Producers either succeed or fail because of either a lack of sales skill, a lack of organization, a lack of drive or a lack of management. If you have hired a producer who cannot sell, shame on you! Testing would certainly have proven that point. Many people can sell themselves to you, but not your products to your customers. That same testing would point out weaknesses in drive and organization capabilities, as well as in sales ability. However, no amount of testing will correct a lack of management that so affects the producer that he/she fails in the job.
Only you, as agency owner or sales manager, can correct that situation. If you wonder how often this occurs, think back to producers you have known who have succeeded at their last agency only after a few failures previously. If they could sell sufficient amounts of insurance to support themselves and their agencies where they finally landed, why wouldn’t they have been able to do the same in their prior agencies? The answer, invariably, is the lack of direction and management at those prior agencies.
The answer to the problem is to provide each producer every opportunity for sales.
The Agency as Lead Generator
First, it is the agency’s responsibility to find and provide sufficient qualified leads to its producers to assure success. No producer should ever claim that he/she did not have enough prospects to whom to sell insurance products, and no, giving the producer the telephone book and pointing to the business listings is not the same as providing leads. Qualified Telemarketing firms charge strong rates ($20 – $40) for leads, but guarantee their quality and will replace disqualified leads at no further cost. (By the way, that is how to qualify telemarketers. They will not be in business long if they adhere to a replacement guarantee and continue to provide bad leads). Wouldn’t you be glad to pay $40 or more for a lead if you knew that it was a qualified one whose sale was a matter of the quality of the sales effort? Most of producers’ waste time is spent trying to create qualified leads for themselves. We hire them for their sales skills, not for their prospecting skills. You will always make more money on producers whose time is spent actually selling products to prospects, rather than trying to find those prospects.
Identifying Producer Activity Needs
The next part of effective management is to help the producer identify what level of activity is necessary to meet his/her compensation objectives (and the agency’s revenue objective and validation of the producer’s draw). This process begins with the producer’s salary or draw and expected commission level (if any) above draw. Estimate the producer’s renewal commission and reduce the total compensation expectation by that figure. The remainder must be driven from new business. If the producer has a track record of sales, use it to identify his/her average commission per sale (if not, use the agency’s average commission per sale last year). Divide that average into the new business requirement to identify the number of sales needed. Next, identify the number of prospects that must be proposed in order to achieve the required number of sales. Then, identify the number of sales calls needed to achieve the required number of proposals. Finally, identify the number of prospects that must be contacted to achieve the number of sales calls required.
Test each of the numbers developed above for reality based on the time available by the producer for these efforts. If you and the producer agree that the number of prospects to be contacted, sales calls (many prospects will require multiple sales calls over an extended period before permitting a proposal), proposals, and sales are realistic, you have entered into a mutual contract for services by the producer. The agency is to provide the leads and the producer is to carry out all the required visits and sales.
The final step is to monitor and manage the producer’s efforts.
Managing Producer Activity
Nothing proves the value of a producer more than verifiable activity levels. Agency Consulting Group, Inc.’s clients require Weekly Activity Reports from all producers as a condition of compensation. In other words, your paycheck follows the submission of your Activity Reports – No Excuses!!
The Activity Report commonly has the following categories:
1. Prospects contacted (contacts = calls completed to the insurance decision-maker)
2. Prospect contact goal (from goals set above)
3. Sales Calls (detailed by the visit made) – sales calls made to prospects are to include: prospect name, contact name, phone #, results of call, next activity for prospect, and date of next activity
4. Proposals (detailed list of each proposal made that week) with results of each (Sold – Y/N/Pending, if sold – Premium and Commission)
This report tells the agency manager how much pure sales activity the producer accomplished in the prior week. If a “producer” can only manage three or four sales calls, and two or three prospect calls in a week, it becomes quickly apparent that he/she cannot live up to his/her new business goals contract. At this point the agency owner must determine whether the “producer” should be an account executive (servicing his/her pre-existing book of business) or whether enough non-sales work can be eliminated to permit a pure sales function again.
Managing is a verb. It must be done proactively. It need not involve emotional outbursts if expectations of performance are clearly spelled out and the results of non-performance are, as well.