THE THREE TYPES OF PRODUCERS
All can be “successful” in a way
Although they may receive a
handful of referrals from a few clients,
[general practioners] mainly sit in the office
“waiting for the roast duck to fly into their mouth.”
By Roger Sitkins
After hosting more than 175 producer-training programs attended by more than 5,000 producers and personally coaching hundreds of agencies, it has become clear to me that there are three types of producers: Order Takers (OTs), General Practitioners (GPs), and Subject Matter Experts (SMEs). Most agencies reflect all three producer types. Which one are you? If you’re an owner, can you identify your producers by type?
These are the “quoters and floaters” who aggressively wait for their phone to ring or their computer to ping so they can have additional opportunities to practice-quote commodity-based, price-only selling. They’re easy to spot once you recognize their characteristics. For example:
- Their closing ratio is less than 25%.
- They’re in a race to the bottom.
- Their books of business seem destined to plateau at approximately $200,000 of gross commission income.
Also, they suffer from what I call the “2-2 Syndrome”—too many clients pay them too little revenue each. A high percentage of their clients are part-time, and therefore they write only one or two policies for them. They retain fewer than 90% of their clients, in part because they focus on transactions versus relationships.
Besides having part-time clients, order takers (OTs) are part-time producers. Typically, they are stuck in the Red Zone (a.k.a. The Service Trap) because they tell all of their customers to “call me if you need anything.” Rather than anticipate their clients’ needs, OTs respond to what customers say they want (“You want workers comp? Okay.” “You’re looking to buy a homeowners policy? I can do that.”). They offer no proactive risk advice.
You can also recognize an OT by their pipeline. Their pipelines are barely dripping, not overflowing. What’s more, they receive referrals from fewer than 10% of their customers because they rarely if ever ask for them. They often use the ITB excuse—I’m Too Busy—for not building their pipelines. Busy doing what? Busy hiding behind activities?
At the end of their career, OTs face a lot of regrets when they realize they never came close to becoming their Best Version Possible.
In any profession you can think of, specialists always make more money than general practitioners (GPs). However, in our great business, GPs can do pretty darn well, even though they haven’t identified their minimum account size and targeted account size, and they ignore the 80/20 Rule when it comes to their book of business. Eventually, their book reaches $400,000-plus and then they plateau.
To them, every opportunity is worth pursuing. Because their agency has access to most markets, they go after just about every potential account they encounter. They’ll chase anyone who wants a quote. Furthermore, they don’t have a truly unique, documented, and repeatable sales process. Winging it works for most of them. The old way of “look, copy, quote and pray” generates average results, which is fine with most GPs. Certainly, they don’t conduct a risk survey on their commercial accounts.
GPs don’t have many points of differentiation. In fact, their idea of distinguishing themselves from the competition is to tell potential clients, “We give great service and can save you money.” With a closing ratio of around 33%, they truly are jacks of all trades and masters of none.
Like OTs, GPs’ pipelines are dripping at best. Although they may receive a handful of referrals from a few clients, they mainly sit in the office “waiting for the roast duck to fly into their mouth.”
Having said all that, let me add that there is no shame in being a GP! However, it’s tough for them to get their book of business up to $1 million of gross commission income. The sad reality is that at the end of their careers, GPs won’t be financially free to do whatever they want to do. While they may seem well-off to the rest of the world, they don’t have the financial freedom to do some of the things they thought they’d be doing when they retired.
Subject matter experts
Subject matter experts (SMEs) are the producers who refuse to be GPs because they don’t want to be caught in that trap. A few years ago, I read a trade journal article that said a whopping 92% of top producers under the age of 40 were specialists, not GPs! What does that tell you? It tells me that it’s very difficult to build a big book of business unless you’re a SME because you can’t be an expert in every existing class of business.
All of the producers we work with who have over $2 million of gross commission income are SMEs. Our largest producers, those with over $5 million, have only one or two specialties. These producers know their industries and classes of business at a very deep level. But despite being extremely knowledgeable about their business, they don’t talk insurance and risk management exclusively.
They discuss how to positively move their client’s or future ideal client’s business forward. You’ll never hear them say, “Now tell me a little bit about your business,” because they already know all about it. They truly understand what makes the business tick because they’ve thoroughly researched the company, as well as the industry, before the introductory meeting.
Not only are SMEs active in their industry and related professional organizations, they are also positioned as the go-to producers in their specialties. They have identified the top three risk-related problems their specialty classes of business face, as well as the solutions that are available and that they can provide.
Because all of their clients are relationship-based, they are members of their clients’ trusted advisor team. As such, they get to know their best clients’ other trusted advisors and communicate with them. In turn, these trusted advisors also become centers of influence for the producer.
SMEs are diligent about building and developing their High-Performance Teams (HPTs). They continually educate their service people about the latest developments in their clients’ specific business sectors. Their service people understand the classes of business completely because, like the producers, they are not GPs. Instead of handling 15 different classes of business each day, they’re handling one or two. As a result, they understand the clients’ coverage needs and can react quickly to their requests.
Because these HPTs work so well, SME producers are in the Green Zone 80% of the time. (In case you’re not familiar with the term, the Green Zone consists of four key activities: sales, relationship management, continuations, and pipeline development.)
The bottom line
I’m sure many of my long-time readers are saying, “Yes, I know that, Coach!” That’s terrific, but are you putting it into action?
The highest-performing professionals already know what to do. They also realize that knowledge is just the first step to success, and that consistency is the key. They consistently do what they know they should do. They understand that knowledge is great, but that acting on that knowledge is better.
Don’t be the OT or GP that says, “I know, I know, I know.” Be the SME that consistently does what they know they should be doing. They’ve chosen to hold themselves to a higher standard than their competitors. Will you make the same choice? n
Roger Sitkins is the CEO of Sitkins Group, Inc. After over 40 years he has truly become an icon in the insurance industry having trained and mentored thousands of insurance professionals.
Roger was inducted into the Michigan Insurance Hall of Fame in 2017 and in that same year also received the Dr. Henry C. Martin Award from Rough Notes magazine. Roger is among only six people to have the honor of receiving this prestigious award.
Recognized as the nation’s top insurance agency results coach and renowned leader for improvement, he believes that if you improve the life of one person, you improve the world. To learn more, visit www.sitkins.com.