Commercial Producer Compensation

[aasquith]

I know there are many, many different ways to structure producer compensation these days. It's not just about commission splits, ownership opportunity, "bonus commission" structures with carriers, benefits, etc. anymore. However; I am trying to get a few opinions on compensation plans for scratch producers...

Let's assume a $50 million premium operation is bringing on a new commercial producer without a book. What type of structures have you seen or heard of for an individual such as this? They have a great background, solid technical knowledge, and sales aptitude - just no book to roll. How do you let this individual survive without "over guaranteeing salary" yet pushing them to also do what they are there for - production!

Any opinions are greatly appreciated!

[St.CaptiveGuy]

Attend a Dynamics of Sales Management seminar: this is covered in detail and various scenarios ran through so you can adapt to your own operation's characteristics. Just went in January and this was probably the most valuable class I've done in a decade.

[Delt2000]

I am a new producer actually and the structure we are going with is suppose to be the new way of doing it
But annual salary and then you validate that salary each month ( just like any other job) with a set number of appointments
Say 5 appointments a month---with potetional revenue over $2,500

The thinking behind it-- if you get the appointments the sales will come
extended a little farther you getting 10% of any commission
and you have a sales mentor--goes with you on sales calls-- helps close
To help motivate that person they also get 10% of the commission sold

A good revunue mark for the first yr is $50,000
A good 3 yr mark is $200,000--- which at this time remove from the above

The problem with the old way and using a draw-- the sales cycle is so long these days and it takes so long to close on accounts
You want that person to be able to own a home ( commissions don't count for 2 yrs) when you are reporting income for a mortgage application

Hope this helps

[Rob Weidert]

Hello,

CIC is the way to go. I still have my books here at my desk for reference. Check out their website and listen to a couple of the free webinars and you'll see what I mean.