Producer Compensation

[CaNewAgent]

My wife is in the position where she needs to hire staff to keep growing her agency. She started a little over two years ago and has spent that time building the business from scratch.

She does not buy leads. She wants them to cross sell existing customers and wants them to spend part of their time outside of the office knocking on doors, like talking to small auto sales businesses.

She is a captive agent.

How should she structure the pay/commission for producers that have passed their P&C exams but have no sales or insurance experience?

 

[Josh]

I think she's in a little bit of a pickle. If she was building her business from scratch, my guess is there isn't much in her book to cross sell, especially if it was only over two years and if she's captive.

Odds are if she has a rookie agent knock doors of businesses, no one is going to be happy with what happens, that's just the statistical likelihood of things.

That being said, she may want to consider the following:
-Hire agents to do service work (if that's bogging her down) so that she can focus on growing her book.
-Hire agents on a straight commission basis, but give them a generous split so they have a vested interest in really making it happen (probably not ideal, especially if she's captive).
-Hire agents to do nothing but cold call and/or work leads and pay them an hourly with a little bonus on sales.

A good question for you/her would be, what is she trying to accomplish? More sales? Less service work? More time at the golf course?

 

[DS4]

With HIPAA now only paying 2.5%, you should make all HIPAA applicants give you a gift basket.