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How Product Expansion Could Help Your Agency Accomplish 3 Major Goals This Year

Posted by Lori Fogle on Thu, Mar 25, 2021 @ 01:25 PM

We’ve identified one action you could take to achieve three major goals in your agency this year. Those goals are:

  1. Better serve your top producers
  2. Feasibly grow your revenue by as much as six figures
  3. Help increase agency valuation

In this blog post, we’ll describe our strategy in greater detail and explain why it might be a smart option for your agency.


Diversifying your agency through additional product lines, or as we’re calling it, “product expansion,” could be the key to achieving these goals in your agency.

And we're going to tell you exactly how to execute on this one key action to help make great strides by year-end.

But first, why are we sharing our strategy with you?

To be completely transparent, it’s because we hope you’ll choose to partner with us to help you implement everything you read here.

And two, because we want to add value by sharing what’s worked and what hasn't, based on the experiences of other agencies.

Knowing and applying this information is the tide that lifts all boats: Yours, ours, the producers’, and the clients.' 

Improve Agency/Producer Relations and Business as a Whole

One of the top reasons agency owners might want to consider product expansion is that it helps keep them relevant. Today’s producers want a full-service agency. They like the idea of a “one-stop shop.”

And producers are looking for this because clients also want one person they can turn to for a comprehensive financial strategy that helps them protect their family and thrive in retirement.

“The demand is there for more financial vehicles that help mitigate risk,” says James Wong, Area Executive Vice President, Platinum Division of Partners Advantage.

Clients today want to work with a financial professional who can offer them a variety of options. And while independent producers can go through multiple agencies and IMOs to get access to many different types of products (and they do, according to a study done by NAILBA stating the average producer works with 3-7 agencies), that’s generally not ideal for them or for you.

Besides being of greater service to the end client, product expansion can be a benefit to you and your producers because the profit characteristics are different between life and annuity. So, if you’re a life-only shop, you’re used to a certain pay structure, as are your producers. By adding annuities to your product line up, you balance that out with the upfront commissions that characterize annuity sales.

Now, think about this:

One of the considerations ratings agencies take into account when they review insurance carriers is how many lines of business they offer and if they're monoline, that can negatively impact their rating.

So, even though your agency doesn't receive a rating, you could draw the conclusion that having more than one line of business is looked at more favorably in the industry.  

Good Candidates for Product Expansion

So, what type of agency is ideal for product expansion? If you’re an agency owner who has worked hard at growing your life insurance production and that's going well, for example, then you are an ideal candidate for product expansion.

We might think we should just stick to what we do well and that’s true. We wouldn’t want you to lose the bread and butter of your business. However, what we’ve found in our research on  strengths and weaknesses of top agencies, is that regardless of your size or structure, if you have at least one core line of business doing consistently well and you have a few other key characteristics too, you can be successful in adding annuities.

Those key characteristics are:

  • A desire for growth and not in a business "harvest” mode (we classify agencies according to the stage of business they’re in: Harvest, Growth, Level)
  • In the growth or level stage of your business and need a solid way to increase revenue 
  • A willingness to invest time in the process
  • Being coachable and able to adapt and learn
  • Have at least one marketer willing and able to expand their skillset to include annuities
  • Have an operations team with the capacity to pick up more work

If you clear those barriers to entry, we see two specific opportunities in this space that can help cement agent/agency relationships and help you grow your business:

  1. Developing your existing agents and increasing their production
  2. Bringing annuity business that’s currently going elsewhere into the fold

What we really want you to get from this post is that you have significant agency growth potential right in front you. And we are going to give you a repeatable system for accessing it.

4 Big Agency Pain Points (and how you could solve them)

We’ve worked with agency owners since 1993 and do approximately $1.4 billion in annuity production year over year. What this means is we are privy to what works in positioning and selling annuities and what doesn’t work. We know the major pain points agencies experience that product expansion can help solve.

Over the years, we’ve seen a few things and you may recognize some of these situations too:

1) There are years where annuities are favored and years where life insurance is favored.

This is why it’s so important to be diversified. During the pandemic, for example, agency diversification would have been useful because if you were life only, you might have encountered issues when underwriting was stricter and more complicated. Having annuities as well would have allowed you to pivot, if necessary.

2) Agents are taking their annuity business elsewhere.

