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The Scope of Appointment (SOA) process is a crucial aspect of Medicare marketing and sales activities designed to protect the interests of Medicare beneficiaries and ensure compliance with regulations. The SOA process is primarily associated with Medicare Advantage (Part C) and Medicare Prescription Drug Plans (Part D) but can also apply to other Medicare-related products. Here's an overview of the Medicare Scope of Appointment process:
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Tags: Online Enrollment, Medicare Advantage, Part D, Scope of Appointment, SOA
How to Scale Your Agency
What does every agent have in common? They all want to write more business, at least I hope they do.
Anyone who has been in the industry for any amount of time can tell you that increasing your production isn’t something that just happens. You have to plan and work to make it happen.
Today, I want to talk to about some key principles you will need to consider when coming up with your business plan, that will be essential to scaling your business.
I’m going to share with you the factors that the nation’s leading call centers and agencies focus on, to make sure they are running a successful business.
My hope is that by the end of this Blog you’ll have a little more insight on how you can work towards scaling your agency.
3 Factors to Consider
To start, we need to quickly go over three essential factors in any agency’s business—Cash flow, Cost per acquisition (CPA), and Lifetime value (LTV)
1. Cash flow is the net amount of cash transferring in and out of a business.
2. CPA stands for cost per acquisition. This refers to the average amount it cost for you to get a policy issued & paid.
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CPA is broken down into two sections. Media CPA and fix cost CPA.
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Media CPA is the average amount you spend on leads or marketing to acquire a sale.
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Fixed-cost CPA refers to everything else.
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For an individual agent the fixed cost part is simple, but if you plan on hiring additional agents it gets more complicated.
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How much did you have to pay that agent for the sale?
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Are you paying admin to follow up on policies or to handle phones?
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Office space, computers, dialer‘s, licensing fees, etc.
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It’s imperative that you are able to calculate your total CPA because you need to make sure it is lower than the third key factor, lifetime value or LTV.
3. LTV, or Lifetime Value, is simply the average amount of commissions you earn over the life of a policy.
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This will vary from agency to agency based on many factors. If you know your LTV and your CPA you know how much total profit you are going to make for every client you put on the books.
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An important thing to keep in mind is we are talking about “LIFETIME” value. Major companies don’t judge the profitability of their business on just what they make the first year and neither should you.
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As long as your LTV is higher than your CPA you are making profit.
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If it cost you $300 to acquire a policy and the first year the commission is only $200, it may at first glance look like a bad investment.
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But if the LTV on that policy is $1000 over the course of five years then you came out way ahead. You paid $300 to profit $700, it just took you five years to realize those profits.
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Too often I talk to agents who are hesitant to invest in their business because they are only looking at first year profit margin. You are running a business and just like any other business you are going to have to invest in it to see it grow.
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How much you want to grow the business is a personal goal, but once you know your CPA and LTV, you know exactly how much each policy is worth and from there you can figure out how many policies you need to reach your goal.
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What's Your Budget?
Now that we know how to calculate how much business it will take to reach your goals, we need to talk about your budget. Your budget is how much you have to spend on your business.
- This could be renewal commissions, savings or even a bank loan, but without a budget you won’t be able to scale your business.
- Maybe you’re an established agent who is just looking to increase your sales by a few policies a month and your budget is $200 per week.
- Maybe you’re looking to build out a 15 person call-center and your budget is $1.5 million per year.
- Whatever it is, you need to have it defined and make sure it is available to be used as needed for leads and marketing.
Managing Agents
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Once you’ve got your budget squared away it’s time to consider the management side of starting an agency. The hardest part of running an agency is managing agents and managing leads.
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Leads - Even if you’re looking to just grow your personal business this still applies, you need to make sure you have enough leads coming in that you and your agents can hit their sales goals and remain happy.
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Agents - You also need to make sure that you always have enough agents available to work the leads you are purchasing.
