Theft of Accounts: What to Do When A Producer Departs - With Your Accounts
Almost every agency that we have visited have bemoaned the lack of sales due to the a) inertia, b) lack of effort, and c) lack of sales ability of the existing producers and due to the lack of a producer force at all. Yet the agencies to which we consult who are active sales organizations have the same kinds of producers, as do the agencies with failing sales efforts. They are in the same areas and draw on the same realm of potential producers. As a matter of fact, some of the same producers who fail at some agencies become sales successes at others.
What we have determined is that many agencies want sales, but do not want to do the things that will promote sales.
Does your agency have a sales oriented culture?
Do you claim that the only thing you have to sell is service? Service is, of course, an important part of an agency operation. It adds value and retains the business that you SELL. But do not fool yourself an insurance agency is first a sales organization, then a service organization. If you do not sell and grow, you will eventually have nothing left to service.
A sales oriented culture is demonstrable in an agency by the following:
1. Sales and growth is a part of the agency’s Mission Statement (long term business goals). Producers (and carriers) look for a Mission that includes annual targeted growth that is verified by historical performance.
2. Does the agency take the responsibility for generating and promoting sales? For the last 100 years, producers have been hired into agencies then have been told, “Go Ye Out and SELL (or be fired)!” Often their hiring, a limited draw, a desk and that statement have been all the support that a producer has gotten from an agency.
Imagine for a moment the application of this method in any other career – let’s say selling furniture for a major store. How successful would salespeople be if no advertising and sales were conducted by the store to draw customers into the sales process? The job of the ‘producer’ is to close the sale on a high percentage of prospects that the store entices into the sales process. The job of the store is to draw sufficient prospects into the sales process to permit the producers to earn a living and the store to make a profit.
Why should the sales process in insurance agencies be different than this example? Active consistent marketing should be the responsibility of the agency while closing the sale should be the responsibility of the producer. If the producer cannot close a sufficient percentage of sales presented to him by the agency, he should be replaced. If the agency cannot generate sufficient activity to keep its producers busy and earning a good living, they should seek a more active employer elsewhere.
3. Does the agency producers have sales goals and does the agency sponsor regular (weekly) agendized sales meetings? Sales goals should be constructed by the producer and the agency sales manager to identify how much business the producer needs to sell in order to meet HIS (or her) compensation target. That process puts the sales goals into proper perspective to the producer as the needed activity to attain his/her financial goals. If the agency finds that the sales goals of the producers do not meet its growth needs, it does not have enough producers. Do not try to get the producers to generate more business. If they have identified their sales goals in accordance with their compensation goals, they may accept your revised objectives, but will probably not achieve them. Their own goals truly define their level of satisfaction, beyond which their efforts will flag.
Weekly sales meetings accomplish a number of objectives:
A. It keeps the producers and owners focused on sales.
B. It publicizes the success (or lack of it) for every producer. No one likes to report poor results, especially producers who, by definition, have high ego drives. The reporting mechanism is an added incentive to generating activity and results.
C. It identifies weaknesses in the agency sales effort if insufficient prospects are the problem
D. It permits the group to share “war stories” and to learn from each other’s successes and failures to avoid them in the future.
Weekly sales meetings spell the death of the sales effort in an agency if they are permitted to become “Blame Sessions”. The agency owner must understand that it is in neither the producer’s nor the agency’s best interest to NOT sell insurance. If problems exist stopping the sales effort, the owner or sales manager’s responsibility is to eliminate the ‘roadblocks’ to success.
4. Is producer compensation directly related to sales results? The reason that you rarely hear from your new car salesperson after the sale is that the service department is charged with establishing a lasting relationship with you to insure your retention. The salesperson is busy selling to other customers because that’s how he gets paid. The auto dealership is very clear on the separation of responsibilities and prove it by rewarding its service department based, in part, on the retention of customers and its sales staff exclusively on the sale of cars (both to new and to pre-existing customers)
Why shouldn’t insurance agencies compensate similarly? How many insurance producers receive salary or renewal commissions similar to growth or new business commission? Doesn’t that tell them that servicing existing customers is also their responsibility? That mixed message by the agency tells producers that the agency wants them to sell AND to service. It provides a convenient excuse (often used) that the producer is “too busy” servicing and renewing existing business to sell new business. That excuse disappears if the producer’s primary earnings result from the sale of new business.
5. Does the agency have competitive products and prices for the insurance needs of the prospects in its marketing area? It is not necessary to have unique products and the lowest prices in order to actively and successfully sell insurance. It is mandatory to have competitive products and prices that are in the median price range that are needed by your client base. If any of these three qualifications are not met, you are failing yourself and your producers as an agency. Your primary efforts should be exerted in recruiting the carriers who can provide you competitive products to sell.
6. Do you actively and consistently recruit producers and are you willing to pay the price? The time to recruit producers is not when you feel you need one – it is NOW. Producer recruitment is a consistent and regular task (and investment) in high performance agencies. They recognize that they never have enough strong producers and are always looking to upgrade. They (and you should) develop a recruitment program as a part of their Strategic Plan that includes job expectations and descriptions, advertisement, recruitment, testing, and standardized interviews. The recruitment is as heavy outside of the insurance industry as from within it and concentrates on the sales personality. Total compensation is calculated to include direct draw and/or commission and all benefits and other costs and must turn a profit to the agency within three years. The three year model to profit is the investment that the agency makes in a producer in order to generate strong returns on this investment into the future. The agencies know that the investment is a good one for the successful salesperson and that they will never spend much for the unsuccessful salesperson because he is quickly (within 3 months) identified and eliminated. The downside is limited and the upside is tremendous if you can build a strong sales force adding one or two successful producers each year to your team.
These six points are not exclusive, but are the core of the sales oriented insurance agencies that we encounter and assist as a consulting firm. If you are not yet a sales-oriented agency, follow these guidelines to become one. If you feel that these efforts are too strenuous for you to accomplish, acknowledge that you are not an insurance SALES organization and that your forte is in excellent service. Do not stress yourself by taking half steps toward building a sales organization if you are not committed to accomplishing that task.