I received a nice email from a reader asking me to write about how important it is to support good producers and how good producers should be heroes rather than grouping all producers as anti-heroes. He provided the context that good producers used to be thought of highly, whereas today, all producers are looked down upon. He asked if I’d write about this.
I do not usually take readers’ requests to write about a specific subject, but this request stands out. He has a point on many levels. First though, I want to examine why producers are not as revered as in the past. Producers, relative to sales, follow the Pareto curve. This is known colloquially as the 80/20 rule. Eighty percent of the producers cannot sell and 20% make 80% of the sales. My personal database suggests the ratio is closer to 60% cannot sell period, 10% can sell a little, 10% can sell quite a bit, and 20% can sell a lot. Regardless, the vast majority of producers really should find another job.
When the percentages are so skewed, everyone has a tendency to get painted with the same black brush. The negative energy consumes all the energy. Staff and managers have little energy left to share with the good producers. In and of itself, this may be one reason some agencies can never hire a quality producer while others seem to get more than their share. Good producers like positive energy.
Another reason all producers are painted the same involves the definition of “good.” Good is subjective and producers usually have a definition that varies from most all other peoples’ definition. For example, I have had plenty of producers with only $100,000 in commissions tell me they were good producers because the quality of their accounts was so excellent. With only $100,000, the quality of the accounts should be excellent because they should have plenty of time to make them excellent, but excellent does not make up for the deficit of production. If we were addressing the difference between a $400,000 producer having high quality accounts versus a $600,000 producer with low quality accounts, then an equalization may exist. But at $100,000, such an equalization is impossible.
Third, some “good” producers can out prima donna the worst actors. They are walking E&O exposures trying to hand cases to plaintiff attorneys on platinum platters. They are emotional basket cases. Every reader has their own story from innocent but bizarre clothing to huge mistreatment of co-workers. When the majority of people with a certain title underperform, a connotation gets attached to everyone with that title, whether fair or not. To answer the question as to why good producers are not held in high esteem today, I think everyone is just tired of dealing with the majority of producers.
Good producers should be held in high esteem. Now, by “good,” I mean:
- Dead minimum of $500,000 self-created commissions.
- Quality accounts written correctly.
- Generally, follows procedures.
- Nice to co-workers.
Quality people always deserve honor. Why are producers that meet these qualifications so rare in our industry? Many reasons exist including how difficult it is to find quality people that can sell, want to work in insurance and that agencies can afford. Other industries pay more for high quality young candidates. Insurance buyers are age discriminatory in that they do not like to make large purchases from people that are 24 years old. Bridging that gulf between being 22, just out of college, and 30, which is about the age buyers are more receptive, is difficult. Pulling them from other industries at that age is tough because they may be realizing some success then and yet, carrying them for five to eight years while they age is too expensive. While they, like cheese and wine get better with age, agencies just can’t store young producers and pay them while they age.
Another factor is that insurance is not sexy. Lots of other industries are sexier to young people. Some of the insurtech firms have successfully addressed this point but they focus on marketing rather than sales. Producers are in sales, not marketing.
Finding a relatively young, but not too young, person who wants to start their career over, initiate a sales career that is really hard work for many years, and in an industry with a drab reputation is a tall order. This is why the good producers really should be held in high esteem!
Add to this the common, though not universal, owner psychologies. In the traditional and now constantly bought out agencies, many owners subconsciously did not want producers that could sell because they did not want to share the limelight.
Many of these owners became owners so they would not have managers. They hate being managed and in their sense of fairness, using the Golden Rule to treat others as you would be treated, they won’t manage or train new producers. They fail to appreciate that the need to manage and train is more important to everyone involved.
In reality, with absolutely no offense meant, these owners want to manage a book of business and build relationships with clients rather than building a business. Building a business is required for successful producer development.
The former goal is not wrong. It just is not compatible with developing quality producers.
Put the two factors together and is it any wonder the producer failure rate is so high? Or that producers are not held in high esteem? Do not think the big shops have this figured out either because most do not.
The key is leadership. Leadership does start with recognizing high quality producers. Next, if you run an agency of any size, do some honest soul searching. Do you really, truly want quality producers that will push the agency and maybe push you? Are you willing to make the leadership and management commitment to seeing them succeed? What I’ve observed is that good producers have a tendency to find homes in agencies with positive energy and that energy begins with the leadership commitment to develop quality producers and not sustain poor producers.
This includes a formal and even rigid development plan and training course. It involves holding them accountable for their activities from day one rather than looking at their production at year end. It involves making sure they actually learn coverages rather than just get CE. Almost no producer today is going to do everything on their own. They need leadership, management and mentorship.
I only have a few clients where all the producers are held in high esteem. The owners are always great leaders and they always have strong systems in place. You might think those are horrible environments, but they are the most positive environments I visit because the poor producers are not dragging down energy levels. The producers in those shops are held in high esteem, as they should be.
These agencies and their employees are the winners. Would you like to join the winners’ club?
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