The Bridge: Winter 2015

INSURANCE INDUSTRY KNOWLEDGE FROM OAK STREET FUNDING

W I N T E R

2 0 1 5

Agency Growth Survey Results

Power Forward: Reigniting Sales Page 16

Page 4

Technology Isolation

Can too much technology be bad for sales? Page 10 1 8 6 6 - 6 2 5 - 3 8 6 3 • w w w. o a ks tr e e tf u n d i n g . c om/signup |

FEATURES

Winter Publisher Oak Street Funding Editorial Director Michelle Wilson Contributing Editors Michelle Wilson Stefanie Neer Graphic Designer Aidreen S. Hart

Really 6 What Drives Referrals?

13

Customer Success Story

Loans and line of credit help agency execute succession

16

18

Power Forward?

How one simple change can reignite sales

Bright Outlook

Agency borrowing looks to be positive in 2015

The Bridge is a newsletter produced by: Oak Street Funding 11350 N. Meridian Street Suite 600 Carmel, Indiana 46032 866-625-3863

Potential borrowers are responsible for their own due diligence on acquisitions. Loans and lines of credit subject to approval. California residents: Loans made pursuant to a Department of Corporations California Finance Lenders License. The materials in this paper are for informational purposes only. They are not offered as and do not constitute an offer for a loan, professional or legal advice or legal opinion and should not be used as a substitute for obtaining professional or legal advice. The use of this paper, including sending an email, voice mail or any other communication to Oak Street, does not create a relationship of any kind between you and Oak Street.

Š 2015 by Oak Street Funding LLC. All rights reserved. Any duplication without prior written permission is strictly prohibited.

Share Your Thoughts If you have any questions, comments or ideas for The Bridge, let us know. Email us at osf@oakstreetfunding.com.

2 | w w w.oakstreetfundin g . co m / s ig nu p • 8 6 6 - 6 2 5 - 3 8 6 3

www.oakstreetfunding.com

LETTER FROM THE FOUNDER/CEO

Commit to Excellence ACHIEVE IN 2015

Satisfied employees and customers are the lifeblood of any successful company.

This sentiment was expressed in a survey Oak Street recently conducted in which we asked agencies to tell us about their growth efforts, results and challenges (see excerpts from the results in this edition). One of the take-aways from the survey

Don't miss our next issue of

was that most agencies believe strong customer service and staffing can contribute greatly to the growth of an organization.

I agree wholeheartedly as we just finished a second consecutive record year of originations at Oak Street Funding. I don’t share that great news to boast. Rather, I say it proudly because we have a great team of people and a customer focus that made it happen. Our goal is to exceed the expectations of both our employees and our customers and place both at the forefront of our planning, decision making, and

Call or visit our website to sign up or renew your subscription today!

execution of daily tasks.

We have always believed hiring the right people is the first step to success. A natural by-product of having the right team and maintaining a strong culture is an exceptional

oakstreetfunding.com/signup 1-866-OAK-FUND

level of customer service. And as a result of this focus, our Net Promoter Score (NPS), which is a widely accepted standard for measuring customer satisfaction, consistently ranks well above the top scores in the nation. What’s more, employee opinions about working for the company have earned Oak Street the honor of Best Places to Work in Indiana for two consecutive years (2013 and 2014).

Growing a business is challenging—there’s no doubt about that —and I’m sure any agent who is charged with increasing sales and any owner who strives to build an agency understands this very well. Discovering new and better ways to sell, provide service and manage operations is critical to continual growth. We hope you find information in this edition of The Bridge to help you improve your agency and reach your 2015 goals.

Oak Street Funding Vision Statement Oak Street Funding utilizes industry knowledge, well-developed technology and passion to deliver best-in-class service and capital products to insurance and finance professionals nationwide. Our customer-focused mind-set and access to capital will allow us to continue to fulfill customer needs, identify growth opportunities and provide an empowering work environment for employees.

8 6 6 - 6 2 5 - 3 8 6 3 • w w w. o a ks tr e e tf u n d i n g . c om/signup | 3

You Spoke.

We Listened.

Agency survey growth trends

I

nsurance agency owners continually strive to grow their businesses and are challenged with developing the most effective growth strategies possible. Oak Street Funding conducted a survey to learn about these challenges and share information to help agency owners understand the current landscape of agency growth. Here are highlights from the responses of 200 agents who participated in the survey.

