Question on Med Supp Commission

[kgmom219]

There are certain personality types that prefer to work that way. They want a job. There is an agency in our town where they hire people and get them licensed. They pay them minimum wage and like a one time $100 bonus for each Medicare sale. The agency owner makes all the real money and 100% of the renewals.

I used to think, how in the world does he get people to work for that? But he just hires the right kind of people. If they show any sign of independence he probably doesn’t want them.

He’s been at it about 20 years and I’ll bet he has 15,000 clients on the books in our town at a minimum. All face to face. And he doesn’t even live in this area and that isn’t his main location. He does a ton of advertising and drives business in the door.

Should Agents take that kind of offer? Hell no! But if you opened an agency like that up tomorrow you would have no problems staffing it. I’m convinced of that.

And there is nothing wrong with that. There's a couple of those around here, too.

One of them is O65 only and he hires licensed agents in August, trains in Sept and they all know they are gone on Dec 8th. As far as I'm concerned, as long as you are upfront with the people, its fine. I actually looked into in my first year as a way to get some cash flow and learn the business.

Not everyone wants to be an agent. Some people want a guaranteed income. Nothing wrong with that.

 

[Todd King]

There are certain personality types that prefer to work that way. They want a job. There is an agency in our town where they hire people and get them licensed. They pay them minimum wage and like a one time $100 bonus for each Medicare sale. The agency owner makes all the real money and 100% of the renewals.

I used to think, how in the world does he get people to work for that? But he just hires the right kind of people. If they show any sign of independence he probably doesn’t want them.

He’s been at it about 20 years and I’ll bet he has 15,000 clients on the books in our town at a minimum. All face to face. And he doesn’t even live in this area and that isn’t his main location. He does a ton of advertising and drives business in the door.

Should Agents take that kind of offer? Hell no! But if you opened an agency like that up tomorrow you would have no problems staffing it. I’m convinced of that.

I understand that there are people who want to work like that, but I bet the OP isn't one of them once she knows the truth.

Okay settle down champ you might blow a gasket, it's only the 2nd day of the year.

So Todd, based on your response am I safe to assume you as an FMO provides enough FREE quality leads to your downlines for them to make a good living out of the gate, and let's them get residuals?

There are two sides to the coin, and agency owners often provide a lot for agents and are the ones taking all the risks fronting the leads. Personally I DO pay my agents residuals, but I find it hilarious that people on here (including YOU, an FMO who would love to recruit her...big surprise) think it's just a walk in the park for someone like this OP to go out and be able to get a ton of deals because in your world getting leads seems like a cakewalk.

Why is it then I get several calls and emails each week and nearly all of them are trying to get leads? Hell even the big boys who buy from me are continually griping they can't get enough leads. I'm giving a strong dose of reality Todd, while you seem to live in fantasy land. But then again you'd love to have her under you to help your numbers, so I understand your story.

Take a chill pill man, seriously.

This is PRECISELY why I go on record and post things in various threads such as "Hmm, this will make a very interesting case study, let's see your results in a year."

So to the OP, yeah go for it. I'm all for encouraging people to shoot for the stars, I'm also not selling you anything (contracts), and I've been where you're at. I never said STAY at 16%, but last I checked even getting paid first year brought revenue into your house hold. It takes a slick FMO to tell you to drop ALL THAT REVENUE, tell you "you've been screwed" and come join him. Again, I'm all about you being independent. But that's just walking the plank IMO.

Can't wait to see where you are in a year, do keep us posted.

First off, I never said we even offer leads. That wasn't the point I was trying to make. My point was plain and simple. Maybe it was too simple for you to understand. ANY agent who is working for 1st year commission only is getting screwed. I could care less if the leads are given for free, overcharged, or somewhere in the middle. The leads have nothing to do with my point.

I do understand though, that the leads cost money. In that case, they may should lower the commission to accommodate that, but how in the world can anybody justify keeping the whole renewal because of that? It's just wrong. You can try and justify it all day long if you want to, but I don't play that game. And yes, I do get very upset when I see something like this. I don't expect everyone to get as upset about it as I do, but I sure as hell didn't expect someone to support their robbery! No that's the thing that's sick!

 

[Bevo]

I do understand though, that the leads cost money. In that case, they may should lower the commission to accommodate that, but how in the world can anybody justify keeping the whole renewal because of that? It's just wrong. You can try and justify it all day long if you want to, but I don't play that game. And yes, I do get very upset when I see something like this. I don't expect everyone to get as upset about it as I do, but I sure as hell didn't expect someone to support their robbery! No that's the thing that's sick!

