Tracking down good producers
Weinberg, Michael J
Locating exceptional agents takes skill
It seems that no matter where I go to address agent groups and no matter what topic I am speaking on, the first question in almost every Q&A session is, “Where can I find good producers?”
As common as the question is, the answer is perhaps one of the deepest mysteries in our business (and in many other businesses as well). Everyone is looking for top sales professionals. While I hate to use this column as a means to publicly boast, I can honestly say that our agency has probably hired more unsuccessful producers than almost anyone who might be reading this article. Even those of us who write columns are not immune from failure when it comes to hiring producers.
A well-known industry consultant recently affirmed to me that the success rates for hiring producers have not changed much over the years. Amazingly, about 70% of newly hired producers do not make it through their first contract year, and about 85% of newly hired producers fail within the first three years. With those abysmal statistics, can there be any hope of ever finding new producers who are destined for success? The answer has to be, “Of course!”
The first mistake that I see agencies make is taking on someone else’s failure. How many times has each of us been approached by producer candidates from another agency who assured us-with great certainty-that they could suddenly achieve great sales success if only they could work for a sales-oriented, market-rich agency like ours? Sound familiar? I know that we have been burned all too often in the past from such “losers.”
I’ll never forget the time we hired a producer from another agency that was-without a doubt-a bigger, more successful agency with far more markets than ours. But this agent had a great story of why he failed there and why, with proper financing, he could succeed with us. And my ego allowed me to believe him! I’ll never forget how utterly dumb I felt when the owner of that larger agency called me to ask why I had hired his producer. I’ll never forget his words: “Why didn’t you call me before you made a mistake and hired him? Did you really think that you have something to offer that we don’t?” And to make matters worse, we had not one but two similar hires at the same time!
Another caution is to be wary of producers who come from employment agencies. (Before I get lots of hate e– mail, we hire our support staff through an employee agency and it works wonderfully for us.) Any producer who is capable of producing insurance doesn’t need to go further than his or her phone to get a job. Virtually any decent sized agency will jump at the chance to hire a successful sales person with a track record. So, almost by definition (and there are certainly some exceptions), any agent who needs “help” in getting a job probably has a problem.
The second problem I have with hiring producers through employment agencies is that the agency will typically charge an upfront fee based upon the amount of money that you agree to pay the new producer. No matter how you classify it-salary or draw-any money that you pay a new producer is an advance against future commissions, and that is a loan. The better the candidate looks, the more you will have to “loan” and hence the larger the fee that you will owe the agency Somehow, I have a problem paying an employment agency for the opportunity to lend money to a stranger-money that, by all odds, I am unlikely to ever recover! Recently we thought that we had worked out an arrangement with a large national search firm that would protect us (in terms of their fee) against hiring unsuccessful agents. But as quickly as we made the deal, they ran off with our money after one very unsuccessful engagement and refused to live up to their contractual obligation.
So-where do we go to find successful producers for our agencies? There are a couple of possibilities, but none of them comes cheaply:
1. Find successful agents who are unhappy with their present agencies and buy their books of business. Most producer-driven businesses show primary loyalty to the agent who sold them their coverage and not to the agency that services it. If you have an unhappy producer who is leaving his or her agency, the odds are that most of the business will leave as well-even if a non-compete is in force. (The agency can’t force the client to stay.) So, any smart agency owner who is losing a producer should be agreeable to a fair sale of the book rather than waiting around and losing it without compensation.
2. Hire the most successful agents you can from another agency who have non-compete agreements and pay them whatever it takes to get them even though they are coming without a book of business. A winner is a winner, and even if they have to start over again they will still be a winner!
3. Find people who have had success and exposure in another industry and them pay them whatever it takes to bring them into your agency. As a result of the Enron scandal, thousands of accountants from Andersen will be pounding the pavement. By and large, this is a very bright group of men and women who have great exposure to the business world and often have invaluable contacts. Through no fault of their own they will be looking for work. These are the kinds of professionals that you want to grab as quickly as you can.
4. Look for people who are used to dealing with wealthy customers. I always loved the idea of hiring a salesperson from a high– end clothing store. They usually present a stunning appearance and are very comfortable selling to the affluent.
5. Hiring directly from college campuses is still a popular method for many agencies. Don’t waste your time unless you can offer a reasonable salary (vs. a draw) and a very disciplined, long-term training program. Managing GenXers is certainly a challenge for senior management. The mindset is different from anything we have ever experienced. (I was recently talking with my son Todd and asked him what he wanted to do when he graduated from college. He replied, “I’d like to be the CEO of a major national corporation.” “No”, I replied, “I mean what do you want to do when you first get out of school?” And he replied, “I am talking about when I first graduate!”)
Good luck with your search and hiring process. If you have any ideas that have worked for your agency, please e-mail them to me so that I can share them with our readers.
Michael J. Weinberg, nationally known columnist, speaker and seminar leader, is the managing director of Gateway Insurance Agency where he spearheads the agency’s marketing/sales and automation efforts. He invites reader participation and feedback through his e-mail address (email@example.com).
Copyright Rough Notes Co., Inc. Jun 2002
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