4 | w w w.oakstreetfundin g . co m / s ig nu p • 8 6 6 - 6 2 5 - 3 8 6 3

Who Responded

• Nearly 68 percent of all respondents have been in business for nine or more years. 70 percent operate an independent agency with the remaining 30 percent being captive.

How Agencies Have Grown

• Roughly half of all respondents grew by 10 percent or more over the last two years, while approximately 15 percent grew by less than 2 percent.

• 61 percent of all agencies just met their goals or didn’t meet their goals over the last two years. 8.59 percent said they greatly exceeded their growth goals.

Survey respondents

70% 30%

• More independent agencies reported greater growth than captives.

1-3

• Of all the major factors that typically contribute to agency growth, customer service was most frequently identified as one that greatly contributes, followed by sales efforts and then referral programs. A social media presence and carrier marketing/ advertising were identified most frequently as factors that contributed little towards success.

9-15

Preferred method for growth

What Are Growth Strategies

• It’s likely no surprise that almost all agents desire to grow to increase revenue and profits. 65 percent were also motivated to position their agency for a potential sale or succession.

• As agency owners face the challenges of business ownership, nearly 85 percent say staffing resources pose difficult to very difficult challenges and 61 percent say time resources pose the same level of difficulty. The other top challenges identified were carrier changes and adequate leads.

See MORE data and comparisons based on independent versus captive, younger versus older agencies and higher versus lower growth agencies.

oakstreetfunding.com/growthsurvey SURVEY METHODOLOGY: In October of 2014, Oak Street Funding sent an online survey via email to over 20,000 insurance agency owners throughout the United States. The names were randomly selected from Oak Street’s database and the results presented are from 200 professionals who responded to the survey.

4-8

16+

• Tied closely to results agents reported, agents believe that sales efforts, customer service and referral programs can have a strong impact on growth. More than a quarter of respondents believe carrier marketing/advertising, social media presence and office location can have little to no impact on growth.

• A small portion of agents — 4.47 percent — preferred growing via acquisition strategies. 52 percent preferred growing using a combination of organic and acquisition strategies, while 43 percent favored organic growth.

captive

# years in business

What Contributes to Growth

• In terms of organic growth, the two strategies that were believed to be the most effective were hiring a producer and initiating marketing strategies. 46 percent believed agency technology enhancements could also be effective.

independent

Organic: Acquisition:

Combination

43.02% 4.47% 52.51%

Agencies that grew 15% or more

37% 26%

independent

captive

8 6 6 - 6 2 5 - 3 8 6 3 • w w w. o a ks tr e e tf u n d i n g . c om/signup | 5

What Really Drives Referrals?

How to Double or Triple Your Referrals Next Year | by Michael Jans

Would you like to know how to double or triple your referrals this year? By developing four key components, you can see 20 to 300 percent more referrals than the previous year. Here is a summary of the concepts that can help your agency achieve the ultimate referral program. To learn more, read the full article at oakstreetfunding.com/DriveReferrals.

Component #1: Nurturing

Use some of the common tools that are available for nurturing (i.e., email, newsletters, value added education, a genuinely strong and useful web presence, authored books and account reviews). Although you may be tempted to take an easier route and copy generic content from various marketing sources, take the extra steps to provide customized content that refers to your clients, community, agency and other interests. Customized content can make a difference.

Component #2: Program

Most referral programs include a special offer or incentive which I like to call a ‘game’ element (think of a gas card, book of free car wash coupons or Starbucks® gift card).

The incentive is the first thing the client sees. Because it’s promoted and is the most visible part of the program, agents mistakenly think the incentive is the program. But it’s not.

It’s only one part of the entire formula for the referral program. You reward the behavior you want repeated, however the key motivation for referrals should clients' approval of your business.

6 | w w w.oakstreetfundin g . co m / s ig nu p • 8 6 6 - 6 2 5 - 3 8 6 3

Component #3: Promotion

An incentive gives you the opportunity to promote your referral program. You can talk about it in conversations; include it in every outbound mailing and more. The options for promoting your program are endless, but consider incorporating some new ideas into emails, electronic newsletters, website content, articles with local publications, and flyers inserted in mailings (see the full version of this article for ideas you can incorporate).

Component #4: Persona

A human connection is one of the biggest missing elements I’ve noticed in almost all retail agency marketing.

