As the Best Practices Study hits the 30-year milestone, meet the top performing agencies in each of the six revenue categories from the current study, and find out how they used their participation in the program to go from good to better to the best of the Best Practices agencies.
REVENUE CATEGORY: Under $1.25 million
Chris Ballard | President
Kirkland, Washington
Why become a Best Practices agency?
As a business owner, it's difficult to know how you rank. You can think you're doing well, you can think you're not doing well—but you don't really know until you get a third party to gather information to literally start benchmarking. Otherwise, you're just kind of guessing.
Impact on agency marketing?
Even if a client doesn't necessarily know what being a Best Practices agency is, it adds some credibility. In the insurance business, credibility is huge because we're not selling something tangible, we're selling a promise. Having that competitive edge is another piece of ammunition.
Preparing the application?
I didn't really prepare—I just started. There were multiple times when I was like, “Oh, my God! Really?" and I had to go and dig for more information. Being a smaller agency, we didn't have a lot of the metrics, which was eye-opening in itself.
Initial reactions to the results?
Some of the numbers were so significantly higher than my competitors, I was a little shocked. But it made me feel better about feeling so busy. It also reaffirmed the difficult decisions I made two years ago, such as requiring a minimum revenue from our clients, and has given me the confidence to make the next set of decisions. It was empowering.
Have you made changes as a result of the study?
I added a person to our team. That took us to tearing apart all our processes and rebuilding them for the next phase so we could onboard them. We had way too much institutional knowledge and not the robust policies and procedures that are necessary to bring in somebody fresh.
What is your approach to hiring?
The old rule of hiring for attitude and training for skill. I hired an absolutely wonderful person working remotely from the Philippines in a co-employer arrangement with a company based here in the Northwest. The caliber of person I was able to get offshore was so impressive. She has no insurance experience whatsoever but it is a vastly superior fit to hiring for a skill set and trying to make them fit our culture.
Improving your reputation?
We're a small agency, but we run like a large shop. When I reach out to C-suite executives, credibility is so important. We're competing with large regional and national brokers, and when you're a four-person business, it's difficult to ask someone with 4,000 employees to even take a meeting. The Best Practices designation adds certainty that I am who I say I am.
Why should other agencies apply?
If you want to know the truth about your business, you should go through the process. It's going to show you good, and it's going to show you bad, so you have to be ready for that. If you really want to know how to grow your business, you have to be able to tell yourself the truth, and numbers don't lie.
REVENUE CATEGORY: $1.25 million—$2.5 million
Craig Swanson | President
Lake Zurich, Illinois
Why did you become a Best Practices agency?
I purchased the agency in 2008 and started to use the study to tweak the direction of the business by using it as a guidepost. I hadn't considered entering but was nominated by one of my company reps. I was very familiar with it because I was already using the study to guide the business.
How did you find the application?
Since I'd already been using the study for 10 years before I entered, I was already looking at the various benchmarks and figures and had changed the way we tracked our numbers. When it came to submitting the data, it was pretty easy because I had already been tracking them like an at-home player.
How has the Best Practices Study guided you?
The agency has grown from two part-time employees to about 13 employees. In that process, you have to make sure that you're bringing on the next staff member to handle growth at the right time. The benchmarks that track revenue per employee were helpful because otherwise you're just winging it.
What changes have you made based on Best Practices?
To break out the underwriting and marketing of new and renewal policies into separate job functions. On the commercial side, we restructured the roles and responsibilities because I was able to see that agencies in the size category above us tend to start doing these things, and it leads to more specialized approaches to reach job functions. It made a big impact.
Key metrics that you pay attention to?
Producer compensation is helpful. It's a challenge for every agency to make sure that they have a strong compensation plan for their producers and that the new and renewal commissions are in line with growth targets without being something that's going to break the agency.
Why should agencies use the Best Practices Study?
If you stay within the Best Practices benchmarks and try and keep your statistics in line with the Best Practices agencies, you'll find that delivering the service level on the client side follows very quickly. It really becomes almost like a self-fulfilling prophecy. Everything just functions better because you're not reinventing the wheel and trying to figure it all out yourself.
Has the study affected your perpetuation plans?
I have the distinct advantage of being in the benchmark average age of a shareholder for another 10 years. However, the benefit of participating is that I can get ahead of these things. Our business plan is to be constantly bringing in a cohort of new producers every three to five years to make sure we always have the next age group in the agency.
