Mentoring process is at the core of new producer development

Most high performance, high growth independent agencies have a lot in common when it comes to finding, hiring and mentoring new producers: They dedicate the necessary time for their mentoring program and couple the educational aspects with a prospecting focus up front, according to one agency management consultant. In his view, setting new business appointments and getting in front of customers is what it’s all about and if they can’t do that, producers are bound to fail.

“If you can’t get the plane off the ground, you might as well cut your losses and get out,” says John Wepler of Concord, Ohio-based consulting firm Marsh Berry & Co. Inc.

According to Wepler, successful agencies with great mentoring programs “follow a dual track of prospecting and of education and learning. What that means is after a bumper zone of a month or so, a producer is responsible for setting one new quality business appointment a week. It doesn’t mean they can close the account. It doesn’t mean they know how to pitch value proposition of the agency. But if they can’t set one new business appointment a week, of meaningful dollars, say $5,000 in commission, then you need to cut your losses and move on.”

High growth agencies require new producers to prospect and set new business appointments themselves. If the young producer can get into someone’s door, the agency will step in and help them close the deal. But, Wepler said, if a producer can’t get on the phone and set those appointments, “they’re probably not going to succeed in terms of driving new business production.”

Wepler made those comments during the Independent Insurance Agency of Texas’ Joe Vincent Seminar in late January 2007, as part of a panel addressing “Meaningful Mentoring: Growing Successful Producers.” He was joined by Mike Haney, Morgan Insurance Agency, Lufkin, Texas; Garry Kaufman, Galveston Insurance Associates, Galveston, Texas; and Chris Peterie of Swingle, Collins & Associates, Dallas. The IIAT’s Paul Martin moderated the event.

Kaufman emphasized that dedicating the time to spend with a new producer is important not only to help him or her to “understand the business, but just to open the lines of communication. … Time to sit down with their mentor to strategize about policy development, to strategize on how to best prospect, talk about sales calls. I also think it’s important for the mentor to take the time to take them out in the field as well.”

Peterie said agency principals and mentors need to be aware of the significant amount of time and attention required of them by new producers. He added that the mentor should have a vested interest in dedicating that time. Agency management, he said, should provide incentives for experienced producers to take the time out to shepherd and educate new hires. “There’s got to be a vested interest, there’s got to be some value placed on the mentor spending time with the new producer,” Peterie said. He noted that picking the right people to be mentored is another part of the equation.

First things first

“What do you do with new producers at first?” IIAT’s Martin asked.

Peterie reiterated that the key is to get them in front of people. “You can’t sell anything if you’re not in front of people. And we can help them sell things, we can help them figure out what kind of mistakes they make, but at the end of the day, numbers, being in front of people and having one good meeting a week or five good appointments … that’s the place these people can get lucky.”

Kaufman said time management is an absolute essential. He starts new producers out by showing them how their activities will affect their success. “If they get too far down the road without understanding how time management can affect their job and how their daily activities can benefit them in the long run, it’s difficult.”

As one element of his training program Kaufman uses a formula: A+S+K=R, which stands for activities plus skills plus knowledge equals results. If the results are less than satisfactory, he uses that formula to diagnose the problem. If it’s an activity, sales or education issue, “I can diagnose the results pretty quickly,” he said.

Haney said his agency places a strong emphasis on education. “Ours is a tough business. I’ve decided that every producer that comes into our agency in Lufkin is immediately enrolled in the Big “I” school.

He explained that just visiting once a week with a new producer is not enough and added that he tries to be patient and really work with them. “I will go out with them, I don’t want take over the call from them but they can’t do this on their own until they get some knowledge of what they’re trying to do. So I will sit with them. Every week they e-mail me a log activity. I want to know who it is that they’ve made contact with.”

Martin asked how the panelists transition the initial sales call experience from listening exercise into participatory one.

“I always try to get them involved in the presentation at some point,” Kaufman said. “It may be asking questions. … It might be presenting part of the proposal. They do listen but I also want to get them comfortable early on so they will participate.” Haney said in training sessions with his new producers he takes on the role of the “bad guy, the customer that he’s trying to sell insurance to. So I’m going to try and do everything I can possibly do to say — why should I do business with you? So we take basically a risk reduction approach. And these guys have got to present this to me and we do this constantly, over and over and over again, so when they hit some of those obstacles out there they will know this is what they’re supposed to do.”

Peterie said unlike some other agencies his does not impose minimum premium levels on new producers and tries to get them out addressing potential customers as soon as possible. His belief is that anything they can sell at first — small or big — will help their confidence level.

A reasonable expectation

Wepler said Marsh Berry found that in 2006 the average producer brought in $57,000 in new business commissions, the top 40 percent of producers brought in about $100,000 in new business and the top 20 percent pulled in $200,000 in new business, which, he noted, “is a very high hurdle.” He said in general, Marsh Berry looks for a new producer to bring in new business equal to his salary the first year.

Kaufman said his agency, which writes a lot of small commercial business, allows three years for validation of a new producer’s contribution to the agency. He said he seeks to build confidence in new producers early on and give them opportunities to write a wide variety of accounts during those first three years. However, he said, “I know this sounds crazy but I want them to have early failures, too. I think they learn from that. I certainly like to give them enough rope early on for them to go out and have the failure so when they come back we can talk through it … in the long run that makes a better producer.”

Haney said he deals with each producer individually and has different production volume requirements for each. And, he doesn’t limit producers to set types of accounts. However, he said, “we designate accounts by A, B, C and D, and we do that by revenues. I’m not going to say that you can’t write a D account, my problem is how much time do you want to spend on an account that’s not generating a lot of revenue when you’ve got that A account there that you really need to spend a lot of time on.” Haney explained that by the third year he expects new producers to be “well above what the salary is that we paid them.”

Peterie said he expects 100 percent of a new producer’s business in the first year to come from cold calls. The expectation for the second year is a 90/10 mix. “The third year, 80/20, fourth year, 70/30,” he said. “In that way, when they start going after the referral sources that are part of their community they’ll be more experienced, they’ll have more knowledge.

Kaufman said he starts his new producers out with a production goal and a worksheet and helps them try and determine how many calls it will take to reach the goal. “I really try to teach them to love the numbers because through that it helps them to understand eventually what their book of business looks like, how they generated it, and how they can change their road map of success if they are looking for different types of accounts to write.”

For Kaufman, time management is “a big deal.” So, he said, “for the newer younger producers I do spend a lot of time focusing on what they need to be doing during that eight to five work day and what they don’t need to be doing. They need to be out there prospecting, trying to set appointments.”

Find out what makes them tick

With new producers, Kaufman said, everybody is different, so he tries to find out what “makes the person tick, what motivates them.” He said both business and personal goals, in addition to money, are significant when it comes to motivating employees to succeed. Still, Kaufman said, “if they tell you money doesn’t motivate them they’re in the wrong business.”

Haney agreed. “Money is always going to be the big motivator but I don’t think it’s everything. We’ve got to let them know if they do something really good. … I do think there’s a lot of production people out there that if you give them a goal they’re going to do whatever it takes because that’s their ultimate goal — they want to be a partner, they want to be an owner, they want to be a stock holder. ”

Personal goals and dollar amount goals are both important motivators, and so is peer pressure, Wepler said. “When we look at high growth agencies there’s not an absolutely right recipe, but one common thread that we do see is that all of the non-production staff … their year-end bonus is tied to whether or not the producers meet their production goals. So … the whole staff is pushing producers to hit their goals. … producers have a lot more pressure among their peers than they do from agency management.”

Topics Texas Agencies Training Development