Hiring a producer is one thing; successfully hiring one is quite another. In small and midsize agencies in particular, hiring just one producer can make a big difference, for better or worse. Producers with similar experience and production potential can have completely different personalities and different approaches to makings sales. A producer whose style does not match the agency's can cost it more than the revenue he or she is likely to generate.
Successfully hiring a producer has two parts. First, the producer has to complement the agency's personality. Second, the producer's skills have to match the agency's needs. An agency seeking growth usually needs a producer with great sales skills (a “producing” producer), while another agency may need someone to take over and retain a book of business, not necessarily grow it. I call the latter producer–one who is good at keeping existing accounts but weak at obtaining new ones–a “servicing” producer.
Interestingly, many agencies get half the equation correct. For example, an agency looking for a producing producer often hires someone whose personality fits its culture, but who cannot sell. At first, the match might seem like a good one because the producer, like everyone else in the office, is nice and concerned about customers' well-being. These two traits, however, may actually prevent agency personnel from making sales. They may spend so much time caring for their customers that they do not have the time and energy to actually sell. They care so much that they want prospective customers to come to their own conclusion that ABC Agency is the right agency for them, so the producers and staff can rest assured that they did not unduly sway the prospect. Unfortunately, when an agency needs to grow, such an attitude makes it virtually impossible for a producer to build a book of business.
Some agencies find it difficult to hire a producing producer because the candidates' assertiveness/aggression and intense focus seem incompatible with the agency's style. In such cases, the agency owner must either a) hire someone who does not fit 100% with the agency's current culture and will likely change it, or b) forgo hiring a producer and find another way to grow.
If the agency chooses the first option, it should hire a producer with good sales skills and a personality that is closest to the agency's. The agency owner, however, must then lead all the other producers and the entire staff to accept and respect the new producer's personality and sales skills. The agency owner also must manage the new producer, including making sure the new producer follows the agency's rules and procedures. Otherwise, like Sisyphus, the owner will end up futilely trying to push a rock up a hill, and perhaps spend huge sums of money trying to prove a square peg will fit into a round hole.
On the other hand, if the agency requires a servicing producer to take over an existing book, it should not make the mistake of hiring a producing producer for the task. The producer likely will wind up with an inflated ego and too much compensation, and the agency may wind up reluctant to ever hire a producing producer again.
Asking a producing producer to service a book of business prevents him or her from making new sales because if the book is big enough, the producer simply will not have enough time to sell, and with compensation virtually guaranteed, the producer will have little incentive to bring in new accounts. Also, if compensation is not structured properly (for example, with new-business commission too high and renewal commission too low), a really good producer will undoubtedly focus on new business at the expense of renewals. I have seen agencies lose their shirts in such situations.
If you need a servicing producer, then hire a producer that meets those needs. Create an appropriate job description with relatively low new-business-production requirements and high retention and servicing requirements. Servicing producers typically are easier to find than producing producers, and their compensation packages should be structured accordingly.
Many agencies hire servicing producers because they more closely fit those agencies' personalities and then make the mistake of expecting them to sell well. The agency owner who wants growth can push and prod such a producer and ultimately become frustrated with the results, but the servicing producer is unlikely to build many new accounts. Even if the agency spends a lot of money subsidizing a producer for years, the odds are against him or her eventually meeting the agency's sales goals. I estimate only 50% of all producers ever produce enough for their agencies to break even.
Eventually, almost every agency will need both servicing producers and producing producers. Distinguishing between the two and hiring accordingly greatly enhances an agency's ability to grow and improve profit margins. This distinction also enables agency owners to better manage their producers because their expectation will be more realistic. Effectively managing all producers using the same system, when some are servicing producers and some are producing producers, is an impossible task. All producers cannot be effectively managed using the same goals or methods.
To ensure your agency's success, determine which type of producer you really need and hire the right kind. Hiring your first producing producer and assimilating him or her into your agency may require considerable time, energy and management skills, but the process will be easier with the second producer and subsequent ones. Try this approach and increase the odds of finding a good match for your agency.
Chris Burand is president of Burand & Associates LLC, an agency consulting firm. Readers may contact Chris at (709) 485-3868 or by e-mail at [email protected].
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