The Prospect Scorecard – A Simple Way For Insurance Agencies to Improve Close Ratios and Forecasting

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Selling is only possible when prospects are identified and qualified. Agencies and insurance producers must then quantify prospects so that they can increase close ratios and improve forecast accuracy. Agencies need to create a “Prospect Scorecard” in order to do this. The combination of a simple, but accurate prospect identification process and the Prospect Scorecard makes it easier to quantify your current pipeline. This will allow you to improve forecasting accuracy and close rates. You can use it to assess the effectiveness of your insurance agency marketing campaigns, as you can easily judge the quality of incoming leads. This article is focused on insurance agency pipelines but this technique can be used for any company.

It is easy to create a prospect scoring card (or virtual prospect scorecard, if you are an independent agent or virtual agency). Start with the top ten criteria you want to find an ideal client. If you don’t have 10, you can choose 5 or 6. You can use criteria such as industry, revenue, growth, target buyer, specific insurance requirements and participation employees. Once you have identified the top ten prospects (or any number you choose), you can use your scorecard to rate them on a scale from 1-10. A 10 is your ideal prospect, and a 1 is not worthy of discussion. Our current scorecard uses a 5-point scale. Sales agents view anyone below a 3 as unlikely prospects. They are not considered a prospect if they aren’t a 3 or higher. Producers (salespeople), using the scorecard, can match prospects against specific criteria that are quantifiable and based on your ideal prospect profile. This turns the subjective into objective. They can also compare current prospects to previous opportunities and match them against that historical information. Prospect scorecards can be created quickly and are useful for any company.

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After you have established your scorecard criteria, it is possible to add ideal buyer attributes or, to make the process easier, a prospect identification acronym. We use “BUD”, which stands to Budget, Urgency, and Decision maker. If we’re speaking to a CEO or principal, and they are familiar with the pricing paradigm, we will have a capital B and we know that the budget won’t be a problem. A marketing manager who is unsure of the pricing paradigm will give us a lower capital “b” and we will be able to identify qualified prospects. Same goes for urgency and decision maker. If they have all three and their prospect score is at least 3 we can be sure that they will become clients.

You can modify BUD for your insurance company or agency. Your prospect identification acronym might be BUNT (Broker loyalty, Urgency for change, New insurance requirements, Timing). Let’s take “Timing”, a situation where a prospect is forced to rethink their needs. This could be due to an organizational change or a new person. Your prospect identification acronym should be concise and include key qualification elements for your sales cycle. As we quickly grew our sales volume and pipeline, I can recall using the BUD and scorecard at a company around 10 years ago. My office was often flooded with salespeople who would walk in and tell me, “I have a qualified prospect.” They might also ask for my help: “Can you come to XYZ Company Thursday? They are a 9 on our scorecard and BUD qualified.” All of us were speaking the same language. We had transformed subjective terms such as “good prospect”, “hot prospect” and “well qualified prospect” into quantifiable terms such as “a 9″ which was ” BUD qualified. This language should be part of your daily vocabulary and woven into your sales culture.

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You have limited sales potential and a small budget so you need to spend time with prospects who are able to buy. If you’re working with a prospect who scores 3/10 on your scorecard, then you need to have a compelling reason to spend time with them. They are not a prospect, but a suspect. If they score 7 or higher, you have a better chance of closing the sale. You can quickly determine if your prospect is a buyer by using qualifiers like BUD and BUNT. These simple tools can help you transform your subjective, often optimistic views into objective and pragmatic perspectives. This is a win-win situation for both the producer (salesperson), and for owners and management.