- October 1, 2020
- Posted by: Hannah Johnston
- Category: Uncategorized
If you’re like most brokers I talk to, generating organic growth for your brokerage was at or close to the top of your list of strategic priorities for 2020.
You concluded that personal lines new business is tough going, and you turned your attention to commercial lines as a real growth opportunity. You gathered your team of producers, shared your thoughts with them, set some growth goals, and kicked off the New Year.
And then COVID-19 happened.
Your well-crafted bonus plan, thorough sales training, and new sales support services seem to be falling flat in light of what’s happening around the globe and in the market.
Your sales team is flatlined.
How can you tell? Common indicators include:
- Book of business under $250,000 in commission
- Compensation, all in, north of $100,000
- New business commission last year less $50,000
- And they make comments like “No time to sell, boss, I’m busy taking care of my clients! What’s more important – my clients or chasing new business?”
So now what do you do? How do you improve your sales team?
Step 1 – Smoke out the impostors
Let’s go back to basics. What’s the definition of “producer”?
To me, a producer is “one who proactively seeks and secures new clients for the brokerage.” So, my first question is – “Are there any impostors on your producer team?”
Look at the annual results for each producer, right back to their start with your brokerage. How did they build their book of business? With personal production or by accepting trade-down accounts from you and other producers? If your answer is the latter, then you’re probably dealing with an impostor. A producer in name only. This person is really a servicer, not a producer. Which is okay, as long as they are prepared to accept the salary that goes with the servicer’s job!
The harsh reality? If they’re not prepared to make a drastic change in their performance, then they’ve got to go! Maybe not out of the brokerage, but certainly off the sales team.
Step 2 – Secure the journeymen
What is a “journeyman?” To me, a journeyman producer is one who:
- Is technically very solid
- Handles large, complex accounts
- Has extremely high retention
- Has a book of business over $500,000 in commission
- Is a positive influence on the sales team
- Is a mentor to younger, less experienced producers
- Has total compensation of less than 25% of the commission income of his/her book of business
- Writes $25,000 – 50,000 in new business each year through referrals
The journeyman is not a hunter, but they do provide value to the sales team. While they are not your sales team of the future, you want to assure them that their future is secure. To do this, you need to get their commitment to work with you to correct any of the attributes I’ve listed above that may be offside.
Step 3 – Build your Sales Team of the Future
If one of your producers did grow her book through personal production, then let’s cut her loose from her service trap and get her back to producing!
These producers are the members of your sales team of the future!
Training and financial incentives won’t get them back to producing. You’ve got to change the model. Here’s how.
Step 4 – Perform a book of business diagnostic
Examine the producer’s book of business. What percentage of her total commission comes from:
- The top 5% of her accounts?
- The middle 15% of her accounts?
- The bottom 80% of her accounts?
- The bottom 25% of her accounts?
Do this, and I think you’ll be shocked! It’s very common for me to discover that the bottom 25% of a producer’s book generates less than 2% of their income. And the bottom 80% often represents less than 20% of their income.
In plain truth, most producers, by writing two or three new accounts the size of the average of their top 5% would replace the entire income generated by the bottom 80%.
Simple! Most producers I’ve worked with get this done in less than nine months, sometimes as quickly as 90 days.
But wait – there’s a problem! The producer doesn’t have time to go after those two or three big accounts!
Step 5 – Create selling time
You can create tons of selling time for your producers by creating a home for their bottom 80% accounts. We call it an independent business unit. How to do this is the subject for another article. Suffice it to say that it works, and it works really, really well.
Step 6 – Making the sale
When you broach the idea with your producers of trading off their bottom 80%, expect resistance. But here’s the deal – you guarantee their income after they trade off and while they’re going out and selling those two or three top 5% accounts. Make the guarantee for two years, so the producer has absolutely nothing to lose.
Step 7 – Give the sales team a leader
Now your team of producers is freed-up and ready to prepare for growth. They now need a sales leader.
Already have one in place? Great!
Don’t have a sales leader, or only have a part-time sales leader? Every winning team needs a coach, so this is a key ingredient in achieving organic growth.
It’s the sales leader’s job to:
• Eliminate the impostors
• Secure the journeymen
• Build the sales team of the future
So, there you go, congratulations! You have successfully resuscitated your previously flatlined sales team.
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