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. 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 per week. It doesn’t mean the producer can close the account. It doesn’t mean the person knows how to pitch the value proposition of the agency. But if the producer can’t set one new business appointment per week, of … 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 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 Jan. 2007, as part of a panel on “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 time 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. It’s important for the mentor to take the time to take them out in the field as well.”

Peterie said a significant amount of time and attention is required of principals and mentors to help new producers. “If you don’t want to invest the time and you’re looking for a new producer to take time off of you and make money for you, that might happen down the road, but when you first bring them in it is such an investment in them.”

Agency management, he said, should provide incentives for experienced producers to take the time 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 added that picking the right people to be mentored is another part of the equation. “You have to have somebody that’s really interested in being in this business. … If you have someone that doesn’t really want to do it, he might not succeed no matter what kind of culture you put him into.”

First things first

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

Peterie reiterated the key is to get them in front of people. “You can’t sell anything if you’re not in front of people. We can help them sell things, we can help them figure out what kind of mistakes they make, but … 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 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. “I start them all off with that. I try to find out where their skill level is. … We talk about prospecting, sales calls, etc.; at the end of the day, all those three things combined equals results.”

Kaufman added that 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.”

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. … You can’t just throw them out into the fire, you’ve got to help them, you’ve got to teach them,” Haney said.

He explained that visiting once a week with a new producer is not enough, and added that he tries to be patient. “I will go out with them, I don’t want to 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 a listening exercise into a 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.” After the call, he meets with the new producer to analyze the prospect’s issues and determine how to best deal with them.

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. “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 again, so when they hit some of those obstacles, they will know this is what they’re supposed to do.”

Peterie said his agency does not impose minimum premium levels on new producers, but tries to get them out to address potential customers as soon as possible. He believes anything they can sell at first — small or big — will help their confidence level. “You let them cut their teeth and be successful,” he said.

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 or her 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 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. … 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. … The more failures they have early on gives them more opportunities for success later on. And so I encourage them to do is kind of go after everything early on and get told no, trip and fall, and come back and let’s talk about 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. 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 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. … It’s … a good way to learn.”

Kaufman said he starts new producers with a production goal and a worksheet and helps them to determine how many calls it will take to reach the goal. “I try to teach them to love the numbers, because through that, it helps them to understand 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. [I] try to keep them focused, and try and keep the older experienced producers from wasting too much of their time when they’re dealing with young guys. 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, he 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 stockholder. And it doesn’t really matter what percentage it is, they just want to say, ‘I’m a partner in the agency.'”

Personal goals and dollar amount goals are 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 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 it becomes a grassroots level of support. … The whole staff is pushing producers to hit their goals. … We find that producers have a lot more pressure among their peers than they do from agency management.”

Topics Texas Agencies Training Development