Commercial Appointment Setting Pay Structure

[Championpatriot]

Hello Everyone, First: I am working on bringing a professional appointment setter for commercial business. However I am having a tough time tracking down the payment/referral fee laws..They are a CA licensed producer but we are not going to appoint them with our company, rather just pay 1099 for their process of the sale. I know there are limits you can give a gift or referral in a lot of cases, however this is not a client but rather a business relationship.

Second: If in fact anyone knows the law for certain in CA and I can actually pay a licensed agent to do such work , I am working on the structure of pay, we expect to generate at least 30-40K in commercial premium at minimum. I was either thinking of going with a tiered system 15% for 0-20,000 dwp ... 20% for 20,000-40,000 dwp and 25% for 40K+ ? Or a flat across the board % .. Any Thoughts?

When I mention 25% I am referring to the percentage of the actual commission not the dwp

Another part I am having a hard time on determining is the charge back situation, I would of course hope any client we get on the book sticks with us but if for some unfortunate reason the company go's out of biz or they leave the state and the policy cancels prematurely in the first year I will get charged back and would have paid the percentage already..so also thinking of breaking it down so the 25% cut for example is broken down over 12 months..Half up front maybe , another half of that in 6 months and then the final payment at 12 months..Any thoughts?

 

[Bertolinoins]

Let me get this strait... You are going to pay a telemarketer 25% of all commission generated from appointments he sets?

 

[Championpatriot]

Yup! I plan on paying a telemarketer 25% of the commissions..

With that said..I not talking about a 20 year old college kid that has no real experience of knowing what a real appointment and real interest from a client is...no..so to make this clear I am working with someone that is very involved in Insurance...

25% is worth it..1) If I am able to have 40,000 in new premium in which I alluded to where he would make 25% that I did not have last month..no brainer..2) In order to get a professional to do a professional job and do it right to you pay accordingly..

Not a lot to lose if you ask me..feel free to give thoughts on how you would structure the partnership..I am also more curious on the laws..they are a licensed agent so paying a commission should be no prob right? The way I look at is if I was a professional marketer and I came to you and said this is my percentage fee and I will bring you business?? Thoughts anyone

 

[Sales71]

Why are connecting your commission with the telemarketer.

 

[Josh]

Not doing commercial, let me just ask the stupid question:

If the agent is already licensed and can cold call, why wouldn't they just finish the sale and keep the business to themselves? Even if they're not that way initially, wouldn't they want to "get a promotion" after a short period of being successful at that so they can make even more money?

If you were talking about someone unlicensed then I think that would be one thing, but I think you might be setting yourself up for a headache.

I'm not familiar with the chargebacks on commercial policies, but if you're wanting to go back on the agent for chargebacks you may want to consider just lowering the commission to offset the possible chargebacks rather than try to go back on them for it or keep them from having an incentive to not just go out on their own.

Other considerations:
-Do you have a system in place that already works?
-Is there a reason you couldn't get the agent appointed so the carrier is handling all the commissions/chargebacks/etc?
-Would it make more sense to recruit an agent that's getting a higher cut, but actually handling the entire thing?
-How much have you used appointment setting services and what type of results have you garnered from them?

 

[Championpatriot]

To poster Sales71..I guess I appreciate you commenting on the post..however your post is not helpful..I can tell you it is absolutely amazing to me the cynicism that agents have..I read through a lot of posts on this forum and the ratio of solid helpful advice to negative feedback or useless information is ridiculous..But just to repeat myself on why I am tying them to commissions..if I did not have the business before hand... why not share the wealth...I am a team first type of person where I like to share in success..Moving on..

To Medicareplansolutions- I like your questions..1)I have no system in place as of now, which is what I am trying to develop now..I do have agents including myself that will be doing the closing 2) For this particular person there is a reason we cannot appoint at this time..they are doing work for another insurance company unrelated to selling policies.. on the agent recruitment side..it is important to note this system I am working on was from a conversation with this professional looking outside the box to bring in more revenue for their family and I see no problems with doing so aside from what I am trying to figure out, i.e. how much to pay, how to deal with charge backs etc.. 3) I have not used any appointment setting services in the past so have no results to speak of.

I am a very busy agent, always with a client and always growing as I pride myself in doing what agent should for their clients and that is look out for their best interests first. This reflects on my success since starting as an agent with no insurance background..At this point I want to expand my growth but cannot possibly make the calls needed to get appointments, complete the policies, make sure the underwriting is smooth and service existing clients. So I know it seems odd to those that are not thinking outside the box and must have so much business they do not need to pay someone as aggressive as I am going to do...The bottom line is if I can add additional commercial policies I was not going to have in the first place and work a favorable return for both I and the person starting the process it is a win win..

 

[Sales71]

Champion sorry you took it that way. I been in business for 13 years and I had a lot of telemarketing program in my office.

I was trying to say you can pay them lets say for each lead that you will quote say $25 dollars. And say if you can close it say you pay them another $100.

My biggest client came from commercial telemarketing. Sold him a auto commercial policy. But took like 6 month to get him to move from AAA. Then his personal auto, home landlord policy and life insurance. Try to focus on a class Of business like painters, electrician, so you can have a good niche. Hope that helps.

Good luck.

 

[Josh]

I dig your concept and you calling Sales71 out.

I think the 25% isn't aggressive enough for the appointment setting.