Many large insurance carriers have created mega marketing personas that represent their companies — Progressive has quirky and perky Flo and GEICO has the charming and cute gecko. What you can glean from them is the strong impact a likeable and memorable persona can have on your business.

Carefully select the unique characteristics that will help your marketplace connect with you and build your persona based on who you really are.

About the author Michael Jans is the President of Agency Revolution (www.agencyrevolution.com). He has written and created over 50 books, programs and courses to help insurance agencies grow. In the past 20 years Michael has trained and consulted with over 11,000 insurance clients in five continents.

What will it take to grow?

If you choose to take on debt to implement growth initiatives, how will you achieve the right balance between that debt and available liquidity? Oak Street Funding answers this frequently asked question.

For businesses that consider or choose to take on debt to implement growth initiatives, achieving the right balance between that debt and available liquidity (available cash or the capability of quickly converting assets to cash) is important. Maximizing a company’s return on equity requires a certain amount of debt. Oak Street appreciates the need for clients’ capital management strategies to align with their long term growth plans while minimizing potential cash flow vulnerabilities and works cooperatively with its clients to achieve these goals. In a survey, we discovered our clients were able to realize an average of 36 percent growth by the investment of borrowed monies into their agencies.1 Many agencies have recurrent thoughts about growth, but due to their day to day demands they often are not able to develop a focused plan. If you are considering borrowing to grow, you should ask yourself the following questions.

How do I want to grow?

Growing a business can mean different things to different companies. Whether businesses choose to grow by expanding products and services, tapping referrals, increasing sales and marketing efforts, hiring or through acquisitions, different levels of investment are required. Begin by understanding how you plan to grow and what kind of investment is needed.

What is my growth timeline?

A young business owner may have decades to grow an organization, while an executive nearing retirement age may need to build value quickly in order to sell a business. For executives with short timelines, growth via acquisitions may be the best strategy. Your

goals and timeframes will help determine your timeline.

Are opportunities favorable now?

Timing is always important.

For example, during times when a soft market is ending and revenue streams are weak, acquisitions can be relatively cheap. Business owners should always be ready to take advantage of a favorable opportunity.

A line of credit can help you be ready when the time is right. Position your business to move quickly by getting approval before opportunities present themselves.

How do I feel about risk?

Everyone has a different tolerance for risk. Some view debt as a risk, preferring slow and steady growth through utilizing cash versus debt.

Others consider organic growth a risk, since the slower pace may result in competitive pressures.

Balance these views with your growth plans and timeline to come to an acceptable level of risk.

1

Data as of April 30, 2013, for entire portfolio of loans. Average timeframe of 28 months.

Individual loan results may vary and revenue growth is not guaranteed. Some loans were used for multiple purposes so percentages may reflect growth rates based on a weighted average achieved in combination with other loan purposes.

8 6 6 - 6 2 5 - 3 8 6 3 • w w w. o a ks tr e e tf u n d i n g . c om/signup | 7

:industry news

As the insurance market goes direct and digital, agents must adjust An Accenture survey of more than 1,100 independent P&C agents showed changing consumer behavior and new technologies may mean significant shifts for insurance agents. 39 percent of respondents believe their greatest competitive threat is from direct insurance channels. The biggest components of those threats are online services, claims processing and quoting. In order to adjust to the changing market, agents will have to adopt new technologies, take advantage of customer and prospect data and find better ways to reach their target audience. ď ľ

Google enters auto insurance space

8 | w w w.oakstreetfundin g . co m / s ig nu p • 8 6 6 - 6 2 5 - 3 8 6 3

Just when you think change may level off, something disruptive occurs. With an auto insurance shopping site already active in the U.K. for two years, Google now has its eyes on opening a site in the U.S. The company has struck a deal with CompareNow.com that will give it access to a network that includes approximately 30 insurers. In order to combat the competition, independent agents are being advised to make stronger efforts to demonstrate their value. ď ś

Look for more insurance apps from IBM and Apple partnership Apple and IBM announced a new partnership in 2014 that would strive to combine Apple’s proven business-to-consumer user experience and IBM’s enterprise expertise. This partnership may touch the insurance industry through the development of new, innovative apps. A retention app that addresses mobility and analytics was recently announced and more technologies are on the horizon. 

