The Perfect Agency

[James]

With all this talk of this agency or that agency with free leads but take a lion share of commissions. Now all this talk has me thinking, what would constitute a near perfect Agency that balances a working enviroment for the Agent and Agency?

I envision some sort of Co-Op type of situation where the Agent would get benefits and give up some commissions to the Agency but on the other hand would be invested base on time and business place to the Co-Op or Agency. In other words as the Agent places business they would become part owner, on the basis of how much business they place. The highest producers would move to the top yet the balance would be to achieve the ability for the enviroment to be a healthy start to the new Agent at the same time.

 

[Crabcake Johnny]

Have it be structured like a partnership in law offices where good producers eventually share in the agency profits, vest and have a reason to stay and produce.

 

[James]

I was thinking more in line with a farmers Co-Op. I think having different departments (minie agencies under one large agency) for specialities would be grand. Than you would have the idea of cross selling, the health agent transfers his client via referral to a life agent than their would be a share commission structure all knew upfront. Than the partnership would go up through the sibling agency than you graduate to the parent agency as. Or you could use VP and Pres of the sibling agency than the Pres of a smaller agency can move up to the parent agency as a VP.

 

[Crabcake Johnny]

The pefect agency would take care of all the BS work associated with this business and allow the new agent to strictly concentrate on sales. Once the sale is made the agency should babysit it through underwriting, send the thank you card, call the client with status updates, and set up that new client up on the agency's newletter. That frees up the agent to come into work everyday and simply worry about getting new clients.

The problem with this business is you have to be the janitor and CEO. I have to get new clients every day yet I'm at the post office mailing out packets, then putting out fires in underwriting, trying to get clients to call back with more medical information, etc...

 

[James]

I would think a in house boiler room for lead generation plus websites and ad's would be in the mix. Along with secretaries and office managers, of course this would have to be an agency that generates some business!

Than you have the whole commission thing and maybe a 1 year beginning salary which has to be tied closely to a goal scheldule.

 

[Crabcake Johnny]

But the agency would still have to protect itself and make a profit. The perfect agency would indeed have a fair commissions structure and provide free leads. They would also have to immediately fire people who can't produce or people who always have an excuse as to why they can't work a full 40 hour week.

The biggest problem from the agency's standpoint is you can interview people all day long, check their references, do another call-back, etc....But you never know what you have until you hire people. Interviews are like first dates - everyone's on their best behavior. It isn't until a committment is made that the person starts calling with "My tire blew out on the way to the airport to pick up my grandmother so I can't make it in today."

So the perfect agency would basically say "Listen, here's 50 leads. You either close at least 3 of these or don't let the door hit you in the ass."

 

[James]

Good point, I think I would make employment base upon condition. Sure give them some leads, if they can close XX amount of sales from XXX amount of leads they can come into fold. Or you could give them 10, they come back with two sales than you give the twenty if they come back with set amount of sales than they can become employed. If they don't want to be employed or captive than you could always sell them leads, maybe on credit as an additional way of creating cash flow for your boiler room.

Plus it really doesn't have to perform at a profit level. You simply have managers and higher ups on salary and than profit sharing, profits would of course be for everyone on a sliding scale. Yet I'm wondering to do this exactly what amount of commissions levels are we talking about? For Health I'm thinking around 15% if say with Assurant that has a 20% street rate, life would be around 80% and the agency recieves 20-30% of commission and the override. Yet I'm not sure if that would be enough for a agency to survive on if they did what would be consider the best balance agency between agency and agent.

 

[Crabcake Johnny]

Hiring salespeople is a bit like herding cats. Salepeople by nature don't like to be told what to do - especially one's who actually produce. That the reason they're in the sales field in the first place and not some ass't manager at Walmart. Good salespeople want to control their own destiny.

It's a failed concept that a good sharp productive agent will sit behind a desk all day. They want more freedom than that. Crappy salespeople will sit behind a deck and get free leads until the cows come home - they also can't close a barn door with a tractor. What are you gonna tell your number #1 producer when he says "ain't coming in today - got things to do." You're not gonna fire him but the other shleps in the office now start saying "so he gets to come and go and we're stuck here?"

So when you can't control your top people (any attempt to control them and they're out the door since they know they can do anywhere and make money) and the people you can control don't produce you get to the "mass hiring" or "throw it against the wall" systems NYL, UGA, NAA, Aflac, etc...must use to stay in business. It's not that these outfits want to turn and burn people. It's simply the nature of the beast.

 

[Guest]

John's mention on how good producers value their freedom to set their own calendar:

Friday afternoon I got a call from a guy in Fresno (not even close to me in Sacramento) representing Union Bankers Life. He told me he would give me free leads and give me overrides on anyone I recruited (sounded MLM). I've heard that 'final need' insurance is a good product (basically micro-DB term life) and is popular in certain demographics, so I was interested.

I asked him "Are these leads or appointments?" He said "appointments."

I said "I need the freedom to set my own calendar and daily agenda. I'll take the leads and agree to a time-period that they are to be worked, but I don't want anyone telling me where I have to be (drive to) and when."

He immediately thanked me for my time and hung up.

Al

 

[Crabcake Johnny]

But what if "freedom" = no money? Would you rather drive around on three pre-set appointments a day, make 15% commish and make $1,500 for the week or be at 25%, piddle the day away and make nothing?

I can't even think of how many agents I've hired at full 20% full year advance commissions. Freedom is the reason almost none of them are producers.

And if I was running that "perfect" agency the agents would be w-2 employees with "and you'll be at the office by 9am sharp." Working from home with full freedom is a failed business plan by 98% of everyone who attempts it.