Pareto was right. The 80/20 rule works in insurance. If you applied the 80/20 rule to your book you’ve probably discovered that the top 20% of your clients generate 80% of your revenue. Now what do we do with this information? When you reach the point where growth is challenging because of service constraints, It’s time to shed smaller accounts to allow continued growth and profitability.

Total up the revenue generated by the smallest 20% of clients in your book and remove them. That’s right. Take them out of your book. Give them up. Move them into a select accounts department, gift them to a young producer, sell them to a competitor or move them to a carrier service pool. Now look at the top 20% in your book.I’ll wager that the revenue generated by any single one of your best clients equals the revenue generated by ALL of your bottom 20% combined. In my book, I was so thrilled to discover this, that I traded down my bottom 33% (with some exceptions) and replaced the lost revenue in less than one year with 1 larger account. My book now generated more revenue with 53 fewer accounts.More importantly, I had much more time to over- service by best accounts, who responded by giving me introductions into similar accounts and I doubled my book in less than 3 years.Take a close look at your book of business and trade down the bottom 20-33% every year. You’ll double your income every 3 years with many fewer clients. And if you get squeamish about trading down and losing income, I’ve taken the liberty of listing all of the excuses thought of by the many thousands who have come before you.

There are many reasons why producers won’t trade down smaller accounts. I call it mind trash. Here are my top 10 favorites.

1. “I can’t afford to lose the income” Truth- it takes less than one of your top 20% to replace it all, and your clients will help you if you share with them your business plan.Also most agencies will give you 6 months to 1 year of commission on traded down accounts.

2. “Those little clients require no service” The truth is, smaller clients have less resources and use more of yours. The larger accounts have middle management and typically require less service. We all know about high maintenance small accounts that won’t go away.

3. “I worked hard for those clients, that $$ is mine I earned it etc.” Truth is, none of those smaller clients required hard work to write, and they are holding you back from focusing on larger accounts.

4. “Those clients will be mad or insulted ” Truth is, most could care less who services them as long as they get serviced and their rates don’t go up. Also, they get better service from a small accounts department.

5. “We’ll lose a bunch of clients” Truth is, if you communicate effectively and sell the advantages the select accounts department or the trade down, few will leave, and those that do were unhappy already. Which would hurt more, losing some small clients or one of your largest clients because of neglect?

6. “They will tell all of their friends!” Truth is they won’t, but if they do, good. Birds of a feather flock together, chances are they will telling other small accounts that you don’t want in your book.

7. “We don’t have a select accounts department” Start one. It’s one of the most profitable changes an agency can make. The agency doesn’t pay commission on traded down accounts after the first year, so profit margins increase by the amount of commission saved. Also small business departments are incubators for new service and production talent.

8. “These small accounts could be huge some day” Truth is if they have been in business for over 5-7 years and they are not large yet, they most likely won’t be. If they grow, you can take them back.

That’s all I can think of right now, I guess my top 10 is my easy 8. I know there are a few other silly reasons, but they didn’t warrant the grey matter required for memory so I guess I’ve forgotten them. Point is, there are no valid reasons against trading down and so many reasons that support it.