The 10-Minute Profitable Producer
By: Hodges
In most states, the pre-licensing requirements for selling insurance are just 40 hours of study. So, aside from learning the technical basics of the most widely used types of coverage, producers are expected to learn the fine art of selling on their own.
Agency owners generally know this, and try to hire experienced producers who can become profitable quickly. To that end, the Big “I” 2008 Agency Universe Study found that of the new producers hired by participating agencies between early 2006 and early 2008, 54% had previous selling experience at other agencies.
However, since many experienced insurance producers who are also talented sales people are already employed, agencies are increasingly forced to cultivate their own top-notch producers. Being able to do this well is important, given that nearly 50% of agencies participating in the 2008study hired at least one new producer in the preceding two years, and one in 10 of these agencies hired three or more new producers during the same time period.
Resources in Your Back Yard
So how does an agency go about properly training new sales people while getting them to start selling as soon as possible? In a market already gnawing at agency cash flows via reduced premiums, and in an economy threatening to consume a percentage of every agency’s business, it’s hard to wait the 18 months to three years it generally takes to make new producers profitable.
Bill Wilson, director of IIABA’s Virtual University (VU), has some ideas for speeding up the process. One is enrolling new sales people in VU’s national sales skills courses, a set of six online classes provided by Richardson, a sales training organization with 29 years of experience. Classes can be taken on the producer’s schedule, and most segments take just three hours to complete. That means that within three hours, says Wilson, “a new producer can become knowledgeable in a specific subject area of insurance.”
Wilson also suggests directing new salespeople to two additional online sources instantly available at www.independentagent.com — the VU Library, which contains hundreds of articles about individual aspects of personal lines and commercial lines insurance, and the VU’s “Ask an Expert” service. “We have more than 50experts in sales and agency management, and they’re all available by e-mail,” says Wilson. To use the service, visit the Web site and click on “Virtual University.” Then complete the form and e-mail it to Wilson, who will ask the appropriate expert(s) to contact you.
Peel & Holland Financial Group, Inc., a 42-person agency in Benton, Ky. That has eight producers, uses the VU’s online courses to train its producers. Peel &Holland’s has what it calls a “technical department” that combines the online courses with additional instruction available from certain carriers, and mentoring by internal staff to tailor a learning schedule for each new producer. “We tell them we don’t only expect them to sell, but to complete the training schedule as well,” says Keith Riley, agency executive vice president.
As he sees it, 80% of a new producer’s time should be spent on training and 20%on relationship development. Then as training segments are completed, the ratio changes to allow more time for building relationships.
Testing and Teaming
After experiencing failures with several producers, Peel & Holland’s agency managers developed a system for identifying and hiring proven sales talent. That was four years ago, and since then, Riley says they’ve had considerably more success with most new hires coming from outside the insurance industry.
New producers start their syllabus and meet their mentor, and although Peel &Holland hasn’t used this technique itself, Riley says it could be beneficial to team a new hire who has proven sales talent, but no industry experience. “If your sales culture is about selling the value of your organization, irrespective of the insurance product, you can partner a true salesperson with someone who is more of an insurance technician,” he says. The result should be heightened productivity—and profitability—on both ends.
Cindy Webster, president and CEO of the 50-person Jack Rice Insurance in Largo, Fla., has developed a different but equally successful path to new-producer profitability. Each year, her agency provides an internship for a Florida State University student obtaining his or her degree in risk management. “They come in and do an internship for us in the summer, and then (later) go to work for us full time,” says Webster. In between, these potential producers are tested for sales aptitude. “We absolutely believe in testing and we use it for every position in the office, not just sales,” says Webster.
Upon becoming full-time employees, these young producers enroll in the Big “I” Elite Force Sales Training Program. Here, they spend one year earning the Associate in Insurance Production (AIP) professional designation while also being mentored by an experienced agency producer—and beginning to sell. “We definitely think, even with the current economy, there’s a tremendous opportunity for new salespeople,” says Webster, “mainly because they don’t know any better.”