Reinsurance with captives may be reason for increased economic risks Insurance companies that utilize captive insurance providers to reinsure their life insurance portfolio risk are being partially blamed for increased risks to the United States’ stability. The OFR, a division of the Treasury Department, released a report as part of a measure to pinpoint risks to the economy. It cited that reinsurance with captives as an example of moving financial activities toward weaker areas of the financial system. 

The evolution of an agency Managing and growing a business at the same time is challenging. In order acquire new clients and increase sales, agents must be able to focus on the right strategies. But with the responsibilities of running the back-end operations, growth tactics are often neglected. See the evolution of managing a practice and how new ideas are freeing producers to do what they do best — sell. 

Who is to blame for the gap in life insurance coverage?

Statistics show there is a growing gap between the amount of life insurance coverage consumers need and the amount of coverage they actually purchase. One insurance professional believes carriers are to blame because of their push to sell policies online without the personal, consultative help a face-to-face interaction with an agent provides. Carriers, on the other hand, point the finger at agents whom they say don’t sell enough coverage. 

 www.marketwatch.com/story/independent-insurance-agents-not-immune-to-digital-disruption-according-to-accenture-report-2015-01-06  bits.blogs.nytimes.com/2015/01/08/new-clues-on-googles-plans-for-insurance/?_r=2  www.insurancetech.com/channels/ibm-apple-partnership-could-yield-trove-of-insurance-apps/d/d-id/1318372  insurancenewsnet.com/innarticle/2014/12/03/insurance-captives-threaten-financial-stability-report-says-a-575794.html#.VLC1PSvF-mE  www.lifehealthpro.com/2014/12/31/2015-outlook-what-the-future-of-practice-managemen?t=life-sales-strategies  insurancenewsnet.com/innarticle/2014/12/12/whom-to-blame-for-the-coverage-gap-a-578092.html#.VLCzDSvF-mE 8 6 6 - 6 2 5 - 3 8 6 3 • w w w. o a ks tr e e tf u n d i n g . c om/signup | 9

Can too much technology be bad for sales? echnology has transformed the lives of people across the globe over the last five years. The introduction of the smart phone placed what are essentially small computers right in our pockets – available we want them to conduct financial transactions, check calendars, send emails, search the internet and more. They have changed sales processes and sped up sales cycles. They’ve complicated and simplified things all at once. Other technological advancements, like cloud computing and software-as-a-service, have also contributed to major changes.

T

10 | w ww.oakstreetfund in g . co m / s ig nu p • 8 6 6 - 6 2 5 - 3 8 6 3

But as much as technology helps us in our personal and professional lives, it can hurt us too. Parents complain their kids don’t know how to communicate as well as they should because they text too much and ‘old-schoolers’ wrestle with people who never seem to want to pick up a phone and just talk. The convenience of technology versus the cons is a debate that could go on forever. The truth is technology can impact insurance agents in ways they may not realize.

More and more agents take advantage of the many benefits technology provides. They communicate with clients via email on a regular basis instead of making phone calls and face-toface visits, send questionnaires to capture information for life insurance quotes, and connect with clients on Facebook or other social media outlets.

Insurance providers are also leveraging opportunities in the digital world as they work to direct consumers to online resources when they need insurance coverage. Much like the diamond industry has convinced many buyers that an engagement ring is worthy of two months’ salary, insurance companies are working to change consumer thinking. Instead of seeking the guidance and services of an insurance agent, a lot of advertising directs buyers to the internet to search for the best rates. A recent press release even touted that online insurance quotes are better than phone quotes (http://www.pressreleaserocket.net/onlinecar-insurance-quotes-are-better-than-phone-quotes/23550).

But the insurance business truly is a people business. And while there is some insight we can gain about people via social channels, nothing can replace the depth, breadth and quality of information we can gain from voice or face-to-face interactions with clients — ‘real contact’ with people. Too much dependence on digital communications can cause agents to miss out on the ability to sell consultatively and be viewed as a resource by current and potential clients.

Real contact provides opportunities for agents to learn about the current and future needs of people and to share what they know about insurance and its potential impact on financial security. The more real contact agents have with people, the better those people can come to value agents and the products and services they provide.

Find teachable moments

Real contact offers teachable moments with people. When you watch for and respond to teachable moments with your clients, you begin to shift your role. Instead of being seen primarily as someone who is trying to sell them something they may or may not actually want, you become a trusted advisor who has a genuine interest in their well-being. (Yes, you may feel that you are already in that role, but there’s probably a gap between your belief and their perceptions.)