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Lead Management - Let’s say you decide to run a five man call-center and purchase 20 leads per day for each of your agents. You now have 100 leads coming in per day.
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What happens when two of your agents call in sick?
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Are you keeping their work days so full that they can’t absorb the extra 40 leads you purchased?
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For you individual agents, do you have a plan to pause your lead generation for times when you are out of the office?
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It’s important to plan and find a balance that keeps the agents busy with leads but doesn’t over expose your business.
Managing Leads
You also want to have procedures in place to make sure that you are getting the most out of your leads. When I say this most people’s minds immediately go to selling techniques and how to close more sales.
Often, it’s more effective to focus on solidifying the sales you are already making to reduce attrition.
If you can reduce the percentage of clients who leave you yearly from 15% down to 5% then you will most likely see more profit from that than you would by increasing your closing percentage.
Here at PSM we focus on Medicare Advantage so I’m going to use that as an example, but this will apply to any product line.
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First, align your agents with how the agency is paid. You can bonus your agents after the rapid disenrollment period is up and charge them back if a client disenrolls during that period.
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The idea is that the agent gets paid when the company gets paid, and charged back when the company does. This pushes the agent to not only write cleaner business, but also to engage in post-sale activities ensuring the business stays in force.
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Second, you also want to have sales monitoring procedures to make sure your agents are following proper procedures. Make sure they are looking up doctors and drugs on every presentation. Make sure they are assigning a PCP on every call. Make sure all compliance requirements are being met. And make sure they are doing an HRA on every call.
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Lastly, you want to have a plan for post-sale activities. Follow up with your clients when the policy is issued and then at regular intervals. 30, 60, 90 days and then again every six months or so. Make sure they know how to use their plan and if they are happy with it.
By doing all of this you will drastically increase your placement and persistency rates. Placement and persistency are vital to your success. You spent the money to acquire these clients, so you need to make sure you keep them.
Do the Math
So far we’ve covered the key factors you need to consider when planning to scale your business. How to maximize commissions, managing your leads to workforce ratio, and how to calculate the profitability of your business using LTV and CPA.
The last thing I want to leave you with is how to calculate the value of your business using a ratio. This simple method will give you a snapshot of the overall health of your business model.
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Take your LTV and divide it by your customer acquisition cost, or CAC. CAC is similar to CPA but measures placed policies rather than submitted policies.
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For Medicare advantage this will be any policy that clears the rapid disenrollment period.
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For many of you this will be nearly identical to your CPA, but for tele-sales models or call centers, your CAC will be higher than your CPA.
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If your LTV to CAC ratio is 1.0 or lower that’s bad. You are only breaking even because the LTV is the same as what you are paying to acquire that policy. Aim for 3.0 or higher—This means your profit is twice as much as you invest.
If I told you I’d give you $300 tomorrow for every hundred dollars you give me today would you take that deal? I know I would, and I’m sure most of you would, too.
If you have any questions or want to talk about how to best scale your business please give us a call and ask to speak with one of our marketing directors.
We’ll be happy to take the time to go over any of this in more detail and can even run a personalized calculation for you on what kind of ROI you can expect.
Thank you for your time, and Happy Selling.
Tags: Business, Sales Strategies
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Agent Reporting Agents will have visibility into their production since January 1, 2023. To access this new function, click the graph icon on the left side of your screen and select the “Performance” tab at the top.