Selling From Day One
Because Jack Rice Insurance has no sales manager, the Elite Force Training Program fills that position. Agents who take the program are required to set goals for themselves and file regular reports on their progress. These reports are then given to management at the agencies that employ them. “So in one year, even though these producers are still on the inside of the agency, they’re selling,” says Webster. But in reality, they’re selling from the first day they begin work, because as part of their training they take all new-business phone calls, market that business and then sell it. The only thing they don’t do, Webster says, is process endorsements and certificates.
New producers at Jack Rice Insurance have another opportunity to sell, too—they’re assigned a mentor at the agency who gives them accounts. The mentor keeps a portion of the commission while the rest is paid to the trainee. The trainee works the account under the mentor’s tutelage, and at the end of the two years receives that account as part of his or her book of business. “When they go on full commission at the end of two years, it’s not a big shock,” Webster explains, “because they’re already building their book.”
While still on draw, though, new producers learn how the business they generate helps pay their salary and expenses. And by the end of their first year, “they’re typically bringing in more than we’re paying them,” says Webster. “So we know this program works.” Of the agency’s eight producers, four are former interns who’ve become successful producers.
A Time Investment
How much time agencies devote to developing new producers can vary tremendously, but Frank Swingle says it’s imperative to find that time and find it consistently. “There are people out there who hire producers and throw them up against the wall to see who sticks,” says Swingle, president of the 44-person, 12-producer Swingle Collins & Associates in Dallas. “If you’re not willing to invest the time needed to make them succeed,” he adds, “you’re wasting your money.”
Swingle had mentors who looked after him and saw that he did what was needed, and he still believes careful supervision is important. “There’s not a magic formula,” he says. Agencies should first spend time getting to know potential producers and making sure they will fit into the agency’s culture. Once new sales people are brought on board, the agency should begin training and team the new associate with a seasoned producer when closing each deal. Not only does the trainee receive hands-on instruction in this way; the agency is also protected against errors and omissions that could otherwise occur.
Is it hard to convince seasoned producers that their time is well spent mentoring a “newbie?” Swingle puts it this way: “Mentoring is part of our agency perpetuation and hierarchy planning, and here, you’re either part of the team or not.”Translation: mentoring is part of the job for producers who want to become stake holders in the agency.
Swingle suggests putting new producers on track to be successful, then providing a structured environment that includes formal instruction, one-on-one mentoring and opportunities for networking with other producers. Swingle also advises setting goals for each producer that take into account his or her age and work experience, and the agency’s historical production trends.
As time passes, increase the percentage of new producers’ compensation so that it’s commensurate with their success in meeting goals. Then when appropriate, make most or all of their compensation dependent on sales. Share data with producers who show typical production rates for the agency. In this way, Swingle says, new producers will be able to measure their own success. And in the absence of sufficient pay, the onus won’t be on you to let them go. After all, Swingle concludes, creating a failed producer “has nothing to do with the money you spend, and everything to do with the time you’ve invested.”
Hodges (hodgeswrites@aol.com) is IA senior writer
The Producer’s Tool Belt
The following items are listed in IIABA’s Top Producers: Discover, Train, Reward manual as essentials for becoming an excellent insurance sales person.
• Product knowledge
• Knowledge of competition
• Knowledge of customer base
• Knowledge of prospect base
• Knowledge of pricing and delivery policies
• Knowledge of (agency) organizational structure
• Knowledge of company policies, procedures and work flow
Some of these tools can be found at your own agency, starting with its mission, history and culture. Others can be acquired through technical instruction offered by your state or national associations, your carriers or private firms. Most difficult to forge, however, are personal characteristics that can make a competent producer a great one. This is why professional testing for such interpersonal skills as agreeability and ability to communicate is also important.
Core skills, related to personality traits, including:
• Persuasiveness
• Interpersonal skills
• Personal organization
• Problem-solving
• Decision-making
Find ways to assemble them all, and you’ll be far busier retaining your skilled producers than looking for new ones.
—S.H.
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