Today, we have access to more information than ever before.

We can get more answers in five minutes with Google than we could gather in two hours with an old-fashioned encyclopedia.

But instead of feeling more knowledgeable, many people are becoming overwhelmed by information they’re not certain they can trust. You can help by providing information that is both helpful and relevant to them.

Increase talk time

In efforts to increase efficiency for the agency, save the client time and provide quick feedback, we utilize technology for common tasks. We actually encourage the use of it and expect more and more people to demand it. After all, people claim to be busier than ever in our culture today and offering modern conveniences seems to be the right thing to do. As a result, we shift interactions to the digital world. So when a client calls with a question or a concern, our natural inclination is to resolve it as quickly as we can, saving the person time and moving on to the next call. However, the immediate answer isn’t always the best answer for the client and rushing off the phone isn’t necessarily the best tactic. Taking the time to ask a question or two can go a long way. By engaging in conversation and probing a little, questions can uncover information that will give you an opportunity to better serve the client. For example, a policy holder who is doing some room renovations may call to see if you have referrals for licensed contractors who do the work. By taking a little time to ask about renovation plans, you may discover the homeowner is significantly adding to the home’s value and needs an upgrade in coverage.

The second benefit is that the conversation you have with the client builds rapport. Instead of simply being a service provider who offers a quick answer to a question, you’ll demonstrate a genuine interest in something that’s important to the client.

Having a strong rapport with your clients also helps with retention. When clients are comfortable working with you and see you as more than just another agent, they’re less likely to react to a premium increase or a problem with a claim by simply switching to another carrier. They may not be happy, but they’ll be more likely to share their dissatisfaction with you, so you can take steps to help. (And sometimes, simply listening to their complaint may solve the immediate problem.)

Share when you’re not selling

You probably read financial publications and newspaper articles regularly. When you encounter an article that might interest a client, either forward the email or make a copy of the article and drop it in the mail with a short handwritten note saying, “Thought this might interest you.” That may seem like a very small effort, but you’ll be surprised at the impact it can have.

If you use social media or a client newsletter as part of your marketing efforts, you can share useful information without a strong sales pitch. Suppose you find a great article online about things people forget when planning for retirement. You might report that on your social media page with a message that says something like, “I was surprised by what I learned in this article” or “Here’s something you may not have considered about your retirement.”

Once your clients become comfortable turning to you for impartial advice and useful information, they’ll start to do so more often … and they’ll trust your recommendations. Take a lesson from those veteran agents who describe their clients as friends. That’s exactly how they treat them, and you’ll see it in the loyalty and longevity of those clients.

8 6 6 - 6 2 5 - 3 8 6 3 • w w w. o a ks tr e e tf u n d i n g . c o m/signup | 11

5 simple and inexpensive

ways to market your agency You don’t always need an extensive or complicated plan in order to executive marketing activities for your agency. Marketing tactics need to do two major things: help attract new customers and help you maintain existing ones. Here are five simple things you can do to market your agency that don’t require a lot of time, money or expertise. .

1.

Increase daily contacts.

You can count on a certain number of client calls every day for a variety of reasons. They’ve traded in one car for another. They don’t remember when their premium is due. Their daughter just passed her driving test. Each of these calls is an opportunity to talk, ask questions and identify other potential needs. The big question here is, “How often do you call them?” Why wait for the phone to ring when you can create even more opportunities by making conversations happen. This may sound too basic, but it’s often neglected. Even if you just leave a message, you’ve touched a client and planted a seed. You’ve made them aware that you’re still in business, still their agent and still care. That will go a long way. And if you divide your entire client list, you may be able to reach every household each quarter, year or other timeframe just by making a few calls each day.

2.

Use your data.

Comb through your data and find ways to identify needs and opportunities

based on common characteristics.

Clients within the same age band, for example, are likely to be in the same stage of life. Forty-somethings typically have teenagers who are getting ready to drive and will need insurance. Teenagers will need renter’s insurance when they head off to college, whether they live in an apartment or dorm. Once these groups have been identified, you can develop simple call scripts, emails or other communications to reach out to them.

They’ll appreciate you helping them ensure their needs are met.

3.

Send a printed newsletter or letter.

With software like Microsoft Word, it’s easy to develop a letter or newsletter you can mail to a large group of clients (if you follow the point above about data, you can create a few versions based on groups of clients).

