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Do you have a sales culture that loves to win, that celebrates new business and creates raving fans among your clients?

 

 

 

 

 

 

 

 

 

 

 

Winning Strategies

What's it all about: Winning or making money?

The winner is . . .

By Roger Sitkins


When we started out as producers in this great business, most of us were told, "You can make as much money as you want to make!" and everyone would get really excited about it.

Along those lines, I always ask attendees at our Producer Training Camps, "How many of you would like to make more money? Who wants a raise?" Naturally, everyone raises a hand. That's when I tell them, "Go ahead and give yourself a raise—go sell something!"

In reality, if it were strictly about making money, every producer would have a $1 million-plus book of business. However, studies show that even in the highest performing agencies, the average producer has about $560,000 gross commission income on his or her book of business. That translates into approximately $175,000 to $200,000 per year for the producer. Assuming they're working 2,000 hours per year (which I'll admit is a big assumption), they're making around $100 per hour.

If you buy into the idea that "you can make as much money as you want to make" in our industry, guess what? Most producers don't want to make that much; they don't want it enough! Apparently, they're happy where they are and they just don't have the desire to make more.

Motivation & compensation

So what does motivate top producers? That was the topic of discussion after a recent round of golf with two of our most successful members. They both agreed that when it comes to motivation, it's not about the money. "The money comes later," they said. "It's about the thrill of the hunt; it's about winning the game!"

That made me wonder: Is it about winning or is it really about making money? Which one is more likely to motivate producers and result in more sales?

If compensation incentives (i.e., money) really worked, sales management would be very easy. For example, you could change your compensation and pay a higher rate on new business (40-50%) versus renewal business (20-25%). Or after producers have met their goal for the year, you could pay 100% commission on anything they write over and above that for the policy's first year. After that, producers would receive their regular renewal commission. That would be a phenomenal incentive, don't you think? That way, if every producer's goal was to do $200,000 a year in new commission income, they'd turn around and do $250,000 knowing that they'd get 100% commission on that extra $50,000. Who needs more motivation than that?!

The truth is, I don't believe I have ever seen incentive compensation programs improve sales results and we've tried hundreds of variations of that. The concept simply doesn't work.

We've found that motivation starts with an agency's hiring system, not its compensation structure. Are you hiring people who are properly internally motivated and who love to win? Are they competitors who just love the game? The key is to find out what motivated them in the past. Identify a time when they really got excited about playing a game or winning a competition. I don't care if it's football or tiddlywinks; the bottom line is, do they want to compete?

A recent study showed that even in the highest-performing agencies, fewer than 15% have full-time sales management. So how do they get along? Beyond hiring the right people, they seek out the SMAPs: Self-Managed but Accountable Producers. If you have a long-time producer whom you still have to babysit, that producer needs to go! Those kinds of producers are kidding themselves if they think they're producing—and they're kidding you, too.

The agency PTA

In order to succeed, you really need a PTA at your agency—and no, I'm not referring to a Parent Teacher Association—I'm talking about the Process, Training and Accountability that you'll find at all the best firms.

Process. This is the unique selling system that we expect all producers to follow. It's what drives the value proposition that differentiates you in your marketplace. When we say we expect the producers to follow it, we also often use the term "flexibility without dilution." By that, we mean that it's okay for producers to build some of their own style and personality into your selling process. However, we don't want them to dilute the power of the process by taking out the "stuff they don't like." Normally what they take out is the most powerful part of the process!

During one of our members' quarterly sales retreats, their top five producers were asked to explain why they were doing so well and how they were running the process. Every one of them had something different to say. Each had built his or her own personality into the process, which capitalized on their individual strengths and skill sets. Even though they were all different (because everyone is unique), they were all the same in that they were all focused on the Risk Reduction Approach™.

Do you have such a process in place, and do all of your producers follow it? And of course, the process can't be Look, Copy, Quote and Pray. (Yes, you've read that before, but what have you done about it?)

Training. Do you have an ongoing training program that supports the selling process and are you training to the point that your producers are consistently outlearning their competition? In other words, are you getting better faster than your competition? Keep in mind, training is not about going to a three-day sales training program and returning to the office to forget it all and do nothing. It's about holding regularly scheduled meetings that make every producer leave as a better producer than he or she was at the start of the meeting.

Properly conducted sales meetings should leave producers feeling enlightened. They should walk away from each one having learned, reinforced or fine-tuned something that will help them improve their performance. Conversely, if your sales meetings are mainly forums for complaining about what the insurance companies are doing, that's not productive.

Accountability. Do you have a system that tells you whether or not your producers did what they said they were going to do? We have found that the best way to do that is through a Reverse Performance Management (RPM) system, which makes producers upwardly accountable to sales management.

Typically, sales managers seem to never have time to prepare for their monthly meetings with individual producers. Instead, they usually ask producers to tell them what they did and what's going on without ever really discussing the strategies and behaviors that drive results. RPM eliminates this problem.

With the RPM system, producers must come in on a monthly basis and upwardly report to the sales manager their results from the previous month, as well as what's in the pipeline for the coming month. The entire agency uses a specific agenda that outlines exactly what items each producer must report to sales leadership each month.

We find that, while most producers hate getting ready for these meetings, they all agree that they're invaluable. It forces them to sit down and examine their numbers, as well as all the other items on the agenda. As a result, they understand exactly where they are, how they're doing and whether they have done everything they said they'd do. They wouldn't get that from a typical sales meeting with the boss.

The bottom line

All of this comes back to the theme of Winning Strategies where WIN = What Is Normal? What is normal in your agency today? Do you have a sales culture that loves to win, that celebrates new business and that creates raving fans among your clients? Or do you have a group of producers who simply don't want "it" enough (the money or the win) and who are just happy where they are?

Whatever is normal in your agency today is based upon the decisions you've made up until this point. However, what is normal moving forward will be based upon the decisions and strategies that you implement within your agency starting now. It's your choice.

The author

Roger Sitkins is founder and chairman of Sitkins International, a private client group and membership program for some of the top Independent Insurance agencies and brokerages in the United States, Canada, and Latin America. Members participate in training, advising and networking opportunities focused around innovation, sales, growth, profitability and value. Sitkins International is inventing the future of the independent insurance system by providing intellectual property that empowers agents and brokers to become the innovators.

   

 

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