Kelly and Heath Talk Payments
Payments can be a nuisance and they can eat up your time if you don’t manage them properly. So, for this episode of the Ridiculously Amazing Insurance Agent Podcast, we are going over the time management tip no one was expecting.
“Payments take minutes, right? What’s the big deal? They take ten—no, fifteen minutes tops. But that adds up.”
We are talking about payments, people. You need to implement a payment strategy and we can hear you giggling or simply not getting it. That’s not something you need to change, right?
“This is how we’ve always done it.” But is that ever a reason to keep doing something?
Payment strategies are, by far, one of the most misunderstood tips we have in our roster and we understand why. Payments take minutes, right? What’s the big deal? They take ten—no, fifteen minutes tops.
But that adds up.
1500 Agencies Collectively
So, why are we talking about this? It’s not to hear ourselves talk, but to show you that there is a better way and there is a reason to give it a try.
Heath’s background is in brandnew, startup agencies. Everyone is starting on a new page. No one has learned anything they have to unlearn yet.
But Kelly’s experience is with people who have bought books or are multigenerational. And what is a very common theme in established agencies?
You are always fighting old behavior, trying to cut the bonds to systems of the past that simply do not work anymore. We’ve been around to quite a few agencies and they always resist this one.
Let’s do some math.
If you aren’t sold, think about this. Imagine that out of your whole book there are 20 people who pay in person with cash and (on average) they take 15 minutes each. At the end of the year, you have lost 60 hours to payments alone.
No one reading this should be cool with that. We can think of, roughly, 700 better uses of that time. When you look at the bigger picture, you’ll see that taking payments like this helps absolutely no one. They aren’t productive, they simply waste time.
And time is money.
So, where do we go from here? Start by stepping back.
Take a Look at the Problem
The first problem is that the client is wasting time on this, too. Who likes to call in and make a payment all the time? It’s a lot to remember and to keep track of along with everything else.
Next, it hurts retention. Mail is really slow right now which means mail-ins don’t show up in data like they used to. Call-ins want to control exactly what day they are paying and then disputes can occur because they “thought it was yesterday” and it goes on. There is just a lot of drama around it.
Third, it takes time that you could be spending on something else. Every book is different and while some have high call-in, some have high mail-in. The worst part of all of this is most agencies work with carriers who have these functions and end up doing a job they are basically paying someone else to do, but that’s a whole other thing.
The Solution
Ultimately, you need a payment strategy. Things need to change and the way to do that is focusing on each client individually.
Rome wasn’t built in a day, so you take on each customer as they come. And you make them choose.
“Would you like to use EFT or to Pay In Full?”
There will be objections to that, especially for a time management tip. You migt be worried that people can’t afford that, but we need to let you know that that’s not something you could ever know without giving them that option.
The second on is that that will lose you half your book.
But let us tell you a story.
We had a client that was a bank owned insurance agency that wanted to close their branch offices when COVID was raging. And they were afraid.
They thought that this would, for sure, send all of that business right out the door, but it didn’t. Actually, they did a little research and found out that they were the only agency in a 15 mile radius that stil allowed walk-in cash payments.
So, in the end, they lost absolutely nothing. Which leads us back to our original point of how you need to adopt a payment strategy in your insurance agency.
Let’s Talk About How You Do It
Like we mentioned, you can start with one customer at a time, old or new.
Way #1 – New Business
Tackle new business with a unified front. Every new account you open, offer them paying in full or EFT and that is it. The same goes for rewrites.
Way #2 – Look At Your Book
For your current book, make a flier. It can say “you are spending too much on insurance.” Show them all the fees that you are getting charged and the discounts they are missing out on. Most people are just waiting for you to ask them.
Way #3 – Push the Pushers
There will be a group that you’ll have to ask at least four times. So, get creative. Take away the bowl of candy and make them wait a few minutes before handling their payment. Our favorite one is a fee.
We encourage our clients to implement payment fees. When you have someone walk-in to pay it’s a $10 fee and guess what happens to those walk-ins? Poof, they are gone (or that’s the hope). You’re team will be so happy once the walk-ins decrease.
When we talk to teams like this they are generally overjoyed at all the time they never had before.
Way #4 – Replace It With A Review
A payment is a waste of time for littel benefit for each party. Replace that with a policy review. Take a look at what their plans are for the year and adjust their coverage for that. Check in on that day.
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As you can tell time management is really on our minds right now. Why is that?
We are relaunching our time management course on INSERT DATE and we think that every agency owner, leader, or staff member can get something out of this course.
Anyway, if you want to listen to the full episode, you can do so HERE.
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