I run an insurance agency, and have a couple agents as 1099 contractors.
My contract with these agents addresses direct referrals - if they have a piece of business they can't / won't write themselves, they can give it to me for a 30/70 split. (I write, administer, and maintain it in this case - basically 30% for feeding us a lead. No work on their part.)
However, I've run into an interesting exception. One of my agents introduced me to a friend of his whose company (call it "X Corp") is working on a large project for an association and wants me to get involved. This is generating a lot of potential business as follows:
(1) Work directly involving said large project - e.g. insurance for the association itself. I am treating this as direct referral business.
(2) Secondary work involving association members (i.e. referrals from the association - this is the bulk of where new business will come from)
(3) Side referrals from X Corp for their other clients not discussed in the original meeting
Note: Said agent specified he wants to write some of the business directly, but apparently our contacts at X Corp and the association stated they'd prefer to work with me directly. This further complicates things.
I am unsure how to fairly split business for #2 and #3. In these cases the agent's referral source is opting to refer directly to me (bypassing the agent) and it is not an insignificant amount of business. However, I have no intention of cutting him out of the deal because this revenue stream would not exist if it wasn't for the introduction. My concern is that giving him 30% of all this business for making one introduction to a secondary referral source seems excessive.
Agency Owners - how would you handle this?
Sales people - what would consider most fair?
My contract with these agents addresses direct referrals - if they have a piece of business they can't / won't write themselves, they can give it to me for a 30/70 split. (I write, administer, and maintain it in this case - basically 30% for feeding us a lead. No work on their part.)
However, I've run into an interesting exception. One of my agents introduced me to a friend of his whose company (call it "X Corp") is working on a large project for an association and wants me to get involved. This is generating a lot of potential business as follows:
(1) Work directly involving said large project - e.g. insurance for the association itself. I am treating this as direct referral business.
(2) Secondary work involving association members (i.e. referrals from the association - this is the bulk of where new business will come from)
(3) Side referrals from X Corp for their other clients not discussed in the original meeting
Note: Said agent specified he wants to write some of the business directly, but apparently our contacts at X Corp and the association stated they'd prefer to work with me directly. This further complicates things.
I am unsure how to fairly split business for #2 and #3. In these cases the agent's referral source is opting to refer directly to me (bypassing the agent) and it is not an insignificant amount of business. However, I have no intention of cutting him out of the deal because this revenue stream would not exist if it wasn't for the introduction. My concern is that giving him 30% of all this business for making one introduction to a secondary referral source seems excessive.
Agency Owners - how would you handle this?
Sales people - what would consider most fair?
