Every agency tries to treat their customers well enough to retain them and to make them “fans” of the agency. Theoretically, you should treat all of your clients the same. However, the reality is we generally treat our higher commission customers a little better at the level of which they compensate you. Your less commissioned client expect the same amount of respect and attention as though they pay the same commission of those higher clients; expecting instantaneous service by the agency principal or a key producer on even small issues and they will complain bitterly if they don’t get that level of attention. And, of course, we would never tell a client that we cannot give them priority treatment based on their revenue to the agency.

So the goal within your agency should be to give every client the BEST SERVICE you can for the money they are paying you to be their agent. But it’s up to us as agency owners to define what that level of service entails and who should be responsible.

If you are paid $150,000/yr. as the owner, you are in fact, earning effectively $80/hr. based on a standard work day and year (yes, of course I know that you work more hours than anyone else, but we use the standard 240 day work year and 8 hour work-day for our examples). If a producer earns $75,000 their effective hourly rate is $39/hr. If a service representative earns $50,000, their effective rate is $26/hr. and at $30,000/yr., the effective hourly rate is $15.

How much time can you, as an owner or a producer give to a client who brings you $200/yr.? How much time is already expended on an account in simple CSR time and Service Assistant time (costing between $12 and $30/hr.)? If we expend two hours of standard service time on even the basic client each year, we are already spending $25 to $60 to service the account. Two hours of your time that of a producer or of a high level Account Manager will cause you to lose money on the customer each year.

The answer is to give each customer the time (s)he needs but do so by the lowest paid employee who is qualified to and can respond to the customer’s needs. The way to do that is to assign a number of clients to each of the service staff in accordance to the personality dynamics of the service employee and he client an of the revenue size of the customer.

A customer under $500 – $1,000 (depending on the agency) of commission is best served by the agency’s Customer Service Representatives, employees whose primary responsibility is transaction based and is charged with making sure that all transactions responding to customer needs are met efficiently (quickly) and effectively (correctly). If a client has a technical need requiring a higher level service representative or producer, it will be referred up from the CSR. Most of these customers should pay a producer only once, the year that the customer is written with the producer’s efforts. All renewal actions are done by the CSR. Should an account be in peril of not renewing the producer may be called back into service (and a commission is earned by the producer for retaining the account).

Customers generating between $500 (or $1,000) and $2,000 to $2,500 of annual agency income should be managed by an Account Manager whose responsibility is to assist the producers in the management of the relationship. The producer is still paid annually to retain the account and to maintain that relationship (through no more than one or two visits/yr) but the primary servicer is the Account Manager.

Customers at the moderate level size (usually between $2,000 and $5,000 of annual agency income) become part of the book of business that is assigned to an Account Executive (AE). An AE is a fully competent agent, highly qualified to deal with any of a client’s issues including renewal. We have seen CSRs grow into AEs with their only weakness being their inability to ‘sell’ insurance. They can respond to client questions and cross-sell lines of business needed by the client. But they have never been able to capture the essence of selling. We have also seen former producers become AEs, responsible for the maintenance of an entire book of business when they have lost the initiative to sell new business as part of the agency’s growth goal.

Account Managers earn a salary to manage a book of business working with any producer on their business. Account Executives earn compensation every year based on a percentage of the entire book of business that they managed in the prior year. AEs are given incentives to retain the maximum number of customers possible and to cross sell all the business they can to maintain the integrity and size of the book of business that pays their salary. This compares to AMs who are responsible for their efforts to the agency and to the producers who control the accounts they service.

It is important to understand the roles and goals of Service Assistants (processors), CSRs, AMs and AEs. At each step in the career path, compensation goes up correlated to authority and responsibility. And the work that the service reps do for clients frees the producers to go out and sell new business, the heartbeat and blood-flow of an agency.

I encourage you to call us (800 779 2430) and speak to us about your particular situation. The evolution of service positions to allow producers to sell and service staff to retain business is a key ingredient in growing an agency.