Increasing credibility?
When we're asked for references, we mention Best Practices. Recently, it sealed a deal with a client. It also helps to be a top performer in our revenue category. Most industries have something similar, which usually translates to the client.
REVENUE CATEGORY: $2.5 million—$5 million
Phil Bogle | Owner
Lyndhurst, New Jersey
Why did you want to become a Best Practices agency?
In 2003, my agency was nominated to submit detailed operational and financial data to participate in the study. At that time, my son and daughter had entered the agency, so I had to figure out ways to grow the business since we were now a six-person agency with revenues under $750,000. Best Practices gave me an avenue to gain information on how other agencies operated and how I could grow the agency.
What do you love about the Best Practices program?
No matter the size of the agency, there's always room for improvement and to make your agency grow—whether you are a two-person agency or a 100-person agency. Every agency has questions and issues, and Best Practices provides valuable knowledge of how things are run throughout the industry and what the norm is. No one's identity is revealed, so it is truly based on the size and operations of similar agencies. It gives you indications if your agency is performing better or worse in certain areas compared to others within your peer group.
What changes have you made at your agency?
One of the first things I did was to get as many policies on a direct bill with the insurance company. If an agency bill is the only way for certain policies, then we make sure that the premiums are either financed or put on installments. This has reduced our accounts receivable tremendously, eliminated bad debts and reduced accounting expenses.
How do you engage your team?
A change that I made and continue to stress is to involve the employees in all aspects of the agency. I opened up many of the agency financials and files to the employees and I let them know that this is a team approach. I share with the employees—the good, the bad and the ugly. If the agency makes money, then a percentage of it gets shared with the employees.
How have you benefited from the program?
In 2003, the agency made $750,000 in revenue with six employees. In 2018, the agency made $4 million with 25 employees. In 2022, the agency has 18 employees and revenues of more than $5 million. I attribute the growth and increase in revenue to studying, analyzing, modifying and implementing things I learned by participating in Best Practices.
Why should other agencies try to become Best Practices agencies?
It gives you recognition amongst your peers and the insurance companies that you represent. We now find it much easier to get a new market. Once we tell them that we are a Best Practices agency or that we participate in Best Practices, it makes the insurance company or wholesaler sit up and listen. It gives you an edge in a very competitive industry.
Advice for a first-time Best Practices agency?
Do not get discouraged. You may find it overwhelming at first, but if you stick with it, you'll find it gets much easier as time goes on. Then it's like having a full-time consultant in your agency.
REVENUE CATEGORY: $5 million—$10 million
Bryan Hall | President
Bozeman, Montana
Why did you want to become a Best Practices agency?
It stems from wanting to remain independent and control our destiny. To do that, we needed to make sure that we were measuring ourselves so we can improve on an annual basis.
How did you find the application process?
I was energized by it. I was not the president of our company at the time, but it opened up this menagerie of data that I can collect and put on a dashboard to see how we are doing. It was cumbersome, but, like many things that take time, it was worth it.
What are the biggest takeaways?
It shows you some of the blind spots that you may have in your agency. It forces you to get outside of your day-to-day. The fun part of our job is taking care of our clients and having great company partners to sell insurance. When you do that day in and day out, sometimes you take your eyes off the prize. The Best Practices Study helps us hone in on that vision.
What changes have you made as a result of the study?
Our sales velocity, age banding and net unvalidated producer payroll (NUPP) have shown us what we need to do to continue the tradition of this company, which is a 50-year-old independent insurance agency. We've made a couple of new hires in our sales department. One is a seasoned professional from outside of our industry who we think is going to fit in really well within the insurance industry and can create good relationships. We've also made a hire from Montana State University here in Bozeman. That individual will be a brand-new producer mentored by a salesperson within our agency and hopefully on a three-year validation track.
What did you learn from your sales velocity?
The question that it raises is whether we are getting enough opportunities that are cultivated from a sales call. Are we knocking on enough doors and getting the door open? And do we have enough of a salesforce to meet our goals? Also, when an agency gets older, validated producers can get comfortable, but then sooner or later the sales velocity is going to drop.
Best part of being a Best Practices agency?
Life's a lot harder when you try to do everything on your own. Best Practices opens a door to a peer group. The guys at Reagan Consulting look out for you, and they know that if you need some help, they might know of someone who has already been through it and can solve something in a way that you wouldn't have thought of.
