A proven method for giving your producers every opportunity to sell.
Producers fail because of either a lack of sales skill, a lack of organization, a lack of drive, or a lack of management. If you’ve hired a producer who can’t sell, shame on you! Testing would certainly have proven that point. Many people can sell themselves to you, but not your products to your customers. That same testing would point out weaknesses in drive and organization capabilities, as well in sales ability. However, no amount of testing can correct poor management that causes a producer to fail.
Only you, as agency owner or sales manager, can correct this situation. If you wonder how often this occurs, think back to producers you’ve known who have succeeded at their last agency only after a few previous failures. If they could sell enough insurance to support themselves and their agencies where they finally landed, why wouldn’t they have been able to do the same in their prior agencies? The answer, invariably, is the lack of direction and management at those prior agencies.
The solution: Provide each producer with every opportunity for sales.
HAVE YOUR AGENCY GENERATE LEADS
First, it’s the agency’s responsibility to find and provide its producers with enough qualified leads to assure success. No producer should ever claim that they didn’t have enough prospects. Giving a producer the phone book and pointing to the business listings is not the same as providing leads. Qualified telemarketing firms charge high rates ($20-$40) for leads, but guarantee their quality and will replace disqualified leads at no further cost. (By the way, this is how to qualify telemarketers. They won’t be in business long if they adhere to a replacement guarantee and continue to provide bad leads). Wouldn’t you be glad to pay $40 or more for a lead if you knew that it was a qualified one, with the sale depending on the quality of the sales effort? Producers spend most of their wasted time trying to generate qualified leads. We hire them for their sales skills, not for their prospecting skills. You’ll always make more money on producers who spend their time selling products to prospects rather than trying to find those prospects.
IDENTIFY PRODUCER ACTIVITY NEEDS
The next part of effective management is to help the producer identify what level of activity they need to meet their compensation objectives (together with the agency’s revenue objective and validation of the producer’s draw). This process begins with the producer’s salary or draw and expected commission level (if any) above draw. Estimate the producer’s renewal commission, and reduce the total compensation expectation by this amount.
The remainder must come from new business. If the producer has a sale track record, use it to identify their average commission per sale (if not, use the agency’s average commission per sale last year). Divide this average into the new business requirement to identify the number of sales needed. Next, set the number of prospects who must be given proposals achieve the required number of sales. Then identify the number of sales calls needed to achieve the required number of proposals. Finally, identify the number of prospects who must be contacted to achieve the number of sales calls required.
Test each of these numbers based on the time available by the producer for these efforts. If you and the producer agree that the number of prospects to be contacted, sales calls (many prospects will require multiple sales calls over an extended period before permitting a proposal), proposals, and sales are realistic, you have entered into a mutual contract for services by the producer. The agency is to provide the leads, and the producer is to carry out all the required visits and sales.
The final step is to monitor and manage the producer’s efforts.
MANAGE PRODUCER ACTIVITY
Nothing proves the value of a producer more than verifiable activity levels. Agency Consulting Group, Inc. clients require weekly activity reports from all producers as a condition of compensation. In other words, your paycheck follows the submission of your Activity Report — no excuses!
The Activity Report will usually have these categories:
- Prospects contacted (contacts = calls completed to the decision-maker)
- Prospect contact goal (from the goals set above)
- Sales Calls (detailed by the visit made). Sales calls made to prospects are to include prospect name, contact name, phone number, results of call, next activity for prospect, and date of next activity
- Proposals (detailed list of each proposal made that week) with results of each (Sold: Y/N/Pending; If Sold: Premium and Commission)
This report tells the agency manager how much pure sales activity the producer accomplished in the prior week. If a producer can only manage three or four sales calls and two or three prospect calls in a week, it becomes quickly apparent that they can’t live up to their new business goals contract. At this point, the owner must determine whether the producer should be an account executive (servicing their pre-existing book of business) or whether enough non-sales work can be eliminated to permit a pure sales function again.
"Managing" is a verb. It must be done proactively. If you spell out expectations of performance, as well as the results of nonperformance, it need not involve emotional outbursts.