Come up with three or four main points that are relevant and informative and write a short paragraph for each. You don’t need to be clever or provide a lot of fancy graphics, just focus on what’s in it for the client and how you can help them. Share success stories or testimonials from clients you’ve helped. Always include a call-to-action for them to contact you or go to your website to get a quote or find helpful information.

12 | w ww.oakstreetfund in g . co m / s ig nu p • 8 6 6 - 6 2 5 - 3 8 6 3

4.

Give a promotional product.

People are guilty of procrastinating or just getting busy. As a result, addressing insurance needs is often pushed to the backburner or altogether forgotten.

Sometimes it helps when people have a visual reminder. Consider sending your clients and prospects a magnet for their refrigerator or some other small but fun product that will keep your name in front of them. Just make sure there’s something about the product — whether it's a catchy phrase or unique design —that will make them want to keep it. You can spend as little as one dollar to purchase something that may be very effective.

5.

Provide inexpensive incentives.

Sometimes a small incentive is enough to get people’s attention and influence them to take action. Consider providing $5 or $10 gift cards for every quote you receive or request to evaluate current coverage. Alternatively, you can enter names in a drawing for a more substantial giveaway, like a $500 gift card or a computer tablet. Test a few options to determine what motivates people to respond to different promotions.

Customer Success Story

Loan and line of credit help execute succession, acquisition plan The Company

Sawicki Insurance Agency was established in 1973 by Joseph Sawicki to provide insurance to the greater Hartford area in Connecticut. As the founder of the independent agency, Joseph successfully grew the agency for over 30 years. In 2005, he ushered his son Josh into the company as the beginning stages of a succession plan. Josh, who’d previously worked in public accounting in various roles for several years, cast a new vision to grow through a primary focus on acquisitions.

Now called SEK Holdings, the company is a family of several agencies in Connecticut, Florida, Texas and California that offers personal, commercial, health and life insurance. The father and son are majority owners of the company with two additional minority owners who serve key roles.

The Strategy

Josh’s acquisition model has been to acquire agencies in a given region that have strengths complementary to the original Sawicki agency. One business, for example, provides marketing capabilities while another contributes solid sales and talent recruitment experience. Josh has been selective about his acquisitions, being careful to only purchase businesses that offer the right fit, profitability and potential.

Armed with greater functionality, Josh has positioned the company to acquire books of business that can be consolidated into one organization, thereby increasing operating efficiencies.

Overall, SEK has grown by more than 700 percent. What’s more, the legacy started by Joseph three decades ago is positioned to continue for years to come. In all, Sawicki has acquired more than ten agencies with financing from Oak Street.

The Oak Street® Experience

Josh turned to Oak Street for his first acquisition and was pleased with not only the results of his purchase, but also his experience obtaining the needed capital. As a result, he requested more capital in order to pursue the purchase of additional books of business. The line of credit Josh secured allows him to have the speed and agility of a cash buyer, often giving him a tremendous advantage over other buyers who are interested in the same deals.

Quote

“I’ve worked with Oak Street for more than five years and they are really good. Without them, I wouldn’t be able to accomplish all that I have for this business. They truly understand the insurance agency business and acquisitions, which makes working with them simple. I’ve worked with the loan, underwriting and processing teams and my experiences have been pretty much the same each time. They are all very consistent. The line of credit Oak Street extended me is unique and I don’t think I would’ve been able to secure it with any other lender. I wouldn’t be able to make acquisitions as quickly as I can without it and it’s been instrumental in helping us grow.”

8 6 6 - 6 2 5 - 3 8 6 3 • w w w. o a ks tr e e tf u n d i n g . c o m/signup | 13

:around the web Webinars On-Demand | Learn from the experts without leaving your office. Oak Street Funding offers resources to help agents and brokers.

Our monthly webinars, conducted by subject matter experts, provide insight on a number of hot topics. If you miss one, access it on our website or our YouTube channel. Here are some of our most popular webinars.

Capital Options for Insurance Businesses An audience-driven panel discussion that addresses common questions insurance business owners have about fulfilling their unique capital needs.

learn six essential steps to differentiate your agency from competitors. This webinar can help anyone in your firm responsible for building and maintaining relationships

Best Practices for Growing Insurance Businesses Keys to building a thriving insurance agency. This webinar touches on everything from organic and acquisition growth strategies, to internal processes and culture, to financial management.

