Agencies and the Art of Upselling: “Do You Want Fries With That?”, Part 1

Agencies and the Art of Upselling

Every time I walk into a fast food restaurant, whether it be for a cup of coffee, a salad, or a box of donuts to bring to someone’s house, I always pay particular attention to the server to see just how hard they will try to upsell, or cross sell, a bigger, better, tastier, or hotter food than what I placed an order for.

Why is that? Because I can learn from these large nationwide chains new and innovative ways to ask the very simple question of, “What else can I sell you today that will make myself and the company that I am employed with more money?”

How important is this? Well, for many agencies out there, the emphasis has long been on obtaining new business, and not as focused on protecting what is already in house. I speak with agencies on a daily basis. Based on these sources, I have gathered a few statistics.

1) Most experts agree that it costs 4 to 6 times more to acquire a new customer, than to retain an existing one

2) Marketing to existing customers is 5 to 8 times less expensive than marketing to new ones

3) 65% of a company’s new business comes from existing customers

4) Repeat customers spend on average 67% more than new ones

Because it costs so much more to acquire a new customer than it does to sell to an existing customer, you are much better off spending your marketing dollars on those who you know, rather than on complete strangers. Armed with these and other facts, I am not at all saying that you should not continue to obtain new business, but it makes perfect sense for an agency to find new and innovative ways to increase their effort on retaining existing business, and increase the portfolio of their current clients…something that many agencies don’t take advantage of.


Increase the Value of Your Agency, Part 2

Increase the Value of your AgencyThe ability to grow and add value to an agency is only useful in the long run if it is sustainable.  Maintaining value requires taking a deeper look at some of the important KPIs that affect the overall health of an agency. EZLynx Agency Pulse puts these metrics and more at your fingertips each month for a quick agency check-up. We’ll look at three proven indicators that we have seen as most important to sustained stability in an independent insurance agency.

1. Balancing revenue segments – Revenue is vital to any business and diversifying these segments helps provide long-term stability. As we know, personal lines are becoming ever more competitive and frequently see a high level of churn. Balancing this out by increasing the segment of commercial policies and other segments helps provide long-term revenue stability. Most personal lines agencies should aim for a PL/CL ratio around 60:40 for ideal revenue segmentation.

2. Carrier Distribution – The fluctuations of carrier rates are common place. Many producers go with a gut feeling about which carriers are hot at any given time. The truth is that they all will eventually have rate increases and decreases. Like investing in the stock market, the best way to manage risk is to diversify your assets. Managing the percent premium volume with each of your carriers will provide greater long-term revenue sustainability. Try aiming for a distribution with no more than 20 to 25 percent of your premium volume with any one carrier.

3. Revenue Per Customer – This is an interesting metric because, financially speaking, increasing this average is a good thing; however, if you are depending on one or two large accounts to bring it up, it can be fiscally risky. To mitigate these two alternatives, focus on balancing this with the policies per customer indicator mentioned previously. Our current customers average 1.6 policies per customer, and captive agents achieve upwards of 5. In a typical independent agency, it is not unreasonable to aim for a policy per customer number at three or above. Higher numbers correlate to a stable balance of revenue among your customers and an increase in the average customer life-time value to the agency.

Another major factor in keeping these metrics stable is to establish process and routines. According to leading neuroscientists, more than 40 percent of what we do in life and business is based on habits2. Creating specific procedural habits in your agency helps maintain consistency and efficiency. Setting specific processes for managing new business, cross selling mono-line policies, working renewals, handling policy change requests, etc. can make a huge impact in the sustained growth of an agency.  Each customer interaction provides an opportunity to build customer loyalty and reinforce the agency’s unique value proposition. Setting process expectations for producers and CSRs in your agency will help this to become second nature and keep your staff from missing opportunities to reinforce the relationship with each customer.

EZLynx offers turn-key business solutions to help any agency grow reach its goals like the Agency Pulse, which puts agency KPIs at your fingertips.  EZLynx offers products to help make your job easier, so you can get back to what really matters!

(2015). 2014 insurance agency transaction multiples. The Deal Maker’s Dialogue, 6(2).


Powerful Business Performance Insights

EZLynx Agency PulseEZLynx® Agency Pulse™ is a one-of-a-kind monthly report that delivers enhanced business performance insights to insurance agencies.

This monthly agency report aggregates data from EZLynx Rating Engine and EZLynx Management System into actionable business intelligence that helps agency owners and administrators manage their businesses more profitably and efficiently.

The EZLynx Agency Pulse report provides agencies key metrics and trend analysis of your insurance agency’s monthly performance, derived directly from your EZLynx data to make targeted, educated business and marketing decisions.  EZLynx, with an all-in-one platform that has both a comparative rater and a full-featured agency management system, is uniquely positioned to provide rich, multi-dimensional agency reports that are unavailable in any other system.

