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Customer Service Focus Compensating CSRs—Think outside the box Inventive reward systems increase productivity By Gregory Wassberg, CIC Finding and retaining good employees can be one of the most difficult tasks an agency owner faces. I have found that an agency often loses a great CSR to a competitor for just a “little bit” more money. The owner then has to ask, “What could I have done?” Two options for such an owner are cash bonuses and non-cash rewards. We use these options in our agency, and they work well. Goal The goal of the program is to provide an incentive for CSRs to “think” when they field a phone call from a new client or deal directly with someone who comes into the office. We want the CSRs to “buy into” our agency and believe that they are helping the agency grow. Option 1: Monetary Bonus System • Each CSR is awarded one point for selling a new customer a homeowners or auto policy. Our agency believes that these lines are the most important ones to our personal lines department. • Each CSR is awarded three points for selling the new customer a homeowners and auto policy at the same time (otherwise known as a package). Our ultimate goal is to write every personal lines customer’s home and auto. We believe that if we write both lines of business, the client is more likely to renew with our agency. • Each CSR is awarded one point for selling an existing customer any additional personal lines policy with the exception of a personal umbrella. This gives the CSR an incentive to round out accounts when talking to an existing client. • Each CSR is awarded two points for selling a personal umbrella policy. (The greater incentive is to reduce the agency’s E&O exposure.) All too often we have experienced claim situations where the insured needed an umbrella policy and had not been offered one. With any high-end client, we require the CSR to document that an umbrella policy was offered. This is not a part of our bonus program, but is a firm agency policy. Our agency’s cash bonus program rewards CSRs when they achieve 50 points. The reward is $500 after tax. (We treat the reward as regular salary for accounting purposes. The employee will receive only a W-2. No 1099 is needed.) The reward actually is about $600 since we take out all taxes before issuing the check. We have found that 50 points typically averages around 40 new policies. One new policy averages $800 in premium or $120 in commission (15%); 40 new policies equate to $4,800 in revenue. The $600 bonus is 12.5% of the total revenue, which should be much less than we would pay a producer by making a commission split. Note that we reward only new business. We do not extend the reward program to renewal business. One concern I had when we began this program was, “What if a policy is canceled before the expiration date?” I amended the program to ask the CSRs to self-monitor their performance. If we paid them for a policy sold in the previous 50 points and that policy later was canceled, the CSR would subtract that point from the next reward point total. In this example, the CSR would effectively sell 51 points to earn the next reward. A personal lines manager could monitor the program, but we believed that self-monitoring was a trust issue, and the CSRs appreciated the trust we placed in them. If we suspected that a CSR was taking advantage of the program, we would deal with that CSR on an individual basis. From time to time we have increased the incentive to encourage CSRs to place business with certain carriers. For example, we wanted our CSRs to sell 12 policies a month with a certain carrier. If a CSR was successful, we would award an additional 5 bonus points for that person’s hard work that month. Obviously, if placing business with that carrier was not in the client’s best interest, the CSR would not direct the business to that carrier. Commercial Lines • Each CSR is awarded two points for every new line of coverage he or she writes for an existing client. We believe this encourages our CSRs to do a better job of rounding accounts. Examples are when a CSR convinces the client of the need for a boiler and machinery policy or an umbrella policy. • Each CSR is awarded 10 points for every account he or she writes over $10,000 in premium, up to a customary maximum of $40,000. We find that our CSRs receive referrals from existing clients all the time. Quite often the referral would just as soon talk to the CSR as have a producer call. • Each CSR earns a percentage reward for every account written over $40,000 in premium if the referral came from the CSR. For our agency, a $40,000 account generates, on average, 12.5% commission. This equates to $5,000 in revenue. Option 2: Unique Reward Ideas As stated earlier, an agency that wants to thrive must create unique incentives for CSRs. Cash awards or bonuses are ways to compensate CSRs for good performance, but agencies need to think outside the box to offer additional incentives of interest to CSRs. In our agency, personalized services are offered as rewards for good performance. I firmly believe that the personalized services go much further than cash awards and bonuses. While the kinds of services offered will vary from one agency to another, I personally like the following services: • Preferred parking. Designate a front-row parking spot for an employee of the month. Just as it does for you, a modest honor creates a feeling of high self-worth for a CSR. • Window or aisle office space. Similar to the preferred parking reward. Have a “prime” location workstation and rotate occupants based on great customer service. • If CSRs receive only 30 minutes for lunch, offer to cover their desk (usually means answering their phone until they return) for an additional half hour. This gives them an hour lunch. • Extra days off. I believe many agencies are currently using this method. It seems to work for most agencies. • Lunch with the boss. Most CSRs will be pleased to be invited to join the agency owner or principal for lunch at a nice restaurant. This is also an opportunity to strengthen the relationship between the owner and the CSR. • Transfer “headache” accounts. In your agency, you are probably aware of the “headache” accounts. Try moving these accounts around. Make this transfer a reward when a CSR does a great job. • Wash the CSR’s car. Imagine an agency owner washing an employee’s car late one Friday afternoon. If you don’t think your employees would instantly get excited about this, you’re kidding yourself. • Offer to babysit for the CSR’s children. In providing this service, safety is paramount. In many instances you would just cover the expenses for the employee’s existing babysitter or day care. • Ask the CSR for a list of errands he or she needs to run during the week and run those errands yourself. • Dry cleaning services. Have a local dry cleaner schedule a day each week to pick up and drop off dry cleaning. This gesture saves CSRs valuable time and reduces before- and after-work stress. These bonus ideas have proved very successful for our agency. I maintain that they will work for any agency—perhaps with some variation. Remember—happy employees are successful employees. * The author |
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