What’s Your Level of EQ? EQ deals with our emotional intelligence — our ability to recognize our own and others’ feelings and use that awareness to positively impact relationships. Discover what your EQ is and how it may be impacting your professional life.

The Ins & Outs of Internal Succession Key factors to keep in mind when considering a succession plan. Learn about typical challenges that are encountered in an internal succession, what happens when multiple owners are involved, and how you can avoid common pitfalls.

Enhancing Your Customers’ Experience Discover how to analyze and shape your customers’ experiences with your agency as you

14 | w ww.oakstreetfund in g . co m / s ig nu p • 8 6 6 - 6 2 5 - 3 8 6 3

How to Get ROI Out of Your Marketing Efforts This webinar discusses common mistakes business owners make in marketing, how to make marketing a profit center and not a cost center, and how to build a foundation of sales and marketing alignment.

Customized Loans

• $25,000-$20,000,000 • Terms up to 12 years • Interest-only options

A Grow gency th Tr Dow e n load nds Resu th l

ts of e a Re S cent urv oaks tree ey at tfun din grow thsu g.com/ rvey

Taking You Where Banks Won’t. ®

Where can you take your agency with extra capital?

Position to sell? Acquire an agency? Enhance customer service? Tighten up operations? Expand to new markets?

No matter where you’re taking your business, Oak Street can help with a customized loan that leverages your commission stream. Since 2003, thousands of agents have accessed capital to grow, acquire and succeed with an Oak Street loan or line of credit. Call us or get a quote

Uses of Capital • • • • • •

Acquire an agency or book Consolidate business debt Get working capital Buyout ownership/Succession Invest in business growth Recapitalize

oakstreetfunding.com/quote.

1-866-OAK FUND | oakstreetfunding.com 8 6 6 - 6 2 5 - 3 8 6 3 • w w w. o a ks tr e e tf u n d i n g . c o m/signup | 15

How one simple change can reignite sales

B

Basketball superstars attract great crowds. The rare talents who can score over 30 points in a professional game, accomplish a triple-double or perform nearly impossible maneuvers are captivating. But superstars aren’t necessary to win games. In fact, teams that master basketball fundamentals and develop well-rounded rosters sell out stadiums. When each player knows his or her role and plays it with precision, teams succeed. This is especially true with point guards and shooting guards.

Point guards are typically good ball handlers and passers.

Their primary role is to get the basketball up the court and get the offense initiated. Point guards will occasionally take shots, but most often pass the ball to shooting guards. Shooting guards, on the other hand, take shots — usually a lot of shots.

Their goal is to score points.

Often in sales, leaders hope to recruit superstars who can close a large number of deals. They hire someone with proven experience or potential and expect great results. But that’s not always the best approach and it’s certainly not the only approach.

Agency owners and managers should consider building a sales organization that is staffed with professionals that are akin to point guards (pointers) and shooting guards (shooters).

Pointers are employees who are skilled at the first stage of the sales process. They work to make contacts with leads and turn them into real opportunities. They are good about making initial contact with people, identifying needs, and setting up appointments. Once they establish that a contact is interested in their product or service, they have no problem passing that contact’s information along to the next person or stage of the process. Shooters take hand-offs from point guards. They cultivate relationships, drill down to really understand needs, craft solutions that will meet those needs, negotiate and attempt to close sales. Hopefully, they experience a decent success rate.

Both positions are important to the process, but each requires a slightly different skill set and level of experience.

Because shooters have to fully grasp the potential client’s challenge and develop an appropriate solution, they need to be more seasoned in selling and closing. Pointers have to be skilled at making connections with people and convincing them to go further in the process to learn more. Pointers should also be persistent and okay with not being the

16 | w ww.oakstreetfund in g . co m / s ig nu p • 8 6 6 - 6 2 5 - 3 8 6 3

| by Bill Nicholson

person who will actually close the deal.

This type of model can be helpful not only because it can be very effective in selling, but also because it helps businesses save on personnel costs and helps develop talent.

Pointers will typically command lower rates as they are likely to be more junior level employees. What’s more, their role allows them to grow and learn over time so eventually they may be groomed and ready to take on a shooter position. The close contact maintained between pointers and shooters allow the pointers to be mentored over time. And since training to be an insurance agent can be a long learning process, pointers can make great contributions to sales early in the training process and increasingly as they learn, versus making a significant impact after several months or even years.