This powerful agency trend report uses all of the robust quoting and policy data found in EZLynx Rating Engine and EZLynx Management System to deliver eye-opening performance metrics. With so much customer data locked away in outdated agency management systems, agency owners have been desperate for the kind of actionable agency analytics that is provided in the EZLynx Agency Pulse report.

Agency Pulse - SnapshotAutomatically generated each month with both Agency Snapshot and Detailed Information sections, the EZLynx Agency Pulse report delivers performance data in an easy-to-view report that has been designed to provide key performance information based on a collaboration between EZLynx and a team of agency owners. Actionable metrics that help reveal opportunities for growth and increased profitability include statistics and trends on close ratios, retention, clients, carriers, and premium.  More importantly, agency owners can see their month-over-month trends at a glance, making it much easier to track strategic objectives and priorities.

We checked in with one of our users to find out what their experience has been. “EZLynx Agency Pulse has illuminated the business performance of my agency in ways that would have never been possible on our legacy management system,” said Brian Burns, Owner at Compass Insurance Group LLC in Colorado. “Because EZLynx is a tightly integrated comparative rater and agency management system on One Platform™, they are able to build amazing reports that can’t be found in any other system.  That, combined with the quarterly website performance meeting that is part of EZLynx Agency Websites, we have been able to make strategic marketing decisions based these reports from EZLynx and then actually track the results each month to gauge the successes or failures of our efforts.”

EZLynx Agency Pulse is available today for customers of EZLynx Management System at no additional cost.  EZLynx automatically sends out Agency Pulse each month to all agency owners with an EZLynx Management System account.


EZLynx Named Finalist in the 2015 ACORD Insurance Innovation Challenge

As part of their 2015 ACORD Insurance Innovation Challenge later this year, ACORD® will crown the company that has best used technology to transform the way we think about insurance.

Selected from more than 100 overall submissions, 48 entrants made the first cut and garnered the opportunity to compete for the finalist positions during a live-pitch day at the ACORD office in Pearl River, New York. During the pitch day, Brenna Johnson, Business Analyst at EZLynx, discussed EZLynx Retention Center and how it is transforming the way agents think about customer retention.

As the first insurance-specific innovation competition, the ACORD Insurance Innovation Challenge brought together a panel of judges comprised of insurance industry analysts, entrepreneurs and thought leaders to see presentations, provide feedback, and ultimately grade the pitches based on impact, ingenuity, feasibility and applicability to the insurance industry.

EZLynx is honored to be selected as a finalist and to present to a panel of judges before a live audience at the ACORD2015 event later this year.


EZLynx Announces Availability of New Productivity Features

EZLynx, known for their innovative solutions in the insurance industry, announces the availability of two powerful tools to help agents increase their productivity.

EZLynx Policy Compare and Policy Sync are two tools that other management systems simply do not have,” says Jonathan Kolbo, Product Manager at EZLynx. “These features further separate EZLynx from the rest of our competitors. We wanted to help agents with the huge amount of time it takes to service customers at renewal time, and free up the independent agent’s time to focus on selling new business.”

Policy Compare makes it possible to quickly view two policies side-by-side to instantly identify the differences. This makes explaining premium changes to your customers much easier. “When a customer calls to ask ‘Why did my premium go up?’ Policy Compare lets the agent quickly compare the expired version of a policy with the renewal policy side by side,” Kolbo continues. “You can see which coverages have gone up, exactly how much, and why. This eliminates time wasted by crunching numbers, leaving agents more time to sell new business and retain existing business. When agents see how much time they will be saving with these tools versus the old way, they will be amazed.”

When an agent wants to re-quote, it is very important to use up-to-date information in the application. Policy Sync allows agents to compare and sync current policy information with EZLynx Rating Engine. Policy Sync makes the re-quote process more efficient for agents and customers.

“We are thrilled to be able to offer Policy Compare and Policy Sync at no additional cost to our customers. EZLynx Management System customers can take advantage of these powerful tools today. ”

About EZLynx

EZLynx develops industry-leading cloud-based software for the insurance industry. Their software has helped independent agents operate their businesses more effectively for over ten years.

EZLynx is proud to be the innovator of several products available on it’s ONE PLATFORM™ solution, including real-time Rating Engine, Retention Center™, Agency Pulse™, Policy Sync, eSignature and Management System.


Increase the Value of Your Agency, Part 1

Increase the Value of your AgencyAn agency’s value can be an ambiguous figure often inflated in the minds of agency owners. It is frequently overlooked as long as book size is growing. Owners who are not planning to sell usually have number in their heads, but many neglect to take the time to delve into the actual valuation. However, its value goes beyond getting a good sale price. The agency valuation can not only be used to secure financing for sudden opportunities, but, more importantly, it provides a roadmap for strategic planning and growth. Understanding an agency’s value can identify potential risks and vulnerabilities that could change its worth over time.

