Csr Compensation: Three Agencies' Examples

I have always been a believer that the best salespeople we have working for us are our clerical staff. The biggest problem seems to be our lack of proper motivational tools to excite them into selling. I have attempted to change their method of thinking, and although our program is in its infancy, it appears to be a step in the right direction. I am confident it will produce positive long-term results. A side benefit of this program is a definite change in attitude of the clerical staff: They're excited! And whenever that happens, good things are bound to grow from it.

We have established a financial reward concept whereby each employee will receive dollars in return for expiration dates and future sales. Rewards are as follows:

Any Property/Casualty $ 5

Life insurance policy $ 20

Policies earning $1,000 commission $ 100

Even though it appears to be costly program, we feel that its costs are minuscule compared not only to the dollars earned but, more important, to the new client base that will be developed. We have made it clear to our people that the producers will share in paying this reward, so the net cost to the agency will not be as high as it first appears.

The other concept that we have made clear to our clerical people is the magic of the word 'ASK.' We are confident that if people remember to ask other people for the chance to talk to them about their insurance coverage, the number of leads for our producers will expand dramatically.

We recently installed an incentive program that is very simple, yet seems to be quite effective and well received.

We pulled a run from our computer, itemized by CSR, at the end of a quarter. At the end of the next quarter, we asked for the same information and compared. A CSR who showed a growth in her book of responsibility was paid a bonus based on a percentage of commission for that growth.

Commercial Lines and Personal Lines are paid different percentages, but they are measured the same way. The Commercial Lines CSRs rely primarily on outside producers to initiate growth in their book of business, while Personal Lines CSRs actually produce their book of business themselves. Our Personal Lines CSRs have become miniature sales centers in that they have a reason to solicit additional lines of business, make appointments for outside producers, and become more inclined to follow up on phone-in or walk-in prospects.

We pay our CSRs for growth from any source, whether it be from new customers, rounding of accounts, rate increases, or changes made to existing policies. When a CSR refers a prospect to an outside producer and it is placed on the books, the outside producer receives a first-year commission, and the growth is credited to the CSR's account. That prevents having two producers on the same file.

This system is working well for us. Enthusiasm is high, bonuses and growth in the agency are fun, and we have removed some of the walls between departments by paying from all directions. In times of new growth, we are not stuck with a continuing expense. We also establish a new base at the end of each year to give everyone a fair chance at growth each year.

Previously there was little incentive for excitement when a new piece of business was brought in or when a prospect walked or called in. The best that CSRs could hope for would be a corporate bonus at the end of the year and a raise. Now they have a direct and instant interest in seeing new business placed on the books. Paying quarterly seems to be the best timing; anything shorter is almost meaningless, and anything longer is not frequent enough to keep up enthusiasm. Now everyone anxiously awaits the quarterly reports from which our calculations are made. Also, now someone can share the pain of losing business with management and producers.

Here's a recommendation: the satellite corporation concept for licensed CSRs.

The agreement, of course, would need to be modified to meet the specific needs, although what would be wrong with paying a CSR a new business commission, and allow him or her a percentage of ownership in the satellite corporation? This, of course, need not be based on a 50/50 concept.

The satellite corporation agreement would include a buy/sell agreement with first right of refusal to the agency owner and a valid noncompete agreement.

The satellite corporation concept is as flexible as you wish it to be and can fit the needs of almost any situation in an independent agency, including an in-house property/casualty producer, an outside property/casualty producer or subsidiary agency, an in-house life career agent, or CSR.

There is nothing wrong with paying a CSR a new business commission on personal lines. If that CSR decides to make a career of selling property/casualty insurance, consider keeping that career under your own roof, and amending or attaching an addendum to an already-existing satellite corporation.