Four Types of Producers

I have spoken at more than 200 insurance industry events. I have met with thousands of agency owners, producers and CSRs. In more than two decades of working with insurance agencies, the No. 1 need has never changed: Agency owners, managers, and staff want quality producers.

This need for quality producers makes hiring, managing and coaching producers favorite topics. But before thinking about any of these steps, it’s important to recognize that producers can be divided into four categories. Acknowledging these four different types of producers upfront can be a huge advantage for agencies in need of quality producers.

Type 1: Outliers

Outliers are producers that have books of business far greater than most people can imagine. Most outliers have at least $1 million in self-produced commissions. Many agency owners don’t dream of super models. They dream of finding an outlier.

Outliers cannot be replicated. They have a unique skill set that does not need coaching. Most often, agencies do not have room for more than one. Sometimes agencies do not have room for any outliers or a particular outlier. Outliers often cost a fortune, but not in direct wages. They are often difficult personalities, which can create morale issues and disrupt an agency’s rhythm.

Outliers usually cannot function like other producers in an agency. At first it seems obvious that they should not function like others. Others should function like them. But they are not replicable, so trying to make others function like them is a recipe for a disaster. Because they cannot be replicated, an agency absolutely should not build its future on an outlier. Even when outliers do not bring expensive baggage with them, an agency should not and cannot base its future on finding more such producers. Outliers are rare, and even the easy ones are a management challenge.

Type 2: Incompetents

At the other end of $1 million producers are incompetent producers. These producers are often great people, but for any number of reasons they are in the wrong job. They are in a job in which they lack the skill set, and they have no hope of being trained, managed or coached to adequacy.

These producers cost a financial fortune. A payoff never happens. The opportunity cost to the agency for hanging on rather than firing them and focusing on finding a higher quality producer is huge. The opportunity cost to the producer is huge, too. I have seen too many incompetent producers lose their jobs upon the sale of their agency, resulting in 40- to 60-year-old people having to start from scratch. They bear some responsibility, but so does agency management. Agency management could have helped these people find a career that better fits their skills when they were younger and more pliable. Owners would do everyone a favor by firing incompetent producers sooner rather than later.

Type 3: Good but Limited Potential

Type 3 producers have potential. For many reasons, they are not yet proven, so no one knows what their potential is. They may be young, new or perhaps no one has taken enough time to develop their potential. They will likely never be rainmakers, but they’re unlikely to be duds either.

An agency can achieve considerable success if it only had good producers for whom no one will ever write a magazine story. Smart management would realize their limitations, build the agency around those limitations, and not spend a fortune in sales training trying to make something out of them that they are not.

Great management requires recognizing people for whom they are. A good way to create ill will is to always be trying to make people something they are not. You cannot make an incompetent great or even good, so why try? Some people may be good, but they are never going to be great. There is nothing wrong with this.

These producers are going to click with a certain kind of account. Critical to making the most of them is to make sure the agency is as efficient as possible. An agency has to be much more methodical and systematic.

Some good but limited potential producers get the short of end of the stick because they are clumped with incompetent producers and compared to outliers. Outliers and incompetents will not benefit by methodical systems. The former will make life hell for forcing conformity, and the latter will fail no matter what, so the agency just gives up on systems. This damages the potential success of good producers with limited skills.

Type 4 – The Goal: Strong Potential, Competent and Coachable

If an agency wants to go from good to great, these are the producers to hire and develop. That written, these producers create management responsibility that will be overwhelming for some. Some managers have never managed these kinds of people, they are not sure what to do, and the idea of not knowing what to do with much raw talent can be scary.

These producers are not rainmakers, but they have significant potential to become high-quality producers. They are coachable. They are likeable. They are technically competent, or they have the intelligence combined with a reasonable ego to know they need to partner with someone within the agency that is technically competent.

These producers can generate between $400,000 and $750,000 in annual commissions within a typical agency, and they do so with only marginally more agency resources. So not only do they produce more, their production is more profitable. They generally work within the agency’s system and are more team players than outliers.

People with these ideal qualities only exist en masse when agencies are highly methodical in hiring, training, development, management and coaching. It is not a romantic endeavor where the agency owner just looks across the room, eyes meet, a hire is made on a handshake, and the producer sells merrily into the sunset. Few agencies have the abilities to provide all these resources in-house, so finding the right trainers and coaches is critical (and I do not have any skin in this game because I don’t provide these services). Few can actually cause people to truly learn rather than just talk. But for the ones that do, the results are phenomenal.

So, what type of producers do you have? What kind of producers do you want? If the type of producers you have are not the type of producers you want, what commitment are you willing to make to achieve success?

An agency that focuses on Type 4 producers will achieve great success. The agency may never make the cover of an insurance magazine, which is usually interested in rainmakers even if they flame out the day after the cover shoot. However, when the day comes to cash in your chips, these agencies will cash in the biggest pile.

Topics Agencies Numbers Training Development