The first step to increasing an agency’s value is understanding its current value. A variety of factors are taken into account for establishing value including growth, profitability, and financial security. MarshBerry, an M&A advisory firm, reported that in 2014 the average Base Purchase Price increased to 7.14 times EBITDA with a range from 5.9 to 7.81. EBITDA is a widely accepted measure of profits which stands for Earnings Before Interest, Taxes, Depreciation and Amortization. By removing operating expenses from the revenue and excluding the administrative expenses, it provides an accurate picture of how an agency is performing. Whether you utilize retained commissions or agency earnings (EBITDA) as the base, the same principles for increasing value will apply.

Average Value = 7.14 x EBITDA

EBITDA = Revenue – Expenses (excluding interest, taxes, depreciation, and amortization)

If you can remember back to your basic algebra, you’ll know that to increase the value you would need to increase the EBITDA base by either increasing revenue or decreasing expenses.

Most companies find it extremely difficult to cut operating expenses, so the only other option is to increase revenue. As we all know, the two biggest factors that contribute to revenue in an insurance agency are growth from new business and reoccurring revenue from retaining customers. Here are 3 proven ways to increase your base and, more importantly, sustain that increase.

  1. New Business Growth – The need for growth in the agency, as well as with each carrier, is well known. Many agencies focus on acquiring new business as a way to drive value, but neglect to account for the cost of acquisition for each new customer. Leveraging cost effective alternatives to traditional marketing, such as email or social media, is one way to reduce expenses without risking additional new business opportunities.
  1. Agency Retention – One of the quickest ways to increase the value of EBITDA is through increasing agency retention. Reoccurring business doesn’t need to take into account acquisition costs, so the revenue drops directly to the bottom line for an agency. Even a one to two point increase across the agency as a whole can have significant ramifications on the overall value. As an independent agency, you provide significant value in the choices of carriers that you represent. Frequently, this value is not fully communicated to the insured who goes shopping at renewal rather than providing you the opportunity to save the business. Communicating with every insured at renewal provides an agency a way to discuss any changes fully manage the renewal conversation.
  1. Policies Per Customer – Adopting a specific agency wide strategy for cross selling monoline customers works to both increase your retention and the value. It is common knowledge that the number of policies per customer directly correlates with the length of time the customer remains with your agency. Utilizing email marketing to educate monoline customers on the benefits of having both home and auto policies written with the same carrier can make a large impact.

1. (2015). 2014 insurance agency transaction multiples. The Deal Maker’s Dialogue, 6(2).
2. Duhigg, Charles. (2012). The power of habit: Why we do what we do in life and business. New York: Random House.


Industry Consolidation Brings Uncertainty for Agents

A Note from the CEOAs you may already know, there were two insurance industry company acquisitions announced in the past few weeks. The two major vendors are now once again in the process of consolidating their market positions through acquisition, rather than providing superior products and services. Given the availability of easy liquidity in the market, it was rather surprising that it took so long for this buy-out fever to reach our industry.

The general rule of thumb with these kinds of acquisitions is the weak gets consumed by the strong. If you happen to be the customer of one of these acquired products, it puts you in an extremely precarious situation. You suddenly don’t know what is coming next and where the product you have come to rely on is headed. There is nothing worse to deal with in a business than uncertainty!

That Raises the Question – What about EZLynx?

EZLynx prides itself on being independent (just like you!) and out-of-the-box thinkers. We have always believed that our industry has had too many meaningless players with no long term plans, and simply put, are in it to make a fast buck. These acquisitions are good at cleaning up the industry and increasing the opportunity for the remaining players like EZLynx. In fact, we believe that our entry into the agency management system market has made such a dramatic impact on the marketplace that it has resulted in some of these acquisitions. Either way, if you happen to be our customers, you can rest easy knowing that EZLynx is in it for the long haul.

The EZLynx® Platform, which is a single system for comparative rating, management system, retention tools, and marketing tools, is a very compelling solution that most agencies are finding hard to resist. Our management system is now the third most popular system in the market and the fastest growing system in the last two years as per the latest industry survey.

Our latest groundbreaking solution for policy renewal management, EZLynx Retention Center™, is a revolutionary product that has dramatically changed how agents manage their renewals. Agents who are using this product cannot stop raving about the successes they are experiencing.

We will continue as always to bring more innovative products to market in the coming months and years. That is the fundamental difference between EZLynx and these other companies – We believe that building a superior product and putting the needs of our users first is how to win in this industry.

It is our ultimate goal to streamline and enhance every business function of an agency with our One Platform solution. We feel our industry is under attack from well-funded outsiders, and it is our responsibility to empower our agents with a suite of tools to fight this challenge.

To learn more about EZLynx Retention Center, you can watch a testimonial video from one of our users here.