You're right Todd, perhaps it's so simple I just can't wrap my mind around it. I'll see if I can muster up enough intelligence to comprehend.

So you're saying you don't generate leads yourself, but somehow you're an expert on determining their worth even to the point of saying that paying someone (someone relatively inexperienced and new for that matter) FYC and no renewals is highway robbery.

What I'm saying is, have that same person go out on their own, brand new, learn the product, AND somehow generate enough leads to get a reasonable amount of deals that first year. You see you changed arguments and didn't address my point in my previous post, which was simply that he/she is NEW and got On-the-job Medicare Sales training while being paid, working Full-Time with NO risk. I said this was fair (You wouldn't know because you don't generate top quality leads in the Medicare space. You DO however recruit people to sell under you and this is driving your opinions rather than common business sense).The OP got 85 deals during AEP, not too shabby and those leads I'm sure didn't suck.

See you're just showing your hand. Naturally you'll promote them going on their own right away (through you). But are you really leading the cattle to the slaughter house? Leads and Marketing are the #1 MOST important facet of our business. No question. ANYONE can sell these products. So the OP was provided the #1 thing that most people don't have a steady supply of, yet you put it's worth at practically zero.

An FMO such as yourself will always offer more attractive deals to people, and the OP just might be ready to go with you guys right now. There's nothing wrong with that. But I'll "support" all day long an agency owner bringing on someone who wants work, wants to earn money, and wants to learn the craft on someone else's dime, and paying them First year only. Maybe 2nd year they can be vested and qualify for renewals. But that agent called nothing but warm leads (very difficult to get leads mind you) while learning from the early days. You cannot have your cake and eat it too. Just ask all the agents on here who can't get a lead source or prospects.

One way is a chance for someone to get their foot in the door and learn the business with little risk. Your way is for them to take on massive risk and for people to keep plowing through (Like KGMOM said above, starve for 3 years) until hopefully they make it one day. I can't honestly say I have hard statistics on the failure rate of that model, but human behavior dictates it's likely MASSIVE.

One way is for them to get a little heat, but not the entire furnace until the prove themselves and chop enough wood for the stove. Your way promotes them getting the entire household of heat without chopping wood.

This is a simple concept (I won't stoop to your level and say it's too simple for you Todd. I'll have more class than that), but LOW RISK always equals LOW REWARD.

Capisci?

 

[Newby]

I’ll go in the middle and say as long as they aren’t taking advantage of the agent’s ignorance AND they release, then whatever the agent is OK with is fine.

Some agents with full understanding of how everything works both as an independent in a captive would still choose that type of a captive situation. So to me that’s fair.

But any agent with even a speck of entrepreneurial ship in them would choose a different route if they understand the options they have.

Where I have a problem with it and I’m sure Todd has the same problem is were agency owners trying to keep Agents ignorant and are not providing valuable services through training, office space, Leads or whatever and are stealing all of their renewals. That’s where it’s just taking advantage of someone’s ignorance and then trapping them into a contract in not letting them go once they become aware of what they are giving up.

When an agency owner has an agent on those greatly reduced commissions for their valuable extra services it should always be the agents choice whether they want to stay and whether those extra services are worth it to them or not. And as long as you release then it is the agents choice.

 

[Bevo]

But any agent with even a speck of entrepreneurial ship in them would choose a different route if they understand the options they have.

Where I have a problem with it and I’m sure Todd has the same problem is were agency owners trying to keep Agents ignorant and are not providing valuable services through training office space Leads or whatever and are stealing all of their renewals. /QUOTE]

I hear you and agree for the most part. MY problem is when people on here bash the agency owner who is putting up everything except the easiest part which is selling the deal, and the "experts" claiming that they should get full comp or better contracts. Like I said...."What's 22% of NOTHING?". And if you don't generate leads yourself, you CANNOT rationally put a value on them enough to say that anyone deserves renewals or not.

And, bottom line is people can do whatever the hell they want.

It's all risk vs reward 100%. If you're an upline and going to encourage people to immediately try it on their own and profit off them, then you should also be held to the same standards that you're claiming the agency owners should (and I agree and have those standards) and let those people know their in for a serious shit storm while trying to get prospects and build up their business. Maybe throw in how many agents quit this business first year.

Maybe you guys do that. This gal got a GOOD deal.

But hey now she can go it alone next AEP and get those 85 deals. Can't wait to find out.

 

[Devin01]

This forum is hilarious the way everyone rips each other apart.

I am an agency owner, active producer and an FMO. Very rarely do I see someone new in my office that has outbound medicare selling experience, that knows how to generate leads and processing apps. Outbound vs inbound is completely different.

