The Competitive Advantage: Agency Owners of Yesterday and Today

When I began my career, many agency owners I met had founded their agencies in the Great Depression. To this day, I am amazed that anyone in the middle of a truly horrible economic depression would open a property/casualty insurance agency, when a large proportion of the population not only had no money with which to pay premiums but they honestly had lost everything and had nothing left to insure. What wonderful, scary and inspirational stories they told.

Today, I am working with agency owners who have never lived without the web and email. Entrepreneurism is a choice in a far different manner for these agency owners. The choice of becoming your own boss, your own agency owner, is so different now. Owning and running an agency is very different today from the men and women who founded agencies in the Great Depression, who, if they failed, also starved. Their families probably starved, too.

That difference — selling insurance or starving versus today’s world where success is optional — is one of the most vibrant differences I’ve seen working with agency owners during the past 30 years. This difference highlights two points.

Cloudy Motivation

The first point is motivation. The earlier generation were hard people. They were good and warm people, but they made sales happen come hell or high water. Every sale was another meal. Their fear of failure ran deep. That fear is not such a bad characteristic for a salesperson.

The second point is cloudy. Most of these men and women sold because they had to sell. They did not sell because they were natural salespeople. This has two important implications by itself. The first is that I find it fascinating how many producers who are not natural salespeople do not sell much.

Not being a natural does not mean sales cannot be made. The difference is the early generation had no choice, so they sucked it up and made calls, asked for sales, and knocked on doors. Just because sales are not a natural path does not mean producers today can’t suck it up, too. They just choose not to make the calls, ask for sales, and knock on doors. If sales are not natural and a person is not willing to suck it up and get the job done, then they should find another career. If you employ such a person, you can do them a favor by showing them the door. No one is doing anyone a favor employing someone in a job they do not like and for which they don’t have the desire to force their way through their emotional barriers. Life just does not need to be that frustrating.

The second implication though is more important. The early founders who were not true salespeople psychologically, were not capable, largely, of hiring true salespeople. The old axiom that people hire people like them is extraordinarily accurate. When these founders then hired people that were not natural salespeople, but did not face a starve or sell environment, they almost always failed.

When hiring non-natural salespeople that had a choice of whether to sell, they would almost always make the choice to not sell. They never were going to suck it up like the founders did because the environments were not the same. Not accepting the difference in environment as a determining factor of the success of the next generation of producers was, and still is, the Achilles heel of many agencies.

Owner Versus Sales

One of my personal successes, though definitely not a universal success, is helping agency owners understand themselves more clearly, especially when they have built large books of business. Being an agency owner is completely different from a sales perspective. People, consumers and businesses see the sales proposition quite differently when a good title like “Agency Owner” follows one’s name. Doors open more easily. The business owner is buying insurance from another business owner. Selling as an owner requires much less talent and even less effort. Many agency owners do not see this point with adequate clarity, which causes them to misjudge their producers. They either expect too much or too little. Again, the sales environment is different, making a direct comparison unfair.

Confusing sales success as an owner with pure talent versus how position accelerates sales is dangerous. (On the other hand, an owner that has poor sales and little else to do is a lead weight around the agency’s neck from every angle imaginable.) Understanding this difference leads to much better hiring decisions, far better expectations, and a better understanding of why true producer management is vital to real producer success.

Another key to successful hiring is understanding that a real producer may not look like you, the agency owner. It is difficult for many agency owners to recognize the difference, but when that light bulb turns on, the agency world is a brighter place.

Many agency owners who have large books of business, and when judged by the numbers, they are high-quality producers, but they are not true salespeople.

A true salesperson will literally knock on doors, make cold calls, make warm calls, and in some fashion or another, they will always ask for the sale. They may say it more politely or strategically, but they are not afraid of asking, “What will it take for you to divorce your current agent and marry me?” A true producer is not stressed by this question.

These folks can be intimidating. Their success can be threatening.

Understanding an agency owner’s role versus their role can decrease this anxiety. The owner’s role is to keep doing what you’re doing if you have or are building a large book. The environment truly is different, and an owner does not have to ask so hard. Not understanding the difference, not understanding that you may not be a true producer, is a key reason why, sometimes subconsciously, owners so often hire weak producers, maybe hire people like themselves that do not have the luxury of being an owner.

Assess the Situation

Agencies depend, always, on sales. Employing people that cannot, or will not, make sales means a stagnant future and no internal perpetuation possibilities, especially in a soft market environment. If the early agency founders with which I worked had better understood the reasons for their own success, and had acted on that knowledge, the industry would look fundamentally different today when times are so easy. The culture would likely be completely different and the threats to agencies’ futures would be less.

Assess your situation today. While much is to be admired about the early agency founders, focus on their strengths of character and avoid making the mistake of not knowing exactly why you have sales success. True knowledge of your personal strengths and why you have success may be the most valuable data you possess.

Topics Agencies Talent