There may be times when an agent thinks, I’d like to get into annuities, but my upline never talks to me about that –– I guess I’ll reach out to this other agency.

That would clearly be a lost opportunity, so what we do is help agencies drive a wedge between that other agency and their producer. Helping make the relationship between the agent and agency more “sticky.”

As we mentioned before, NAILBA did a study and found that independent financial professionals have 3-7 IMOs. By expanding into new product lines, you have a new way to earn a greater share of the wallet and strengthen your relationship with producers and your business as a whole.

3) Money is being left on the table.

If agents aren’t selling annuities because you don’t offer those products, you are missing out on revenue. And it doesn’t have to be that difficult to change.

There are some cases that would naturally lead to an annuity sale, but if you don’t offer annuities, you can't take advantage of that.

4) Your agency valuation wasn’t as much as you’d hoped (or you have no idea what your agency’s worth)

Our focus in 2021 is helping agencies increase their value. One of the ways you can increase the value of your agency is to diversify.

Whether you’re looking to sell or not, most agency owners want to know what the value of their agency is. Especially if that’s tied to what their retirement will look like as the agency owner.

If you would like to sell but find out your agency isn’t worth what you thought it was, there are key areas, like product expansion, that may put your agency in a better position to sell for top dollar down the road.

But ironically, when you get your agency to that point, you may not want to sell!

Why Training and Support Can Lead to Success

The truth is, almost every agency has tried at one time or another to expand product lines (publicly or not), but it didn’t go as planned.

What we’ve found is that these agencies lacked a well-organized process for product expansion. And that's why proper training and support are important. 

“There are six critical components to successful product expansion. It’s having all six, you can’t even be missing one, that instills the confidence necessary to make it work. It’s the well-defined process, accountability, and consistency that makes or breaks it,” says James.


Because product expansion is a big step with a lot of moving parts, this is not for dabblers. We’ve created an entire training program, but you must have the capacity and commitment to execute on it with our help.

Realistic Expectations of Financial Growth and Other Benefits as a Result of Product Expansion

Although product expansion is no small undertaking, there are clear benefits that make it worthwhile.

We started this blog post telling you about major wins you could have this year when you diversify your product lines. We already covered how it can improve and expand the relationships with your existing producers.

Now, let’s get down to brass tacks –– the annual revenue increase you might expect.

From an economic standpoint, product expansion could be a huge benefit. We’re talking an increase in revenue by as much as $175K per year. (If the program is followed to a “T,” that is.)

OK, sounds good, you might be thinking, but how did you arrive at that figure?

It goes back to a repeatable process. We have determined the steps to this six-figure revenue hike. And we’ll even lay them out for you:

  1. Pick 25 producers to participate in the training program
  2. Have those 25 producers select 10 existing clients
  3. Hold 5 positive discovery calls at the end of the drip campaign
  4. Complete at least 3 fact finders
  5. Close 2 cases of average size ($88K)

*And then continue following this 8-week process throughout the year.

At this point, you may be thinking, we've tried this before; it didn't work. 

And we get it. If you have a strong marketer on the life side, you probably feel that you can't pull him or her off the phone to engage in a process like this. As we mentioned before many agencies have tried it and it didn't go as planned. 

That's exactly why we start with helping you identify which marketer is best suited for the task of product expansion AND we have a specific training program for Operations and marketer(s). 

What Could Go Wrong with Product Expansion

Even though we have a well-defined process for helping you get to your goals, we can’t act like it’s all sunshine and rainbows when you decide to expand your business. In fact, there are FEW challenges that can crop up and prevent success. To help mitigate those, you’ll want to maintain close communication with the Platinum marketing and operations teams at Partners Advantage.

First, it’s important that your support staff be trained and have a high comfort level in working with our onboarding team.

Of course, there will be some challenges out of our control, like carrier-related delays.

Other challenges can include producers that don’t follow through on the plan laid out for them, resulting in wasted time and effort.

“Some independent agents have an incredible amount of freedom and that doesn’t always work in their favor. Because their time might not be spent as effectively and profitably as it could be. Which is why we have the tracks to show producers how, when, and what to do. It’s practically failproof. IF you do the work,” says Bill Jackson, Dir. of Advanced Markets, Platinum Division, Partners Advantage.

One of the keys to success is to start this process with existing downlines rather than trying to build relationships with brand new producers when you’re first starting out.

