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Mentoring For Agency Growth
According to Webster's, a mentor is 'a loyal advisor entrusted with the care and education of a student ... a wise and trusted counselor.' In my experience, a mentor without these qualities can't successfully lead a rookie. Whether an agency's mentoring program succeeds and produces financial rewards depends on how it's structured and managed. I'll address methods for setting up a successful mentoring program for agency growth, including: Mentor-rookie matching Training schedule Compensation options Program monitoring and management MENTOR-ROOKIE MATCHING It's key to put together two people who are compatible. Most mentor relationships last 18 to 24 months. If mentor and rookie don't work effectively together or don't like each other, the relationship most likely will fail. An important tool in forming this team to give both participants a personality test. The test should cover communication styles, preferred working styles, motivational needs, and work ethic. The test I like is called Personalysis. The Mentor Let's examine the qualities of a successful mentor. I recommend setting a minimum book size to qualify a producer to become a mentor. The mentor should be one of the top producers in the agency, not whoever has free time to work with a new salesperson. Only the best should be teaching! A mentor must make a long-term commitment, usually two or more years, to working with the rookie. This individual should have a real vested interest, not just in his or her personal financial gains, but in the agency's growth and prosperity. A mentor should have patience and the ability to communicate and must accept the training structure and management involvement necessary to make the program successful. The Rookie The rookie should have a burning desire to become the best producer in the agency and be willing to put in long hours learning insurance, sales skills, strategic partnering with clients and prospects, specialty products and/or programs, and every aspect of the agency operations. The rookie also needs to understand that the initial compensation might not be comparable to the level and amount of work contributed to the sale. I usually recommend that one rookie work with one mentor. It is difficult to answer to two masters. After you make the match, you need to analyze training needs. TRAINING THE ROOKIE Effective training is not putting the rookie in a room with books, manuals, underwriting guidelines, applications, prospect leads, and a telephone for several hours or even a week. If the rookie is new to insurance, my rule of thumb is not to give them more than two hours of reading at a time. Most salespeople become bored and restless if they're left to study longer than that. Plan Here's how I like to plan their training: First 4 weeks: every hour is scheduled-no free time Next 4 weeks: 80% of their time is scheduled Next 8 weeks: 50% of their time is scheduled Next 8 weeks: 30% of their time is scheduled After the first 6 months: activity is reviewed weekly Look in my SalesWizard site at www.saleswizard.com for a sample evaluation and training guide. Training activities scheduled: Increasing insurance knowledge. Even if the rookie came from another agency, inventory their technical knowledge the first week. Shadowing employees in every department to learn how your agency does business. Individual meetings with company underwriters (shadow for a day if possible) to learn what the carrier looks for in a risk. Following a claim from report through payment to insured. Insurance company training school, if necessary. Product training school. Professional designation courses. Accompanying every producer, including those selling products the rookie usually won't be selling, on at least three sales calls to different people. Sales training on communication styles, pre-qualification, relationship building, strategic planning to obtain new clients, obtaining referrals, presenting proposals to individuals and to boards of directors. Attending meetings of and becoming very actively involved in trade associations of prospects that the rookie is focusing on. Training on telephone prospecting. Listening to sales and motivation tapes. Reading industry trade publications and non-industry sales books. Developing a peer group among other agencies your organization is affiliated with. It's easy to develop a rookie's schedule in a spreadsheet. Every person in your agency who the rookie will shadow should receive a copy of the schedule with their involvement noted. You may want to keep the spreadsheet to develop a track for the next rookie. I've found that variety is the key to successful training. Many agencies have lost good producers because they were brought into the agency and left to figure things out on their own. Part of the mentor's responsibility is to make sure the rookie is learning and not losing interest and enthusiasm. COMPENSATION All parties will want to know how they'll be paid. The mentor, the rookie, and the agency all need to be treated fairly. You need to understand the basic sales process to get a feel for the time commitment (which can relate to compensation) that the mentor and rookie make for each prospect. Here's a process that I've seen work very well: The rookie usually is involved with a prospect from the start of the sales relationship. The lead may come from a referral from the mentor, the rookie's cold calling, or elsewhere. I prefer this sales process: The mentor and rookie attend the initial meeting with the prospect. The rookie (who should have a couple of months on the job) attends the second meeting alone to get underwriting information. In the final meeting, the mentor and the rookie present the proposal. After the account is sold, the rookie and service team perform the ongoing service. Only