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Ask Donna "I want to grow, but I can't raise my rates"
Note From Larissa For Donna... Hey everyone! We're hoping to get these segments out in video format soon! If you would like to submit a question for Donna reach out to us through emails or the comments below!
A few weeks back, I got a question that I think will hit home for a lot of insurance agency owners. Here’s what they wrote:
“Hey Donna,
I run an insurance agency focused on personal health and auto insurance. I’ve had steady growth, but it’s just not hitting my goals. I read Profit First back in 2018, and while the advice on profitability is solid, that’s not my main struggle. My goal is for my agency to be the biggest and best-performing under my broker in the state. But since my broker sets my rates, Profit First doesn’t seem all that helpful. Any thoughts on this?”
This is such a common challenge for agency owners. Unlike other business owners, insurance agents don’t always have the luxury of raising rates. I’ve worked with hundreds of agents, and I get how those tight profit margins can feel limiting.
But here’s the thing: Profit First principles can still drive growth. Here’s how:
1. Get Creative with Cutting Costs and Focus Your Marketing
One of Profit First’s core ideas is “cut costs creatively.” But what does that look like in practice? Many insurance agencies throw money at general “branding”—sponsoring local teams or events. While that can build goodwill, it doesn’t necessarily bring in new clients. Plus, if you’re with a big-name broker, they’re already covering brand recognition with their own ads.
Instead, direct your marketing dollars toward campaigns that show clear returns. Every dollar should go to initiatives with measurable key performance indicators (KPIs) that track customer acquisition. With this approach, you’ll know what’s genuinely driving revenue.
2. Boost Your Team’s Efficiency
When profit margins are tight, efficiency is key. A strong workflow can really increase your agency’s capacity and let you take on more clients without raising costs. Think of it as doing more with what you already have.
Here are two ways to maximize team efficiency:
Right-Size Your Team: Your team should be big enough to handle new clients but lean enough to avoid unbillable downtime.
Invest in Training: Give your team the skills they need to be highly effective. A well-trained team can help you scale without constantly adding new people.
With an efficient team and solid workflows, even a 5% profit margin on $15 million can translate to real gains.
3. Make the Most of Your Office Space
Location matters, but are you really using that space as effectively as you could? Your office can be more than a place to work—it can be a tool for revenue growth. Whether that’s hosting community events or partnering with local businesses, a smartly-used space can support your growth goals.
Bringing It All Together
While you might not have control over your rates, there are so many ways to drive revenue by using Profit First principles creatively. Targeted marketing, team efficiency, right-sizing, and making the most of your office space can all help you hit those growth goals.
Having worked with countless insurance agents, I can say confidently that you absolutely can be the top-performing agency in your state.
Ready to take things to the next level? I’m currently bringing a few more students into my Profit First coaching program for insurance agencies. If you’re interested, reach out, and let’s schedule a discovery call.
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