How To Hire A Producer

HOW TO HIRE A PRODUCER

by Peggy Mika

Agency principals must define positions when they set out to hire new producers. Are producers expected to bring in new business, service or round existing accounts and follow up on referrals?

Agency principals who can accept the following facts may be on the road to making a good hiring decision their next time out:

• 80% of people now in sales are no good at it.
• A college degree and previous sales experience are not indicators of a good salesperson.
• Four in 10 people would be good salespeople-given the opportunity and proper training.

One standard rule to apply when beginning the search for a new producer is to define the job opening. In some cases, this apparently simple step may require reviewing each job in the entire agency. Define each job clearly and determine that each employee is happy doing his job. If any employees are ready for new or added responsibilities, the definition of the job opening might be affected.

Even after a careful review of jobs, the definition of a sales opening may appear to be very simple: sales producer. However. in the insurance industry 'sales producer' can be defined in at least three ways. That is the conclusion of Jeanne and Herbert Greenberg, co-authors of the book, What It Takes to Succeed in Sales.

The new producer may be expected to bring in new business. Period. Or the new producer may be expected to bring in new business and service those accounts. However, another new sales producer may be asked to take over an existing book of business. The duties might include servicing and rounding out existing accounts and following up on referrals from them.

According to the Greenbergs, the type of salesperson who will succeed in each of those three jobs is very different.

In general, the successful salesperson possesses the personality traits of empathy, ego drive, service motivation, and ego strength. (These are the terms used by the Greenbergs, but the traits are consistent according to many experts on sales personalities. Some refer to ego drive combined with ego strength as self-confidence.)

The Greenbergs write that empathy is the single basic ingredient common to all good salespeople. However, they add that empathy is not enough. The successful salesperson is motivated to ask the client to buy.

Ego drive is the motivation behind the sale. The salesperson thrives on making the sale because it enhances his or her ego. A person who has a very strong ego drive may be very good at selling hard-sell, small-ticket items, the Greenbergs say. He or she may not be good at the sale that requires cultivating the client over time.

The third of four characteristics of a good salesperson is service motivation. People with this trait need to be liked. They crave the gratitude extended by clients who receive good service.

Ego strength, the ability to take rejection, is the final part of the sales personality. All the ingredients are necessary to make a salesperson. However, in different mixes the ingredients create people who can sell different products.

The Greenbergs offer examples of how people with different combinations of these traits can fit into an insurance agency. A producer charged with bringing in new business must possess about equal parts of empathy, ego drive, and ego strength. 'The lack of any one of these three characteristics can guarantee sales failure,' according to the Greenbergs. 'But success could hinge on other factors.' They recommend that if bringing in new business is the real job of the new producer, a CSR should take over service duties.

The producer hired to service and expand an existing book of business does not need a strong dose of ego drive. What this person needs is empathy, service motivation, and organizational skills. A person with too much ego drive would probably not succeed at this job.

When the service-motivated person with little ego drive attempts to sell, or the ego-driven person with little service motivation attempts to provide service, problems arise, according to the Greenbergs.

The producer charged with generating new business and servicing that book is hard to find. The candidate must possess a balance of ego drive and service motivation, plus empathy and ego strength. The Greenbergs warn that this animal is hard to find. But the candidate who has all of those qualities has management potential.

Where do you find this ego-driven, empathetic, service-oriented person?

She may be answering the telephone at the front desk. Or he might be your best friend's son. Or she might be the principal of the local high school.

The insurance agency manager should not overlook any candidate who has the basic personality characteristics of a salesperson, according to the experts. The search should begin in-house. Many bored CSRs and restless underwriters have the characteristics necessary to become good producers.

A competitor's staff is another source of new sales talent. But the Greenbergs say that the agency manager should consider the competitor's CSR for the same reasons in-house service people are considered.

Another source is the list of potential candidates which all the owners and principals should have been building all along. Most experts agree that finding new producers is much like finding prospects for insurance. Even when there is no opening in the agency, every one should keep an eye open for prospects. Then when the agency needs a new producer, the person doing the hiring can turn to that list of prospects.

Finally, the experts say, consider the entire population a source of potential candidates.

One very big but very common mistake, the experts agree, is to exclude candidates because they have no sales experience. According to the Greenbergs, 'One out of every four people has more inherent ability to sell than well over one half of the people currently attempting to earn their living in sales.'

An old adage says, 'Too many people are hired for what they know and fired for who they are. They should be hired for who they are and taught what they need to know.'

To find hidden sales talent among the masses, trim the qualifiers to the minimum. 'Management should focus on those few qualities that are really and objectively necessary as limiters,' the Greenbergs say. For example, don't cut potentially great candidates by asking for a college degree if a college degree is not really necessary. If there is no real reason the person must have three years of experience, don't ask for it.

With job description in hand, qualifiers cut to the bone and the job opening looming, the agency manager must then 'cast the broadest net' to land the best new producer. Cast the net by word of mouth, with newspaper, radio, and TV ads, and through employment agencies and school placement offices.

Tom Williams says he calls his friends when he needs to hire someone. He is president of the California Insurance Alliance and chairs the PanAmerican Consulting Group. He asks his friends to recommend someone, and he specifically asks for names of people who are not actively looking for a job. And he fills most of his openings in that way.

When working through ads or agencies, the Greenbergs advise against listing the opening under a sales-help heading. Run the ad under a heading such as business opportunities, they suggest. The job description should state that it is a sales position, but it should emphasize the personality characteristics the candidate must own. It should state that candidates without sales experience will be considered and will be trained.

Once the agency has produced a viable list of candidates, the screening process can begin. The Greenbergs recommend six steps: resume review, telephone screening, brief initial interview, reference checks, psychological testing, and a final in-depth interview.

With a new producer hired, the question becomes how to compensate him or her. Tied closely to that question is the task of motivating the producer. If the hiring decision was correct, the new producer will be motivated to sell. The agency manager's job really is to keep the new producer motivated to sell insurance for that agency.

A clear path toward clear goals motivates new producers, according to Williams. The knowledge that the agency wants them to succeed motivates new salespeople, he said. The pay package may take any shape. Some agencies pay straight salary; others straight commission. Most blend the two. However, incentives built into the compensation plan can also motivate new producers.

What these incentives might be depends upon the individual producer, according to Paul Whiting with the John Jaques consulting firm. 'You can only know how to motivate a person if you really know that person,' he says. The person who will train the new producer must take the time to get to know the new person. When the agency manager really knows the producer, he or she will also be able to offer the right 'carrots' to motivate the producer, Whiting said.

Cash bonuses might motivate the producer with a young family or a large mortgage payment. However, the reward of a sports car as a company car might motivate a different person. Each compensation plan can include the unique incentives which motivate the individual producer.

The subject of stock options included in a compensation package may come up when hiring a new producer. However, Whiting warns against stock options for newcomers. Offer a stock option plan only to producers who have proven their sales skills, and only to producers who have management potential,' Whiting said. These benchmarks will take three to five years to reach.

Compensation options including salary, commission, salary with bonus, and salary plus commission are detailed in a handbook compiled by the Florida Association of Insurance Agents. In advice to producers, it says, 'The agency will never use a method which results in it paying you more than your production makes available. Find that bottom line. That's what you are worth to your principal, and exactly how it is given to you is up to you and them.'

The handbook also suggests using the following formula to get an idea of what that figure might be: Total commission income generated by a producer minus agency expenses (office overhead, management fee, ownership profit) equals total available to pay all producer costs (including salary, commission, car expense allowance. etc.).