Find the best sharks and train them to be even more effective predators.
“We don’t want the people who swim with the sharks. We want the sharks.”
Employment ad from The Orange County Register (reprinted from Readers Digest)
For many decades, the independent agency has been an entrepreneurial success story. The agency founder was always a remarkable person. He or she started the business from scratch and served as the CEO, producer, CSR, bookkeeper, and janitor. And these people succeeded! With greater success, they hired CSRs, a bookkeeper, and a janitor.
As agencies grow, they eventually require a producer — and many highly successful agency owners find it difficult to bring in a non-owner producer. Even though, or perhaps because, they’re great salespeople and fantastic individuals, they can’t seem to hire a good salesperson.
Why do these owners succeed at so much, but often fail at hiring a good producer? Maybe subconsciously they don’t want the competition. They like being the best salesperson in the agency. This certainly holds true in some cases, in which agency owners have capped, fired, or otherwise stifled good producers when the producer started making more money than the owner. One agency owner actually declared, “No one will make more than me, no matter how much they sell”
Other owners just hire bad producers to begin with so that they never have to worry about the competition. In still other cases, it might simply be that the talent to sell doesn’t translate into a talent for identifying other people who can.
For whatever reason, the No. 1 problem in many agencies is the lack of production. So if you want to add a good producer, do two things.
First, hire a good salesperson! Obviously, this is easier said than done, Here are a few recommendations:
- Be realistic and objective. Don’t rely on inspired hopes.
- Don’t require the person to know insurance. Teaching insurance to a good salesperson is easier than teaching sales skills to most people who know insurance.
- Be suspicious of a lot of former agency employers on the person’s resume. Frequent job hopping might be acceptable in the high-tech field today, but for most producers in our business, it’s usually a sign of failure. A good salesperson usually stayed with a former employer, built a big book, and set a course for eventual agency ownership. As the old saying goes, “If a tree had apples last year, don’t expect pears this year.”
- Use personality tests as filters. These tests aren’t perfect, but they’re better than an agency owner with a bad track record for hiring producers.
- Be patient. Good salespeople aren’t a dime a dozen. You’ll be better off waiting another six months to find the right producer than hiring the wrong one too soon!
- Have a hiring plan. Planning to hire a good salesperson is subtly but crucially different from talking about it. Many agency owners lie back and wait for good fortune to drop a great producer in their lap.
Second, provide sales training! Unfortunately, agency owners are often reluctant to offer training. According to Jack Fries (Fries & Fries Consulting), agencies spend less than half of 1% of total revenues on sales training. Even though sales are an agency’s first goal, agencies invest far less on sales training than on postage, agency repairs, attorneys and accountants, or bad debts!
I think that many agency owners don’t train producers because they themselves didn’t need training to succeed. Or maybe training is so far removed from their needs that they don’t even think of it. It is necessary, though. For example, a friend of mine built a $90,000 book at his first agency and then stalled. He and his employer became frustrated with each other and eventually parted ways. After his new employer provided sales training and the producer generated $100,000 in 10 months (and his book is still growing strong).
The old dictum, “Those who can, do. Those who can’t, teach,” holds true. A great talent for selling does not make an owner a great teacher. Most owners should stick with providing direction and goals and send their producers to a good sales training program.
Provide sales training. It does cost money, but even $5,000 is a low-cost investment. Consider how much thousands of agencies waste every year on failed and failing producers. Suppose a new producer is paid an average of $75,000 per year. If after three years, the producer’s book equals only $50,000, the agency has lost at least $150,000 over three years. Training is a bargain compared with failure!