income very accu-
rately based on this. When I got into the property and
casualty business, I built a thinking tool that I call the
Sales Forecasting Tool to help automate the planning
process. If you know a handful of pieces of information
you can build a plan that will reliably result in your gen-
erating the sales income you need in any year. By using
the Sales Forecasting Tool or any other similar tool,
you can build a sales plan that tells you the prospecting
activity that you’re going to have to perform in order to
get to the income goals that are in your business plan.
You need to know (or estimate) the average premium
of the policies that you sell, the average commission rate