unusual circumstances would reinvolve the mentor in the account. The ideal process has the rookie doing most of the legwork and the mentor sharing the sales skills to open and close the deal. Assuming this is your process, let's look at compensation for all of the parties. The Mentor The mentor must be compensated for time and knowledge. I recommend that the mentor receive full commission on the jointly produced business for the first two years that the new business is on the books. After that, there are some options. Unless the mentor is actually servicing the account, though, I believe that after four years the mentor should no longer receive any portion of the commission for an account produced with a rookie. Here's how it might work: A new account is produced and the commission split is as follows: Year Mentor Rookie House 1 Full1 Salary2 Full3 2 Full Salary Full 3 (option 1) None Full Full 3 (option 2) Half Half Full 4 (option 2) Quarter Three-fourths Full 5 (option 2) None Full Full Salary plus bonus schedule for reaching production goals. Salary plus bonus schedule for reaching production goals. Producers required to give house small accounts below a specified size to help to fund the mentor program. The Rookie The rookie needs to be compensated for their work and to pay for their sales education by giving up full commission. However, they shouldn't have to split commission on the account forever. The House The agency must be profitable, so it needs to fund growth with a mentoring program. This is possible if the agency doesn't give accounts to producers without receiving back an equal value in small accounts. Because the house isn't paying the producer a commission on the small given accounts (only paying for service as it does on all accounts), it has a profit base available to bring in new rookies. Compensation is a very sensitive subject for every salesperson. The program has to be financially attractive to all parties involved to establish a long-term method of agency growth. MANAGING AND MONITORING How long would a university or college last if it had no administrators or managers to work with the teachers and students to ensure the conveyance of knowledge? A mentoring program really provides a process for real-world information to be imparted to another who hasn't yet had those knowledge-building experiences-much like higher education. Who Should Manage The sales manager or owner is the best person to manage and monitor the training and results of the mentoring program. This responsibility requires someone in a position with a big stick in case the program needs to be reinforced. Monitoring the Process Use this schedule to determine what should be monitored by the manager and how often: Weekly Monitor completion of the rookie's weekly training schedule. Monitor prospect activity. Hold individual meetings with the mentor and rookie to discuss progress. Monthly Evaluate progress of the mentor/rookie relationship. Review sales and prospecting activity. Meet with key management people from other teams to determine how interaction with the rookie is progressing. Quarterly Evaluate progress of the mentor/rookie relationship. Hold individual meetings with mentor and rookie to discuss progress. Review sales and prospecting activity. Meet with key management people from other teams to determine how interaction with rookie is progressing. I assure you that a mentoring relationship will not manage itself. If your agency is going to invest in a rookie, be sure you monitor your investment. FINAL THOUGHTS Your mentoring program should succeed if you follow these rules: Hire an 'eagle' rookie (someone who can sell anything and is smart). Match the rookie with a producer who is also an eagle, is willing to commit two years to the relationship, and is compatible with the rookie. Provide technical and sales training. Manage the process. Always be on the lookout for your next rookie!

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Agency Producer Recruiting: Challenges And Solutions
It’s a classic conundrum: As an agency grows in size, it becomes harder and harder for its producers to maintain adequate growth rates. Are you struggling to find qualified sales professionals? This document by Sharon Cunningham discusses recruiting producers from outside the insurance industry. Poor or average agency organic growth rates of 5% to 6% usually result from poor producer recruiting efforts. As an agency grows in size, it’s difficult for a limited number of producers to generate enough revenue to achieve higher growth rates. Agencies with high annual growth (10% or more) achieve those numbers by hiring new producers each year. A productive agency will be hiring at least two new producers every year, and some larger agencies might hire more than five per year. The average age of today’s agency principal is 58. The lack of younger producers coming into the business makes perpetuation almost impossible for many agencies, because the talent needed to perpetuate the firm simply isn’t there. This lack of new producers also makes the agency’s accounts vulnerable when clients transfer ownership or management responsibility to the next generation. The new owners of the accounts will want to buy insurance from their peers, so they might well change agencies if the agency doesn’t have the ability to transition the account to a younger producer. OBSTACLES TO PRODUCER RECRUITMENT During the past ten years, most agencies have implemented employment and non-solicitation agreements. These covenants make it clear that the agency owns the book of business and that producers can’t solicit their customers when they leave the agency. An agency attempting to recruit an experienced producer with a book would need to pay a high starting salary for at least two years until the salesperson validates. Strong non-solicitation