Florida Carriers Flock to EZLynx

I have always had a love/hate relationship with industry trade shows. On one hand, I recognize the tremendous value in the networking opportunities that they can provide. On the other hand, because there are so many, it seems like the attendance of many of the shows has been steadily decreasing over the years.

EZLynx Trade Show Booth

This trend does not seem to be the case with the FAIA show, from which I just returned. The attendance to this show is always large and consistent. It was a big show for us, so we wanted to put in the time and effort to meet with Florida agents.

From a single platform Comparative Rating and Management System, to innovative new products and features that help agents make more money, such as EZLynx® Retention Center™, we continue to push forward with our agents-first philosophy.

As a result, we have seen some of the industry’s largest agencies leave their legacy systems and move to our One Platform solution. These migrations have been extremely effective in getting Florida home carriers onto the EZLynx platform. I was very encouraged by the number of Florida home carriers that expressed interest in moving to real-time rating so that they could play on our platform, and I am happy to announce that we have more carriers coming out by the end of the year!

We want to be a force for good in the insurance industry. We believe there is a better way to do business, and our customers will attest to that fact. I want to encourage agents to visit our corporate headquarters in the Dallas-Fort Worth area. You will truly see why we are a different animal, or should I say Lynx!

Latest Florida Carriers Added to EZLynx

  • Cabrillo Coastal
  • Cypress Property and Casualty

Florida Carriers Coming Soon

  • American Integrity
  • Universal North America
  • Heritage P&C
  • Centauri
  • Florida Peninsula
  • Bankers
  • Gulfstream

A Look at EZLynx Policy Sync & Policy Compare

EZLynx Policy Sync and CompareEvery once in a while an innovation comes along that makes what was once an arduous, time-consuming task so absurdly simple that it’s hard to believe someone didn’t think of it sooner. EZLynx Policy Compare and EZLynx Policy Sync are two such innovations, and if you use EZLynx Management System, you’ve already got them!

EZLynx Policy Compare

Our Policy Compare feature makes it easy to respond to your customers when they call with that all too familiar question, “Why did my premium go up?”

Now you can quickly compare two versions of a policy – the expired policy and the renewal – side-by-side and see which coverages went up, exactly how much, and why.

No more searching for explanations and possibly losing the confidence of your customers. Policy Sync works seamlessly for both Personal and Commercial lines, and it’s a great example of how a seemingly small feature can make a big impact on your agency’s retention numbers.

EZLynx Policy Sync

Customers often want a new quote at renewal time to see if they can get a better premium. At this point, it’s very important that your rating application is up-to-date before you attempt to remarket.

EZLynx Policy Sync makes this as easy as one-two-three. Simply locate the policy in EZLynx, which is the most current risk information, then select Sync. The system will automatically identify the differences so you can quickly update and re-quote.

Saving time with servicing tasks like these gives you more time to sell new business, which ultimately increases your agency’s success.


Auto Insurance Specialists (AIS) moves all California Comparative Quoting to EZLynx

AIS announced this week that they have changed their backend comparative quoting provider in California to EZLynx. This move completes their transition to the EZLynx® Platform for quoting in all 50 states.

Mark Casas, Senior VP at AIS, was excited about the change. “It was a huge strategic move on our part to work with a company like EZLynx. They have provided superior technology and customer support for us over the years,” he explains. “We had experience with EZLynx powering the quoting for our PoliSeek brand outside of California. When we consolidated our California and national agencies, it was clearly advantageous to go with EZLynx in all 50 states.”

EZLynx has garnered attention in the insurance industry recently, gaining recognition last year as the most popular comparative rater and fastest growing agency management system according to an IIABA and Future One joint study.

“We are proud to have one of the biggest players in the auto and home quoting market in California,” said Jaideep Jayaram, VP of Sales and Marketing at EZLynx. “Many carriers have moved from manufactured rates to real-time rating simply so they could be on our platform, and we are expecting more carriers to join our platform in California. We consider it our responsibility to bring value and technology for agents in the California market and beyond.”

About Auto Insurance Specialists LLC

AIS was founded in 1968, selling auto insurance in sunny California. In order to meet their customers’ growing demand, they have expanded their offering to include many lines of insurance, including motorcycle, classic car, boat and watercraft, motor home, recreational vehicle, homeowners, renters, condo owners, earthquake, mobile home, flood, umbrella, life, business, and more.

In 2014, they expanded their special way of shopping for insurance by combining the 50 state experience of their sister company, PoliSeek, with the legacy of AIS.

About EZLynx

EZLynx develops industry-leading cloud-based software for the insurance industry. Their software has helped independent agents operate their businesses more effectively for over ten years.

EZLynx is proud to be the innovator of several solutions available on One Platform, including Real-time Rating, Retention Center™, Agency Pulse™, Policy Sync, eSignature integration, comparative rating, and agency management system.