At recent meeting a question arose when an agency owner suggested that dedicating producers to full time sales functions was unrealistic because each producer had service and administrative duties respective to their books of business that is required in order to maintain high service levels to the clients. He echoed the mantra of so many agency owners that service differentiates the independent agency from its direct writing counterpart.

It is certainly true that the greatest strength of the agency system has been the strong relationship that is built between the agents and the clients. But when we confuse processing with true insurance consulting service, we degrade our relationships instead of enhance them.

An agent/client or a prospect relationship is built and maintained by the degree to which the client feels their agent is knowledgeable and can assist them achieve their needs. However, we mistake processing changes and endorsements for building and maintaining relationships. I’ve never met a client that boasts that his agent personally processed every endorsement and checked his policies for errors. Most clients are unaware of the communications going on between the agency and the carriers at all, so they neither know nor care who is involved in the interaction as long as it is accomplished speedily and correctly.

To build a relationship with a prospect, you must show them why you are more valuable to them than their current insurance provider. And simply getting them a better price is NEVER the creator of a relationship. Don’t get me wrong. People love paying less and will love the next agent who offers then a lower rate, too! Showing value means proving that you know more, provide more and ARE THERE FOR THE CLIENT/PROSPECT more than their current provider. This isn’t hard to do for prospects since most other agents act just like us and forego the attention they give to prospects once they become clients. But if we mistake processing for relationship building, we will suffer the same client losses when the next agent visits our own clients claiming that they will give the client more attention than the current agent (YOU).

The transposition of the roles of service staff and processing with those of the producing agents is probably the most demonstrative indication of the demise of the mainline insurance agents in the United States. When an agent remains in the agency all day, every day, responding to administrative service and processing needs for which service staff has been employed, little time remains to actually build relationships with prospects who will mature into clients or to strengthen the existing client relationships to avoid them leaving you for the simplicity of a slightly lower rate.

Consider the fact that your most valuable clients will not even consider other agency proposals. They know you and trust you. They feel that you will properly protect them at a fair price and will not take advantage of them. And you do a wonderful job doing that exact thing. You see them often and bend over backwards to make sure they are properly insured. But all of your other clients are treated differently.

They are neither visited regularly, nor are they given the benefit of your counsel after their insurance program is sold to them. This creates a fertile ground for your competitors to sew the seeds of doubt that result in the client accepting “their” counsel to allow them to analyze and quote the very same risks that you analyzed and offered them so well when you wrote the account.

But, as many of you have told me, you are simply too busy to retain that relationship once the policy is sold. At least 80% of our commercial accounts are ‘RAI’ (Renewed As Is) and many of those are contacted by phone just once a year, if at all, and those contacts are not to actually speak to the client, but to verify his renewal information.

Do you remember how much attention you paid to those clients when you were courting them as prospects for their proposals? Your counsel was IN DEPTH and your goal was to help them, not just to quote them.

If you find yourself spending less time in the sales process and less time with your existing clients as your book of business increases, it’s time to review what you expect from your service staff vs. what you expect from yourself and from your sales staff.

Roles of Sales Staff:

Producers / Relationship Builders are supposed to grow the agency’s book of business. If they are being paid for retention of clients (renewal business), their job extends to maintaining strong relationships with the existing clients so that few leave the agency unless forced to by death or retirement or the sale of the business. But the important thing to understand is that in the end result, the agency doesn’t grow if we don’t continue to sell insurance to a growing client base. This means that if a Producer/RB is successful enough that (s)he has more clients than can be reasonably handles while continuing to grow the business, we must shift the retention responsibility to someone else to let the “hunter” do what the hunter was hired to do, sharing the revenues from those assigned accounts and allowing the producer to generate even more growth.

Several thousand years ago when our ancestors wandered from place to place to survive, the groups/tribes were comprised of hunter/gatherers, whose responsibility it was to find and kill the food and supporters who dressed and prepared the food for everyone to consume. In our business, the producers/Relationship Builders are the “hunters” and “gatherers”. Their job is to find it and kill it and make sure the crops they find are maintained so that they continue to yield results for the “tribe”. The Service Staff supports the RBs by making sure the customers are treated so well that they have no reason to seek other pastures. Can the hunters also be the servicers? Of course. But will it feed the tribe if the hunters spend most of their time cooking and cleaning up?

Roles of Service Staff:

If the service staff in your agency are processors who cannot (or will not) work independently to efficiently and effectively satisfy the customers’ needs, you have the wrong people in those positions. ‘Account Executives’ handle entire books of business, without producer intervention, including customer contacts and renewals, leaving the producer/RB free to give insurance counsel to the clients and to visit more prospects for growth. ‘Account Managers’ handle books of business with the exception of customer contacts the renewal process (still in the hands of the producer). CSRs are the front-line administrative processors, only handling transactions for the customers and producers. Service Assistants are CSRs ‘in training’ and are learning the insurance trade, the systems and how to communicate properly with customers.

We are long past the time when an agency had a quoter, a renewal processor and an endorsement processor. These are clerical positions that require sufficient knowledge to know the system and to do the same repetitive jobs that were done on the assembly lines in Detroit. But, remember, Detroit lost its edge to foreign auto manufacturers when it was forced to pay $70,000/year to folks who were doing a $25,000 or $35,000 job for the sake of continuously raising the standards of living of the workers. If you are paying so much for your service staff that they should be taking care of the customers in place of the producers, why are they still performing $10/hr. work effort?

So if you are one of the many agents whose producers are not as effective as they should be because they are in the office more than they are out of the office with clients and prospects it may (or may not) be the fault of the producer. It may be a systems problem with what your support people do requiring the producer to intervene much more than the producer should in order to maintain a strong relationship with the client and retain the business.

However, if you feel that the service staff are perfectly capable of managing the daily client needs, then an incentive-based role change is in order for your producers and any new producers should not be indoctrinated by servicing agents who will make the new producers as ineffective as the old ones.

Goal Setting:

Weekly goals should be set for each producer/RB for prospect visits and for client visits. The measure of their success should be whether they are reaching enough people that are not yet insured by the agency combined with whether those visits are advancing the relationship between them/the agency and the prospects. A sales call is not effective if it doesn’t eventually result in the adoption of that prospect as a client. So while we’re measuring sales calls and sales call frequency to the prospects to determine if they are doing the RIGHT THINGS, we are also measuring new business clients and commission income to understand whether they are GETTING THE RIGHT RESULTS FROM THEIR EFFORTS.

On the service side, make your service staffs responsible for achieving more than 90% – 95% retention of clients. 90% has been the perennial average retention in insurance agencies. That means that 10% of clients are lost on average in any given year. About half of those losses are uncontrollable, (death, retirement, sale of business). The other 5% are lost to competition for any variety of reasons – these are the controllable losses that should be measured as the measure of success of our service staff.

Call us for help in establishing goals structures and measurement devices in your agency (800 779 2430).


—- Al Diamond