Any FMO will say your getting screwed to get your business in this situtation, so take everyone's comments with a grain of salt including mine.

Training is worth something, the agency owners time is worth something as well. I would reccomend that you renegoitate with your boss.

I think a fair deal in this situation is to gradually ask for residual, because that is what is attractive about Medicare sales.
I would not continue to work for 16 percent with no back end. Asking for 8 percent year 2 should be a no brainer based on your production. It's all how you talk to your current company. Eventually you should definitely try and go on your own.

If you want to go on your own I'd be happy to give you my 2 cents, pm me if you like.

Like everyone said, doing this on your own is very difficult and most agents fail.

 

[Newby]

I hear you and agree for the most part. MY problem is when people on here bash the agency owner who is putting up everything except the easiest part which is selling the deal, and the "experts" claiming that they should get full comp or better contracts. Like I said...."What's 22% of NOTHING?". And if you don't generate leads yourself, you CANNOT rationally put a value on them enough to say that anyone deserves renewals or not.

And, bottom line is people can do whatever the hell they want.

It's all risk vs reward 100%. If you're an upline and going to encourage people to immediately try it on their own and profit off them, then you should also be held to the same standards that you're claiming the agency owners should (and I agree and have those standards) and let those people know their in for a serious shit storm while trying to get prospects and build up their business. Maybe throw in how many agents quit this business first year.

Maybe you guys do that. This gal got a GOOD deal.

But hey now she can go it alone next AEP and get those 85 deals. Can't wait to find out.

I would never agree that the easiest part is selling the deal. That’s definitely not true.

And agents who buy leads know as much or more about the value of leads than a guy generating them. The guy generating leads is in a bubble. He only knows what it costs him to generate leads. And if he’s just providing them to captive agents he’s not competing with other lead vendors and he only knows what he is experiencing. Agents buying leads on the open market have a much better perspective.

But the bottom line is if an agent is where he is because he wants to be there then he is not getting screwed. He might be screwing himself but that’s his own business.

If an agent is stuck where he is because he can’t get away from them that’s completely different.

 

[Newby]

I hear you and agree for the most part. MY problem is when people on here bash the agency owner who is putting up everything except the easiest part which is selling the deal, and the "experts" claiming that they should get full comp or better contracts. Like I said...."What's 22% of NOTHING?". And if you don't generate leads yourself, you CANNOT rationally put a value on them enough to say that anyone deserves renewals or not.

And, bottom line is people can do whatever the hell they want.

It's all risk vs reward 100%. If you're an upline and going to encourage people to immediately try it on their own and profit off them, then you should also be held to the same standards that you're claiming the agency owners should (and I agree and have those standards) and let those people know their in for a serious shit storm while trying to get prospects and build up their business. Maybe throw in how many agents quit this business first year.

Maybe you guys do that. This gal got a GOOD deal.

But hey now she can go it alone next AEP and get those 85 deals. Can't wait to find out.

Well, if you’ve read my website or are familiar with my posts on this forum you would have your answer. We have always turned away more agents than we accept. Many agents just aren’t going to make it as an independent. We try to screen those guys out. It insults them more often than not. But it’s doing them a huge favor.

 

[justsayinisall]

wow thank you guys so much. I really appreciate everyone's input.

I did know what I was signing up for...well mostly. I thought I was getting full first year commissions. Other than that, I totally knew the deal As I said in my first post; this was a good 'first step' into going independent. I had inbound experience but I wanted some outbound experience under my belt. I'm getting that. I'm also getting to know each companies application process and applications (who will decline based on a medication etc). Is it worth all the residual money? Probably not but it's where I'm at. I have also been studying and passed my Life license. I wanted to do that before I went on my own.

Ok I loved the post where someone said (sorry I forget who); "you will starve the first year, eat McDonalds the second year, and if you can't afford steak the 3rd year, get out of the business"...something along those lines.

I know none of you can tell me what I could make but it's really hard to budget "you will starve" lol. Does anyone have any ranges on what a first year agent could make? Same for second year? I just need an idea if this is something my household can shoulder. I have the credit cards and a husband willing to work overtime to help pay bills.

 

[somarco]

WAY too many factors to say what you will earn, especially net, during your first year. Even if you decide that $24,000 ($2,000 per month) is conservative keep in mind you won't make $2,000 your first month or every month. Depending on when you start (Jan through Aug typically slow months) you could start out at less than $300 your first few months trending to $1,000+ half way through the year and end up $2500+ for the last few months.

If you need more money than you can generate from commissions you may have to take a part time (or full time) job while building your residual.

And yes, in the Medicare business, especially the supplement side, residuals are where you earn a comfortable living.