Modernizing the Sales and Service Functions in an Insurance Agency

By | January 26, 2004

An old adage states, “If you keep doing what you’ve done, you keep getting what you got.” As a matter of fact, the true definition of insanity is to continue to do the same thing over and over again and expect different results. I would like to propose some major changes of agency structure for producers and CSRs that will, in all likelihood, lead to increased sales and improved customer service. Some of these suggestions will involve redeployment of personnel, while other changes involve a new concept called “telecommuting.”

Agency producers
In order for an agency to be really successful, a structure must be created to allow sales people to sell and service people to service. Current agency structure sometimes causes these duties to blur. Producers get phone calls from clients to make policy changes, issue certificates, report claims, answer coverage questions, etc. They get so bogged down with service items that they don’t have time to sell. It isn’t a wonder that without specific goals, they get involved in day-to-day trivia instead of spending their time calling on prospects and customers.

One of my mentors, Gary Holgate, professed that for an agency to be a successful sales organization, a producer must be out of the office 80 percent of the time (and that was long before the days of cell phones, personal computers, DSL and cable modems, etc.). In my 39 years in the insurance industry, I’ve never heard of a large account walking into an agent’s office and asking for a producer to write their account.

When I was very young, I listened to a radio program titled, “Crime Busters.” They had a series of interviews with a very famous bank robber by the name of Willie Sutton. When asked, “Willie, why do you rob banks?” He responded, “Cause that’s where the money is.” This quote is applicable to insurance agency salespeople. They should spend a vast majority of their time, “where the money is,” in other words, with customers and prospects.

A producer has to spend a majority of their time face-to-face with prospects and customers in order to be successful. They must also spend part (10 percent to 25 percent) of their time contacting prospects (to qualify them) and customers via the phone to set appointments. There is little need for the producer to come into the office to accomplish this.

New age producers could easily work from their home offices. They are always reachable via e-mail and cell phone communications; retrieve customer data via the Internet or dial-up modems; complete applications online, etc. The key is both time and activity management. Since sales management is lacking in most agencies, this can be a problem, however, not an insurmountable one. Reports can be mandated by the agency owners and managers, which will allow the producers to account for their time and activities. These reports can be e-mailed to the owners and managers.

Agency CSRs
What about the service and CSR function? When I interview CSRs, I will usually ask them questions regarding account development, cross- selling and up-selling. The usual response is, “I know that I should do more, but I just don’t have the time.” In most offices, the CSR spends 82 percent of their time processing. As a matter of fact, when I ask a CSR what is their No. 1 interruption, they’ll tell me, “the phone.” My response is, “No, dealing with the customer on the phone is the reason that you’re called a Customer Service Representative.”

Processing has grown to be so burdensome to the CSR that it has become synonymous with Customer Service. Most CSRs can’t wait to get off the phone in order for them to get back to customer service.

There is one more step that one must take to fully understand the problem and how to fix it. I will ask the CSR, “Have you ever worked a Saturday or Sunday, when there was no one around and the phones were off?” They will answer, “Yes.” I then ask, “How many days of paperwork can you get done in one day under these circumstances?” The response is usually four to five days. If that’s the case, than shouldn’t one qualified CSR be able to do the paperwork of four to five CSRs in one day, if they are removed from contact with the phones, producers and customers? The answer is yes.

Now that we have recognized the problem, how can it be corrected? We don’t need to throw money at the problem, all we need to do is to look at reallocating our personnel. I dare to say that many agencies have CSRs that are great technically and really move the paper, but are not very good with the customers on the phone. Because their job is still very important to the agency, I see no need in reducing their position or salary. These individuals should have the title of Quality Control Representatives (QCR).

Another source of the Quality Control Representatives is the person that takes an extended or permanent leave of absence following the birth of a child. If the agency has adopted and is properly using imaging, the QCR can be linked to the agency management system through the phone lines or through the Internet. Once this link has been established, the QCR will be able to provide the same services as if she were still in the office of her employer.

Telecommuting
It seems to be on a steady growth curve, with approximately 16.5 million telecommuters in the U.S. today according to a survey sponsored by the International Telework Association and Council in 2000. We’re not going to see the day when everyone works at home in blue jeans, but it’s clear that the days of everyone going to the office five days a week are rapidly disappearing.

Research tells us that that well-run telecommuting programs do lead to increased work output, for many reasons. Teleworkers are more effective in what they do. Effectiveness includes all the aspects of knowledge-workers’ activity. To be sure, it includes quantity of work produced, but also includes quality, timeliness and ability to handle multiple projects and priorities.

What are the positives of telecommuting?
There are some real positives about telecommuting. Teleworkers and their managers report that workers get more done when out of the office. In an AT&T-sponsored survey in October 2002 of Fortune 1000 managers, 58 percent reported increased worker productivity. California’s Telecommuting Pilot Program also experienced productivity increases of 10 percent to 30 percent.

Home-based telecommuters continue to work at home with a cold or other minor ailment that may have kept them out of the office. In fact, telecommuters work longer hours and more workdays than the average employee.

Companies with teleworkers can keep going when disaster strikes—weather related or otherwise. Thousands of displaced workers in the Washington, D.C., and New York metropolitan areas were teleworking in the wake of the terrorist attacks of Sept. 11.

In 1995, Hewlett-Packard implemented telecommuting and virtual office programs for its sales department. Employees could decide whether they wished to stay in the office, telecommute a few days a week, or move out of the office entirely. Management reports that sales have gone up, productivity increased, and more time is spent with the customer since telecommuting began.

What are the negatives of telecommuting?
It is definitely not for everyone. Force the wrong kind of person into this and their performance will drop. Also, there is a gap between what many employees think telecommuting is and what it actually is; that’s why prospective telecommuters need a realistic preview of the good and bad parts to be able to make an informed decision.

It’s costly, at least initially. No matter what longer-term benefits exist (and there are many) you still need to come up with some up-front money to fund equipment investment, phone bills, etc. However, some of the costs have already been paid. The PCs, desks, supplies, etc., that are now in the office, can be moved to the home office of the salesperson or QCR.

It’s a challenge (at least initially) for most managers, especially when they would rather continue dealing with people face-to-face. It upsets their status quo, no matter how beneficial it might be to them and we all know how difficult change is. You will have to really commit to the change. Remember, if you make a commitment, you’ll find solutions; if you don’t commit, you’ll find excuses.

While these ideas may seem radical to some, they have been proven to work for many agencies and agency owners. Telecommuting brings more employee satisfaction and more profits to the agency.

Jack Fries is recognized as one of the nation’s top agency operations experts. If you wish to contact him, you may e-mail him at
jfries@jackfries.com or call him at (859) 694-1580. You can also find additional articles and services he provides at: www.jackfries.com.

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