Advice to other agencies?
Don't rest on your laurels. Use the data, the metrics and the study itself to continue to make yourself better.
REVENUE CATEGORY: $10 million—$25 million
Scott T. Kerestesi | CEO
Las Vegas, Nevada
Why become a Best Practices agency?
It's a way to make sure that we continue to strive to be the best. It's really helpful as we look to provide the best services and be the best agency that we can be. Using the metrics gives you a sense of how you stack up against other firms and how they do things. We use Best Practices as a measuring stick to make sure that we're continuing to get better. It's a nice way to validate putting the time and effort into what we do for our clients and our employees.
What are the important metrics for your agency?
Rule of 20 gives you a value of what you are as a firm, so how well you are doing in creating shareholder value. It doesn't just measure investment, but it shows you where you're profitable and the value of your firm.
What changes have you made based on the study?
Investing in new producers. When you look at the investment that you need to make in unvalidated producers to make sure you continue to grow—and for a firm like us being independent, to make sure that we perpetuate—that's key. Using the metrics in the study, you can make sure that you're investing for now, as well as for future success.
Has Best Practices helped you recruit talent?
The Best Practices designation is great from a recruiting standpoint. Competition is fierce for obtaining talent in today's marketplace, so it speaks volumes when you're recruiting and you can say, “Hey, you're going to come work for an agency that's truly the best and has tangible data that backs that up." It's a great differentiator when we are going out to recruit not just producers but all other staff.
How has the Best Practices designation built your credibility?
As a broker, you have a relationship not just with your clients, but with your carriers as well. We definitely leverage it in our marketing strategy. It's a big differentiator. There aren't a lot of Best Practices agencies in our state. There's only two and we've been the one that's been a Best Practices agency the longest. And with our designation as a top performer this year, we're definitely going to take advantage of that, because it truly says we're the best in our revenue class in the country.
Why should other agencies try to become Best Practices agencies?
By taking the time and effort to do it, you'll not only learn a lot about how you stack up against other top agencies, but you'll find things that are really going to help you determine how to be successful. Best Practices provides a good overall picture of how a firm operates. And if you really want to know how your firm operates, it's a huge benefit and gives you a good sense of direction for how to be successful in the long term.
REVENUE CATEGORY: OVER $25 MILLION
Michael Cunha | CFO
San Francisco, California
Why is the Best Practices Study valuable?
In an industry that is so fragmented, it helps us see what the best firms in each one of those revenue bands are doing and how they're driving those results, such as how they're operating, what they're focusing on, and their key performance indicators. If you're constantly thinking about growth and perpetuation, Best Practices is a tried and true way to be able to ensure we are doing the right things.
What's the benefit of being a Best Practices Agency?
It reinforces our commitment to growth. In turn, that allows us to hire more folks and reinvest in our people through learning and development. This is done with the ultimate goal of being able to provide better client service.
What are some of the key metrics for you?
The Rule of 20 allows us to look at our growth and how it interplays with EBITDA. Sales velocity shows how strong our growth engine is and how we can sustain it. NUPP makes sure that we're investing in the future.
What is your company's approach to staffing?
It's a strategic focus for the executive team and the leadership group. We're a professional service firm. We don't have big buildings or equipment. We build relationships. We help people understand risk. We help them place that risk and diversify it. To do that, we need to have great talent. We've made a lot of investments in talent acquisition. Learning and development are also a focus. We look for talent, bring them in, mentor them and help them grow their careers.
How does sales velocity underpin your sales culture?
It tells us if we have the sales engine to continue to drive growth. The survey also provides sales velocity in age range bands. Sales velocity makes sure that we are going out there, meeting clients and are in tune with what clients need, as well as bringing along that next generation of producers.
Advice for a first-time agency applicant?
It's a pretty straightforward process for us to apply because we've been doing it for a number of years. There's a little bit of work upfront but you need to make sure that you understand the data you're being asked to provide and then provide it. What you get in return is well worth the investment. We're constantly trying to learn. Continuous learning never stops and the Best Practices program is just another way to see how the industry is performing and what the best firms focus on.
Has the Best Practices program changed your approach to marketing?
We've doubled down on content and thought leadership. We want to be one of the thought leaders and be out there publicly. That helps drive engagement online through webinars and videos or through in-person events. It kind of layers up. Growth is the name of the game and if you do the fundamentals, you get the results.
Will Jones is IA editor-in-chief.
