The secret is ownership or advancement. The one thing that State Farm, Allstate, farmers, madam, etc.all have in common is that their pool of sales agents comes from aspirants to their own agency. Nothing makes a person work harder than the carrot of advancement or self employment. It's worth more than actual money. You need to give them a visible path to their own agency and help them get there. It will work miracles in your recruiting.
How to Add New Agents to Independent Agency?
- Thread starter epitome
- Start date
- 15,041
You seem to be missing what Twilight is saying.
Anyone worth your while coming out of college isn't looking for straight commission without an upside. If they join a startup, they want equity as the payday when you sell out. Of course, insurance agencies don't go public and definitely not for insane multiples of revenue.
So you are left with offering a base + commission. If the base isn't enough for them to pay their student loans, have a cheap apartment and eat ramen noodles, it isn't likely to interest anyone you'd want.
Your going to be fighting the same battle every insurance company in America is fighting. Trying to find good agents. The really great prospects want ownership and the ones that just want a job aren't salespeople. This is a problem everyone has. It's why insurance companies spend Te resources they do recruiting. Unless you have something to offer that differentiates you from the rest you'll be stuck with mediocre sales reps. And have lots of turnover. Welcome to ownership. I ran a 200 agent P&C call center with benefits and starting base of 24k where top agents made 60k and still had 50% turnover over every 6 months. It's the way of the world.
Championpatriot
Expert
- 45
Hello Wow..I am a 1099 agent for an agency, have been for 8 years and your questions relate to exactly what I am trying to achieve..if you like see my post here: http://www.insurance-forums.net/for.../commission-split-renegotiation-t69116-2.html
In regards to your question on what type of ownership, I always had the idea that would allow me as the producer to have piece of mind to focus on sales and growing the agency is to mirror some type of ownership based on the percentage of ..Taking into account your agency owner expenses of course
So for example if I am starting out at 100% commission if in three years I produce enough where my clients make up 30% of the book then I should own a 20% stake in the company. After phase 1 is complete continue to create a similar roadmap for more ownership but include adding another producer under me I can mentor and help grow, where I will make some type of override, but not to much to where it is not beneficial for you as an owner and also leaves enough to give generous splits to the producer I mentor and help succeed. And again setting a target on total DWP and/percentage of the book written by me and my producer for additional stake in the company. You cannot lose this way, weak producers will flame out, you will very likely keep the clients they wrote and now have 100% of the commissions there, and the strong agents will just help make your companies history.
This leaves the really good producer no reason to ever want to move on to their own in the future, rather you build an agency into a solid firm. At the same time does not reward a weak producer and you are taking little financial risk if they are 100% commission.
Obviously my 30% total DWP/percentage of the book and 20% ownership is just an example as each agency has their own overhead costs to contend with making a fair deal come together. However I cannot stress enough that if you have a good 100% commission agent, quite frankly they deserve some sort of set up like this. They are taking a risk as well, it may not be as big of a risk you are but its a risk. So this is why the "owner" owns the larger cut of the book as they have the larger percentage of risk. But its fair someone that helped you build it and the actual kind of work that goe's into is acknowledged. Building an agency is well more than about sales, you have to deal with underwriting, service calls, amendments, charge backs from cancellations, rate changes that throw you calls into a frenzy, stunting new growth, prospecting and it go's on and on. If the good producer does this stuff in unison with you then their the real deal.
Some people on my other post were saying they would not pay an 80/80 split at 100% 1099 status. My guess is they have 25% reps..Not 25% in commission but rather at best 1 and 4 of their new hires split or flame out within 6 months and cost them more of they found an experienced agent that did not need a baby sitter and salary.
In regards to your question on what type of ownership, I always had the idea that would allow me as the producer to have piece of mind to focus on sales and growing the agency is to mirror some type of ownership based on the percentage of ..Taking into account your agency owner expenses of course
So for example if I am starting out at 100% commission if in three years I produce enough where my clients make up 30% of the book then I should own a 20% stake in the company. After phase 1 is complete continue to create a similar roadmap for more ownership but include adding another producer under me I can mentor and help grow, where I will make some type of override, but not to much to where it is not beneficial for you as an owner and also leaves enough to give generous splits to the producer I mentor and help succeed. And again setting a target on total DWP and/percentage of the book written by me and my producer for additional stake in the company. You cannot lose this way, weak producers will flame out, you will very likely keep the clients they wrote and now have 100% of the commissions there, and the strong agents will just help make your companies history.
This leaves the really good producer no reason to ever want to move on to their own in the future, rather you build an agency into a solid firm. At the same time does not reward a weak producer and you are taking little financial risk if they are 100% commission.
Obviously my 30% total DWP/percentage of the book and 20% ownership is just an example as each agency has their own overhead costs to contend with making a fair deal come together. However I cannot stress enough that if you have a good 100% commission agent, quite frankly they deserve some sort of set up like this. They are taking a risk as well, it may not be as big of a risk you are but its a risk. So this is why the "owner" owns the larger cut of the book as they have the larger percentage of risk. But its fair someone that helped you build it and the actual kind of work that goe's into is acknowledged. Building an agency is well more than about sales, you have to deal with underwriting, service calls, amendments, charge backs from cancellations, rate changes that throw you calls into a frenzy, stunting new growth, prospecting and it go's on and on. If the good producer does this stuff in unison with you then their the real deal.
Some people on my other post were saying they would not pay an 80/80 split at 100% 1099 status. My guess is they have 25% reps..Not 25% in commission but rather at best 1 and 4 of their new hires split or flame out within 6 months and cost them more of they found an experienced agent that did not need a baby sitter and salary.
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