Andrew Carnegie said, "An average person puts only 25% of their energy and ability into their work. The world takes its hat off to those who put more than 50% capacity, and stands on its head for those few and far between souls who devote 100%."
By Kristin Woods, CSE, CIC, AAI
Andrew Carnegie said, "An average person puts only 25% of their energy and ability into their work. The world takes its hat off to those who put more than 50% capacity, and stands on its head for those few and far between souls who devote 100%."
While the wealthy industrialist/philanthropist quipped this a century ago, the statement rings true in this new century in the perpetual search to recruit "good" producers for the property/casualty industry. Agency principals are feverishly scouring the landscape for the person who will place in the 100% category!
While I have no hard and fast numbers of how many new producers join our ranks each year, I can say with certainty that very few producers are being added to independent agencies and for those who are, one of two things often happen: They stay long enough to get a good start on a book and then join a "higher profiled shop" or they languish for three to five years in the land of production mediocrity before leaving the agency or the industry. Neither really makes sense, but we seem to repeat the story year after year. There certainly are success stories that differ from this scenario, but not enough to waive the concern.
Many issues furrow the brows of independent agency owners today, including carrier consolidations, companies exiting a state, the soft market, declining agency revenues and agency perpetuation. As a result, the recruitment of solid new producers doesn't always garner the attention it deserves. However, unless there is a son, daughter, grandson, granddaughter, niece or nephew in the wings, or the agency is to be sold or merged, perpetuation is rarely carried out without solid producers in the ranks. Quite frankly, perpetuation issues are often resolved through the results and relationships of top-notch producers.
Part of the reason we don't seem to attract enough new sales professionals to our industry is that they are a different breed than many of our current agency principals. Many agency owners have shared with me over the years that this "new pup who wants to join their agency has a lot of different ideas on how business should be conducted." Yes, that is true; today's producers do seem to have a different ego drive, a different pace, are often technologically-based, and have different ideas on how to conduct business. That is called change! Let's face it, many of today's customers are cut out of that same cloth, and we must embrace some of that change so that our industry stays vibrant.
Our industry must recruit, develop and retain producers just like any other industry that is evolving--as topsy-turvy as it may feel sometimes. Think just like the CEO of a manufacturing company, a wholesaler, a distributor or an e-business and the principals will fall around your shoulders until the pelts and lumps of change make sense.
Producer recruitment seems to be the Achilles heel of our industry. This can't be rocket science but if we don't find a resolution, the doomsayers will be proven right and the independent agency system will wilt. The direct writers and captives don't seem to have quite the same problems, but then the freedoms of the independent agency system should really draw a different breed of producer--shouldn't it?
Have you checked out the want ads lately? No, I don't mean to find yourself a new position, even though many agency owners I speak with indicate the idea of a second career is sounding better all the time! I mean, check out how many ads there are to recruit producers. Look carefully because the ad won't be a 1/4 page ad or in hefty block print--it will be a small obscure ad; after all, great producers should have to search for opportunities, shouldn't they?
The newspaper ads are filled with the lure of dot-com positions, chock full of benefits and hefty starting salaries! Telecommunication ads run a hot second and look on--pharmaceutical sales and even the auto dealerships are sounding the trumpet for sales people. Keep looking, you may find one ad for an independent agency sales position.
Most industry journal ads tout company positions and agency acquisitions, or there is a blind ad looking for sales people that usually scare off the best of the producers. A survey by The Academy of Producer Insurance Studies indicates that producers find their jobs through want ads 4% of the time out of all their job search methods. The top source--at 32%--was referrals.
So, maybe ads don't make sense because they don't yield tangible results. Or, maybe they aren't effective because agency principals are convinced the best producers aren't looking and ads will draw only the "B grade" candidates. A slight and very effective twist on this concept is to advertise the agency in local papers, journals and business magazines. Make sure every event that is newsworthy hits the press. Sell your agency benefits in each agency proposal because sooner or later it will fall into the hands of the top-notch producer you want to recruit. Don't worry about another agency imitating your proposals--if they are worth their salt, they will already have a "signature" on each of their point of sale pieces. If they don't, it is doubtful they will spend the time or money to duplicate your ideas. Creativity is rarely stolen; it is just what the word says, created!
Of course, my vote goes for the referral method, because my former position with a large independent property/casualty agency was through a referral. I had been selling business consulting services for more than three years before selling P-C across the boardroom table. Nice transition.
Speaking of referrals, why do we always ask company representatives to refer other agency's producers to us? Do we really think the ethical company-bred and born will give us the name of a producer from one of their key agencies? Wouldn't that stifle their own company production? Does this make sense? Here's the scoop: If the producer is one of the best in another agency, you will learn of him/her in the field. That producer will be competing against you on your own accounts and new accounts. The presentation material, as well as the coverages he/she recommends will impress you. Once you lose an account (fair and square) more than three times, that's probably your person, assuming you have similar carrier representation that will allow your new producer to make the same difference in your shop.
