Once you hire or inherit employees, you extend your role from an insurance agent to an employer. Now you are responsible for someone else’s career, as well as your own. To perform this role successfully, you must assure that the employee is properly trained, given the tools to do their jobs and are treated with the respect, authority and responsibility they deserve to earn their compensation and be satisfied with their roles and positions in your agency. Too many agents still treat their employees like clerks and personal assistants, telling them what to do and when to do it, not giving them the latitude and responsibility for which most of the employees are trained. These are people who own homes and property, make investments, raise children and educate them. We ask them to ‘check their brains at the door’ – they won’t need them until they leave at 5:00 PM. The happiest employees are those who are treated with respect for the knowledge that they have accumulated. They are responsible for their jobs, certainly are managed to the expectations of the agency and the customer, and are honored for their roles.
If you get to the point of hiring producers, your role expands further into that of a sales manager. No, you don’t hire a producer and tell him to ‘go ye out and sell insurance’. You don’t give him the Yellow Pages or tell him to sell insurance to his friends and relatives. Most agents know that is a recipe for disaster – failed producers and a terrific expense to the agency for as long as the agency can support the producer. Successful producers are giving training, as needed, specific expectations of the job and the marketing and advertising support to provide them all the prospects they need. Their role is to develop relationships with the prospects that cause the prospect to trust the agency to do a better job protecting the clients’ assets for them. They get the prospect to TRUST the producer and the agency’s capabilities to protect them. Their function is NOT to troll for prospects and face the rejection normal to that role.
All of these subjects are critically important to an agency owner’s primary goal of supporting him/herself and their families. In order to accomplish that we must balance revenue with expenses in order to create a profit that allows us to earn a comfortable lifestyle AND to create value in the business asset that will eventually become our retirement vehicle (or add to our estate value).
The lesson to be learned in this ‘Management 101’ class is that smaller agents must balance GROWTH OF CLIENTS, RETENTION OF CLIENTS, and PROVIDING FOR ALL OF EVERY CLIENT’S INSURANCE NEEDS, the customer oriented priorities of the agency with nurturing the employees (including producers) and establishing and paying attention to the carrier needs – all while learning how to budget for profits.
Larger agencies, whose owners are smart enough to develop the agency, will hire managers to handle these priorities and the owners will dedicate themselves to their favorite role in the agency. Sales managers are hired to manage growth and the producers into ever-growing books of business. Operations Managers are hired to manage customer service, employee development and retention of business. Financial Managers are hired to evolve the budget into an Agency Strategic and Tactical Plan including the budget that assures profitable operations every year.
Most agencies still stay small. They may talk about growth, but the owners aren’t really comfortable doing the things necessary to accomplish that growth, many blaming everyone and everything but themselves for their lack of success. Even most agencies that grow do so very painfully, not hiring support staff until customer crises arise and not hiring management until frustration with dealing with employees overcome the owners.
That’s why only a relatively small percentage of agencies ever evolve into professionally managed businesses generating millions of dollars of revenues, double-digit growth every year, expansion of geographic and business scope beyond the expectations of even the owners and profits that result in extraordinary business value on behalf of the agency owners.
It doesn’t have to be that way. It begins by paying attention to the Revolving Door of agency priorities in equal proportion.
First, make sure that every customer is satisfied and likes you.
Second, while still maintaining customer relationships that grow and retain your revenues, evolve competent, responsible staffs that are trusted to do their jobs, but are managed so they know that you know everything that is being done.
Third, create relationships with your carriers with the same intensity and honesty as you do with your clients. Never lie or exaggerate what you can do for a carrier. Under-promise and Over-deliver so the carrier sees you as a profitable growth, oriented agency.
Fourth, bring in and mentor producers as if they were your children. Nurture them and give them every opportunity to succeed by establishing agency marketing programs that bring a constant flow of prospects to the door.
Finally, love and respect them all customers, employees, carriers, producers but remember your first obligation is to yourself and to your family. Operate at a profit EVERY YEAR. Pay yourself for what you do as fairly as you pay your staff for what they do. Profit is not a part of your paycheck. Your paycheck is compensation for your productivity. Profit is the additional money that you are to use to support your business growth and value.
Reprinted from the PIPELINE, the national newsletter for agency principals. The PIPELINE is published by Agency Consulting Group, Inc., a leading consulting firm for independent agents in the U.S. for over 20 years. Call 800-779-2430 for information about the content of this article or PIPELINE subscription information. E-mail info@agencyconsulting.com – Website www.agencyconsulting.com
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