If your agency is like thousands of others in the industry, struggling to find, develop, and afford new talent, consider this sales model.

About the author Bill Nicholson is Executive Director of Sales for Oak Street Funding.

With experience overseeing the close of millions in insurance industry loans, Bill truly understands the unique complexities of the insurance agency business model and its unique capital needs. For more than 15 years, he has successfully led sales organizations in highly competitive environments and developed growth strategies for financial service companies. He can be reached at bill.nicholson@oakstreetfunding.com.

act t n o c e s o l The c etween b d e n i a t n mai ters o o h s d n a pointers s to be since r e t n i o p e allow th over time. And mentored an insurance be training tobe a long learning agent can ters can make oin process, p ributions to sales great cont raining process, et early in thaking a significant r versus m r several months o e impact aft . even years

8 6 6 - 6 2 5 - 3 8 6 3 • w w w. o a ks tr e e tf u n d i n g . c o m/signup | 17

Bright Outlook

18 | w ww.oakstreetfund in g . co m / s ig nu p • 8 6 6 - 6 2 5 - 3 8 6 3

Several years after the financial crisis of 2008, is the U.S. economy finally stable? Can agencies have enough confidence to expand operations, hire staff, upgrade technology, initiate new referral programs and invest in other growth strategies? | by Rick Dennen If you’re an agency owner considering funding options for growth, 2015 should be a good year in which credit is available to borrow capital and conditions are positive for new commercial loans, working capital or refinancing.

•M arket conditions.

Some products in the insurance industry, like commercial lines, are softening while others are growing at a slower pace.

•C redit standards.

According to the October 2014 Senior Loan Officer Opinion Survey on Bank Lending Practices published by the Federal Reserve System, a modest number of banks have eased their commercial and industrial loan standards to firms of all sizes and a larger number have eased pricing. Banks also reported stronger demand for commercial and industrial loans to larger firms. (www. federalreserve.gov/BoardDocs/ snloansurvey/201411) • Interest rates.

If any increases are made by the Federal Reserve in 2015, they are likely to occur in the fourth quarter or in early 2016 and be small. This should keep capital affordable.

•T he economy.

The pace of economic growth should continue along with improvements in unemployment.

•B usiness confidence.

The majority of small business owners are confident that the economy will improve over the next

year (Spring 2014 Bank of America Small Business Owner Report).

Knowing where to find the right credit is important. There are more options today and choosing the right source can significantly increase the probability of closing on the needed capital. A large, prominent bank in the U.S. recently ended its insurance lending practice, revealing issues larger banks have historically had with collateralizing commissions and other types of future cash flow. Larger banks haven’t traditionally favored providing loans to insurance agents and brokers and this trend will probably continue in 2015. What’s more, bank regulators still have to follow significant regulations (because of financial crisis in 2008) regarding business loans.

Capital minimums and liquidity limitations require banks to have more cash available for emergencies. As a result, bank credit is often extended primarily to larger businesses with tangible assets.

Niche lenders like Oak Street Funding should continue to be a viable source of funds for insurance businesses of all sizes. While niche lenders are just as risk averse as other lenders, they aren’t bound by all the same regulations as banks and credit unions. Agencies that may typically be ineligible for a traditional bank loan (because banks won’t leverage their tangible assets) often get the funds they need from niche lenders at competitive rates.

the State of Indiana. In addition, he is an adjunct professor of Venture Capital and Entrepreneurial Finance at the Indiana University Kelly School of Business. He can be reached at rick.dennen@oakstreetfunding.com.

About the author Rick Dennen is President and CEO of Oak Street Funding, which provides commissionbased lending for insurance agents that need capital to buy, build or sell their agency.

Dennen is a licensed agent in the state of Indiana for Life, Accident & Health products and a licensed Certified Public Accountant in 8 6 6 - 6 2 5 - 3 8 6 3 • w w w. o a ks tr e e tf u n d i n g . c o m/signup | 19

Presorted STD U.S. Postage PAID Indianapolis, Indiana Permit #9555

11350 N. Meridian Street, Suite 600 Carmel, Indiana 46032

www.osfagencyexchange.com

Buy an Agency.

Sell an agency.

Oak Street’s FREE Agency Exchange service connects insurance agency buyers and sellers across the country.

• List an agency to sell • Search agencies to buy • Receive email alerts