agreements make it almost impossible to recruit good producers away from their current employers. What are agencies doing to solve the shortage of sales talent? What do principals see as their top recruiting challenges? Business Management Group conducted a survey of Property/Casualty agencies to address these issues. When asked to describe their top three recruiting challenges, 57% of respondents saw a lack of qualified producers as their main problem. Designing an effective producer compensation program came in second at 19%, and developing an effective recruiting strategy ranked third at 13%. HIRING PRODUCERS FROM OUTSIDE THE INDUSTRY Many agencies are looking at alternatives to attract and develop high performing producers. Hiring outside the industry has become a key recruiting strategy to identify aggressive sales professionals who are capable of achieving exceptional results. Our survey found that 67% of the respondents recruited producers from outside the industry. Of those hired, 27% had financial services backgrounds, 27% were college graduates hired from college recruiting programs, and 23% possessed strong sales backgrounds. I asked the presidents of three successful agencies what key factors contributed to their success in producer recruitment. 'We look for individuals with sales backgrounds who have achieved exceptional results. They must also have a strong work ethic and fit in with our sales culture,' said Kenneth Kirk, president of Brown and Brown (Phoenix, AZ). Three of the agency’s most recent hires came from backgrounds in sales in health care, sports management, and newspaper advertising. 'In the beginning it was difficult to identify candidates, but once we established a profile and began networking, we were able to identify these individuals,' noted Kirk. The agency’s success ratio for hiring producers from the outside has been around 50%. According to Brown, 'Success of others breeds success, and we find the new producers are referring their friends and others to the program.' Walker Sydnor, president of Scott Insurance (Lynchburg, VA), spends most of his time networking to identify individuals who would fit well with the organization and its sales culture. Notes Sydnor, 'Our business is about talent. There aren’t any short cuts to finding quality people. We spend a lot of time on the front end making sure the candidate fits our profile and possesses the skills to be successful. Our interview process is very intensive. Producers will go through several interviews with key personnel before we go to the next step in the interviewing process that includes testing. We not only hire producers with non-insurance sales backgrounds through networking, but also actively recruit at colleges.' 'We’re always recruiting at Seitlin,' comments Stephen Jackman, president of the Seitlin Agency (Miami and Fort Lauderdale). 'Our people are our strength, and we look for the most talented individuals.' said Jackman. 'Rather than hiring retreads, we go outside the industry and then train them in P/C insurance.' Seitlin is on its third generation of hiring P/C producers from outside the industry. The agency has hired five producers with banking and accounting backgrounds who are achieving exceptional results. Says Jackman, 'We look inside and outside the industry for high energy, creative individuals who can solve problems and thrive in an entrepreneurial environment.' KEYS TO PRODUCER DEVELOPMENT All three presidents agree that before recruiting and developing producers from outside the industry, an agency must provide the new salespeople with exceptional levels of support, training, and mentoring. Kirk points out, 'we have above average service and support staff in account executive and customer service representative positions who work closely with the new producer to train them in our business. We’ve also developed a training program that’s structured to meet the individual’s needs and we assign each new producer a mentor.' 'One of the unique aspects of our mentoring program,' comments Jackman, 'is that we reward the mentor for their efforts and results by paying them 10% of new business revenue produced during this three-year period.' During the last five years, Seitlin has enjoyed annual growth of 16%, and grew 26% during the last year. Stephen commented, 'We establish high goals and hire producers with the expectation that the individual will produce four times their draw in new revenues during the three-year validation period.' 'Providing sales management, coaching, and monitoring results are key factors attributing to successful producer validation,' added Sydnor. Eric Koroneos, the agency’s senior vice president and sales manager, spends most of his time working with new producers to ensure that each producer has a structured training program that includes an orientation to each department and a mentor assigned to them. Koroneos also works with the producer to develop a sales and marketing plan and reviews their weekly schedule and activities. The agency has set up accountability groups for experienced producers who meet bi-monthly to review their goals and objectives, holding each other accountable for results. Having an effective strategy for recruiting high growth producers plays a critical role in your agency’s success. Before recruiting begins, be sure to have all of these components in place: A well defined job description A validation schedule A clear and specific candidate profile A sales plan An attractive compensation plan A training plan A strategy to generate leads for likely candidates Producer mentoring and coaching An effective interview process that includes testing Sales management and service support If your agency is struggling to identify and recruit talented sales professionals, maybe it’s time to assess your readiness to recruit producers from outside the industry!