This report will showcase:
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Tags: Online Enrollment, Medicare Advantage, Medicare Supplement, Part D, SunFireMatrix
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Preparing for the 2024 Annual Enrollment Period (AEP)Preparing for the 2024 Annual Enrollment Period (AEP) in the Medicare market requires strategic planning and a proactive approach to effectively meet the needs of beneficiaries. As this critical period approaches, there are several key steps to consider in order to maximize your success and provide valuable services to your clients. First and foremost, staying updated on changes to Medicare regulations, plan offerings, and industry trends is paramount. The healthcare landscape is constantly evolving, and being well-informed positions you as a reliable source of information for beneficiaries seeking the right coverage. Attend seminars, webinars, and training sessions provided by insurance carriers to ensure you're up-to-date with the latest developments. Reviewing your marketing and outreach strategies is essential to engage potential clients during the AEP. Refresh your online presence by updating your website, social media profiles, and other digital channels. Consider creating informative content such as blog posts, videos, and downloadable guides that address common questions and concerns about Medicare plans. Tailoring your messaging to highlight the advantages of different plans can help beneficiaries make informed decisions. Focusing on compliance is also crucial during the AEP. Familiarize yourself with the Medicare Marketing Guidelines issued by the Centers for Medicare & Medicaid Services (CMS). These guidelines outline the dos and don'ts of marketing Medicare plans. Ensuring that your marketing materials are accurate, transparent, and compliant will maintain your reputation and prevent potential legal issues. Lastly, anticipate the surge in inquiries and be prepared to offer personalized assistance to beneficiaries. Consider implementing systems to manage incoming queries efficiently, whether through your website, email, or phone. Providing clear and concise information, as well as addressing concerns promptly, can set you apart as a trustworthy advisor. By offering exceptional customer service, you'll establish strong relationships with clients that extend beyond the AEP. By strategically approaching this period, you'll not only serve your clients effectively but also position yourself as a knowledgeable and reliable Medicare advisor.
At PSM, we are committed to providing our agents with a range of resources and support to help them succeed. From personalized marketing materials to interactive sales strategies, our goal is to empower agents with the latest tools, technology and mentorship to achieve new levels of success this AEP. AEP Resources:
Powerful Partnerships:
We are committed to providing our agents with a range of resources and support to help them succeed: Our powerful partnerships include: Strong relationships with insurance carriers and industry experts to provide agents with access to the best products, tools, and support. AEP Helpful Guides:
We are here to support!
As a reminder, We pride ourselves on a "Do the Right Thing" approach and will go above and beyond to service the needs of our agents. We look forward to having a successful AEP and supporting you with products, technology and the personalized service you have come to expect from PSM. We appreciate the opportunity to earn your business and wish you the best!
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Tags: Medicare Advantage plans, CMS, AEP, medicare supplement insurance, Compliance, Marketing, Best Practices, 2024
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Effective September 1, 2023, amendments to the Oklahoma Insurance Department (“OID”) Medicare supplement regulations create new enrollment requirements for Medicare supplement issuers. OAC 365:10-5-129(f) Amendments to Oklahoma Administrative Code (“OAC”) 365:10-5-129(f) create new enrollment opportunities for Medicare supplement policyholders. The regulation requires Medicare supplement issuers to provide new supplement policies with the same or lesser benefits to current Medicare supplement policyholders—regardless of current issuer—who have had no gap in coverage greater than ninety (90) days since initial enrollment. Previously, these policyholders have had no opportunity after initial enrollment to move to any other Medicare supplement policies or issuers, trapping the policyholders in policies with rising premium costs and no opportunity to search for lower premium rates. Issuers offering a new (i.e., succeeding) supplement policy shall waive medical underwriting or preexisting exclusions if the new supplement policy offers the same or lesser benefits. Issuers of the current (i.e., prior) policy are required to furnish a statement of benefits or other pertinent information sufficient to permit verification of benefit determination to any new issuer upon request. OAC 365:10-5-129(g) Amendments to OAC 365:10-5-129(g) require issuers of Medicare supplement policies to provide notice to individuals under the age of sixty-five (65) enrolled in Medicare by reason of disability of their eligibility for open enrollment to Medicare supplement policies upon reaching the age of sixty-five (65). Issuers must provide this notice sixty (60) to ninety (90) days prior to the first day of the first month in which the individual becomes sixty-five (65) years of age.
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Tags: Medicare Supplement, Compliance