Would the other agent be doing this full-time or does their other work require them to do this on the side?

How much cold calling has this agent done? Would it be worth it for you to pay the agent $100 just to dial for a few hours and see how things work?

If you aren't currently cold calling and this agent hasn't done it much before, I don't think anyone is going to like how this works out. It's ambitious and can work great, but the problem is usually in the execution. Developing an effective outbound campaign takes time and commitment. If this guy is working another job and this is for supplemental income, I think he'll get cooked sooner than it starts to get traction. If you can afford to pay him $15/hr or more (or less if he'll go for it) to keep him earning money while he's dialing (make it a draw if you like) then you'll get better results. Telemarketers rarely do well on just a commission split and that is the case for a reason. Usually a telemarketer is getting beat up on the phone and even if they don't let it get to them, it's something they're dealing with. Add to that the fact that they aren't making money if they're getting their teeth kicked in and that they don't know what they're doing and it might take months for deals to go through if they even go through and their car payment is late and their wife wants more time with them and.... You get the idea. Even if it's just a few bucks, mentally it goes a long way for the sanity of the telemarketer if they're going to be getting paid win, lose, or draw. It's more of an investment, but in my experience that has worked better than anything else.

If you move forward with this, hopefully it works out and everyone is more than satisfied with what happens, but if I were in your situation those are some of the considerations I would be making.

 

[Championpatriot]

Sales71..I understand your experience in the business can lead to your initial response as it is a dog eat dog business..

The insurance company I work with does have a list of provides that they have approved to be on our co-op list...in other words they will pay 50% of the cost we incur once we submit our invoice for the particular companies service..I have been looking into this option as well to see how they do..I know they should have some respectable results as the major insurance carrier I represent would not put them under this program..

On the other hand the reason I brought up this alternative and was looking for some insight is because of the caliber of the person I am dealing with in regards to this possible relationship..for example if for any reason I wanted to look for outside work to supplement my locked salary position lets say to add additional income..Any of you for example could feel very comfortable in setting up such an agreement that I am proposing with me to deliver results for you..simply because of what i expect from myself and knowing what you would need for the best chance to take the lead to the finish line, with little intervention from you..You would simply have more qualified leads and therefore a chance to gain more clients.

This is what I am dealing with here for this particular individual, the way I was seeing is if I said to him, well what if I paid you hourly at $15 hr per say or gave you $25 per lead and the ability to earn more per lead if we do well..Both of those options really do not promote the best environment I am looking for. And that is all prospects that they bring are well qualified and set up in a seamless manner where they not only open the door to the client but basically have them ready to really take a serious look. I know this may seem Utopian but the fact is if I was doing the calls for you, it would be just that. In other words the relationships I can build over the phone are the direct results of my current success. So far in my conversations with my possible partner in this point to a similar mindset.

I am going to take your thoughts into consideration and I will speak with him about the ideas you guys have provided, this will show his real confidence if I instead propose a generous split from commissions earned..If either of you were looking to do the same thing and I happen to be someone interested and you said to me I will pay you $25 per lead up to $100 or 15 hr or said instead I would like to propose an aggressive percentage I would take the commissions all day long. Again, I know I would deliver results..because I already do now and have been doing so consistently.. I am also using large numbers to make this possible, obvioulsy a $2000 personal lines policy that would pay the agency only $340 lets say is not what I am going for..The goal is to go after small to medium sized companies first.. A 4-7 Commercial auto policy is going to get near $10,000 in premium..not to mention getting the workers comp , GL etc..So the premiums could get big real fast if done correctly.

With all that said I think, (not you guys) the public in general people put way to much emphasis on getting paid by hour and getting something without an effort from driven results. This is a results driven business so that is why I am treating it as such. So needless to say I will not be looking at the "general public" to accomplish this goal. With that said I am glad that most cannot hack it in the sales world.. otherwise our commissions would be squat!

Sorry for the long post! Again thanks for your thoughts, If I go ahead and implement this I will post a follow up on the results.

Good Luck out there.

 

[Josh]

I know they should have some respectable results as the major insurance carrier I represent would not put them under this program..

Unless you've been talking to other agents doing the exact same thing, you might be surprised.

This is what I am dealing with here for this particular individual, the way I was seeing is if I said to him, well what if I paid you hourly at $15 hr per say or gave you $25 per lead and the ability to earn more per lead if we do well..Both of those options really do not promote the best environment I am looking for.

I completely disagree with you. If you pay an hourly or per lead and then us that as a draw against the commissions, that is creating the ideal environment. A good telemarketer is worth their weight in gold and keeping them happy. You're only looking at it from your perspective and from the perspective of "what have I got to lose?" What you're also saying is "I'd like to get something out of virtually no investment" and then you'll be surprised down the road if this doesn't work.

I am going to take your thoughts into consideration and I will speak with him about the ideas you guys have provided, this will show his real confidence if I instead propose a generous split from commissions earned..If either of you were looking to do the same thing and I happen to be someone interested and you said to me I will pay you $25 per lead up to $100 or 15 hr or said instead I would like to propose an aggressive percentage I would take the commissions all day long.

It shouldn't be an either or, it should be both. If you want to offer the right type of compensation package for a good telemarketer that's an agent, it should be $10-$15/hr as a split against future commissions. If you don't think they're worth it then you should probably move on.