However, even when doing that, we’ve seen a lack of confidence derail an agency’s efforts to diversify. They may be hesitant to approach a big life producer, for example, to try to create a wedge between them and their annuity agency because if they fumble it, they could lose that chunk of life business too.

And that is completely understandable, but you can gain confidence with training and resources, as well as additional benefits to offer top producers. That’s what our program is designed to provide you.


How This Program Was Created

After careful analysis of agency production trends in recent years and a look at how external factors have affected production (pandemic), it felt like there was a need for agencies to expand their offerings. Not only that, but there also seemed to be an opening in terms of helping agencies do that.

To try and prove that theory, we dove into what made our Platinum partners successful and concluded that a lot had to do with their diversified business model. Plus, our own testing and years of experience between Bill, Vanessa, and James, who know what it takes for producers to be successful in the annuity space. It was because of this we believed we could further develop a valuable and repeatable strategy.

There’s a lot more packed into the strategy outlined below, which you’ll see, if you choose to partner with us.

The 6 Key Components of Our Product Expansion Strategy

  1. The 4 C’s [Carriers, Contracts, Compensation, Compensation Grids]
  2. Operational Procedures
  3. Marketer Training
  4. Agent Training
  5. PERC [Product Expansion Resource Center]
  6. Monthly Business Update Meetings

How to Compete Against Annuity Agencies That Have Been Around for Years

Now, it can be a challenge to jump into a new arena when there are strong competitors already there. That’s why we created this program –– because you do have to get up to speed quickly.

We’re one of the few (3 others we can think of) that have done top production (by size and capability) on both life and annuity sides of the business. Additionally, our affiliation with Gallagher and the talent, knowledge, and resources they bring can be a benefit to our agencies.

Relying on the program Partners Advantage has put together would realistically take about 8 weeks to get off the ground and you could expect to see results in approximately 8-12 weeks.

The process we’ve developed works so well because we start life shops off with a couple of opportunities and concepts that easily transition to an annuity sale.

“Our philosophy is to share your expansion story with current producers first. Be transparent with them. Remember you’re a service-oriented business, so this is about providing an additional service to your producers,” says James.


Why Now?

We’ve outlined many reasons why an agency principal would want to consider product expansion, but the real question is, why do it now?

Here’s why: Nothing is more expensive than a missed opportunity.

Product expansion helps you grow your business and if you meet the criteria we mentioned earlier, why wait?

Because expanding now helps make certain your business is valued as highly as possible when you’re ready to sell, or for your retirement security. One of our focuses for 2021 is to help with improving and increasing agency value.

“Mergers and acquisitions are still happening. Taking advantage of product expansion and PERC [Product Expansion Resource Center] can make your agency more valuable in the long-term, whatever your future holds,” says James.

Doing it now is also important because of the time we’re living in…

“Adding an annuity division to your agency is especially timely because we still have thousands of Baby Boomers retiring and looking for guaranteed income. It’s important that we help them position assets to avoid extreme risk. With market volatility and persistent low interest rates, some cash alternatives are unattractive. Because of this, the annuity space is primed for growth and you don’t want to miss out on that opportunity. With strong annuity tailwinds in 2021, it’s imperative you take advantage, or someone else will,” says Bill.


During the pandemic, we’ve found this is a perfect time to learn something new -- expand your skillset. So, why not learn something that could be valuable to your agency?

What to Do Next

We’ve reached the end of our time together for now. I hope you’ve found benefit in what we’ve shared.

The next step is simple.

Decide if you want to accomplish these 3 goals this year:

  1. Better serve your top producers
  2. Feasibly grow your revenue by as much as six figures
  3. Help increase agency valuation

Then, if you decide you want to use product expansion to achieve them and would like our help with that, let’s talk. We’re good at what we do, just like you’re good at what you do. We want to show you how to expand on what you’re already doing and enhance your business in the process.

Schedule a Call


Tags: insurance agency resources


This content is for informational and educational purposes only and is not designed, or intended, to be applicable to any person's individual circumstances. It should not be considered as investment advice, nor does it constitute a recommendation that anyone engage in (or refrain from) a particular course of action.

This blog is intended for education and training purposes only and to support the promotion or marketing of the products, services, and/or concepts addressed in this schedule, and should not be deemed a representation of past or future results. Participating agents must adhere to all federal and state compliance and market conduct standards.