One of the most successful agency principals in producer recruitment I have met is Jack Wurfl of Diversified Insurance Industries in Baltimore, Maryland. He says: "I approach good producers directly when I learn of them in the field. I tell them our agency story and ask them to tell me their story. Then, I invite them to an informal breakfast or lunch to see if we can make a difference in their future. There is no shortage of candidates because of our reputation and arrangement for producer compensation. You see, our producers own their own books. In over 30 years, I have only lost two producers; one went on to become a rabbi and the other started his own agency. And, we helped him. Our history together is now part of that agency's future success."
Industry veterans like to think we effectively recruit producers from within the agency as well. There are a handful of success stories about marketing managers and CSRs that are boosted into the position of sales by a nurturing agency principal. The only caveat here is "Let them go from their past position." For some reason, agency principals really try to maximize their agency revenue and double dip the jobs. Rarely does this give the CSR or marketing manager the freedom to succeed in sales.
And, don't forget that sales training is needed as much as technical training. Hats off to every agency principal who embraces CPCU, CIC, CPIA, etc., but don't forget the benefits of non-insurance sales training. Research Dale Carnegie courses, CSP (Certified Sales Professional from Sales and Marketing Executives International; SMEI.org) and sales and marketing classes at a local college or university. Expand the more narrow thinking of insurance sales to broad-based sales thinking that includes relationships, fact-finding, negotiation, communication, technological tools and closing. And, get those personality profiles completed on your sales team, culling out strengths and weaknesses so that you can train, monitor, develop and reward or have consequences based on both.
Addressing programs and producer development, Larry Shoaf, managing director of special programs with Dodge, Warren and Peters Insurance Services, Inc., in Orange, California, says: "We as an industry don't do this well (producer development) because most principals are great sales people. Our agency addresses producer recruitment, training and development two ways: First, we make sure we have more tools to give our producers to take to the market, primarily in the form of unique and proprietary products. Then, we make sure we offer CPCU, CIC and other technical and sales programs within our agency office. We have also retained COMP USA to train our people on technological tools that give them an edge personally and professionally. Over 70% of our producers have been with us more than five years out of a producer base of 50 producers. Our goal is to strengthen that retention and continue to attract new producers to our agency with a goal to double our shop every five years."
So, where do producers go if they leave an agency? I posed this question to four agency principals in different corners of the country and got the same answers--all with a different accent but definitely a common message. A small percentage of producers are simply leaving our industry because it is too tough and there is no customer loyalty. This really doesn't carry much weight because you could repeat that story in telecommunications, pharmaceutical sales, automobile sales and retail. So ... next! Some producers jump into the arms of companies for the lure of benefits and regular hours. O.k., maybe that one is valid. The most common? Producers jump ship to another agency for ownership and equity. Sounds like Wurfl may have an idea that should catch hold. Every agency principal needs to ask, "Whom have I lost just because I don't offer an opportunity for ownership?" If it doesn't put a frown on your face or you don't think you have lost much in the long term, fine. If you do get more wrinkles in your brow or the agency revenue has been impacted--it is time for new or changed thinking.
A small percentage of producers have entrepreneurial juices running through their veins and they start their own agency--usually with the blessing of their past agency principal. This supports growth in our industry and competition can be good.
What type of producer recognition program is in place in the agency? The latest buzzword in sales is "kudos"--a small token of recognition such as a congrats card, a small gift certificate or recognition in the agency newsletter. These are excellent but are rarely repeated once the novelty wears off. An "atta boy or girl" lasts about seven minutes and unless it is shared with everyone in the agency, it has minimal impact. How about a letter to the producer's customers recognizing them for stellar performance? That might impact retention as well as generate referrals. This is a win-win that warrants consideration.
Back to resources--get on the Internet and type "sales recognition" or "motivation" and let your favorite search engine locate a multitude of ideas other owners and managers have found successful. Think outside your own industry and treat your producers like top-notch salespeople in other industries would expect to be treated. And, remember the words of Elbert Hubbard: "The world is moving so fast these days that the man who says it cannot be done is generally interrupted by someone doing it." *
The author
Kristin Woods, CSE, CIC, AAI, is director of sales and marketing for the United Church of Christ Insurance Board. She is co-founder of www.emergingleader.com, the author of $ales $ource (Rough Notes Publishing, 1992), and has written numerous articles in publications such as Business Quarterly, Selling Power, Marketing Times and Executive Marketing. Kris is recognized as one of the "best in the country" in prospecting and has coached many producers in her techniques to make a difference in their careers.