Closely examine strategies and behaviors to become the producer you want to be

By: Roger Sitkins

According to recent studies, fewer than 15% of independent insurance agencies practice effective true sales management. (Perhaps the key word is “effective,” as in “getting results.”)

So if sales management is essentially nonexistent in independent agencies, how is it that we have producers with $1 million of commission income on their books of business? (We used to kiddingly say that until you get to $1 million of commission, you’re still a Producer-In-Training!) For that matter, how can we have producers generating upwards of $150,000, $200,000, $250,000 or more of new revenue per year without sales management?

(At this point, please don’t panic and stop reading, thinking that this doesn’t apply to you. The $1 million book and the annual new business amounts may, in your town, be considerably more or less in another market. It’s all relative to where you are and where you want to go.)

In the absence of dedicated sales management, many top producers thrive, thanks at least in part to self-discipline. According to Harvard University researchers, high achievers in all areas of life have the following four traits in common:

• They set objectives.
• They employ the practice of analysis and establish plans “distinctly tuned” to the situation.
• They decide how best to allocate their time and focus their energies.
• They manage themselves by focusing on one task of prime importance at one time.

That sounds to me like they are self-managed, regardless of whether they’re in sales or some other profession.

Self-managed But Accountable

The definition of self-management is fairly straightforward: to provide guidance for oneself. But while I believe in self-management, I also believe in accountability (i.e., Did you do what you said you were going to do?).

But in most agencies, accountability has no clear definition or any mechanism for followthrough or sustainability. It sounds like a great idea at the beginning of the year, just like most New Year’s resolutions, when the sales manager proclaims: “This year we’re going to hold everyone accountable,” and, “This year, we’re going to check up on everyone to make sure you did what you said you were going to do.” And typically, the employees will comment to one another, “Don’t worry. This, too, shall pass.” They know the idea will soon be forgotten.

Conversely, the best agencies have a true culture of accountability. It’s more than doing what you said you were going to do. It starts with understanding what you’re accountable for, namely results. At the end of the day, it all comes down to results.

The results we look at are broken out in two ways: outcome stats and performance stats.

Outcome stats. For a producer, these stats are fairly simple and comprised of gross commission income, net new commission and retention percentage.

Performance stats. These are the numbers that drive the outcome stats, such as the producer’s conversion rate, closing ratio, revenue per sale/new relationship and number of at-bats. If they improve in every one of these performance stats, their outcome stats automatically improve.

So if I improve my conversion rate (my first appointments that move forward to second appointments), I’ll have better outcome stats. If I can improve my closing ratio (the percentage of people who say yes vs. those who say no), my outcome stats improve. They’ll also improve if I increase my revenue-per-sale by raising my minimum account size. Ultimately, if my quantity and quality of at-bats improve, my outcome stats improve. It’s pretty simple.

Other than numbers, what else should producers be held accountable for? If the goals are solid—lofty but attainable—and the producers are ahead of goal, probably nothing. They’re giving you the results you want.

Strategies & Behaviors

If producers are not ahead of goal and aren’t getting the desired results, then we need to closely examine the strategies and behaviors that are creating the numbers.

Reverse Performance Management. Even though fewer than 15% of agencies practice true effective sales management, someone still has to hold producers accountable. Traditionally, they report to whoever is wearing the sales manager’s hat that day. But there is a better way.

The method that we find works best is Reverse Performance Management (RPM), which involves reporting up, not down. It’s not management coming to producers to have a discussion with them about their numbers. It’s about the producer reporting to the manager. This requires relentless preparation from the producers.

As I was writing this, I flashed back to the days when I had my own agency in Michigan. I’ll never forget a comment one of the producers made right after we had instituted sales reports. He told me that as much as he hated filling out the reports, he loved doing them. My response was, “What?!” He was quick to explain. “I hate doing them because they’re so detailed and, frankly, details are not my forte. But at the same time, I love doing them because they force me to face the truth that tells me where I really am. I can’t kid myself or feel good about myself if I shouldn’t. It’s better when I face reality.”

The words of that producer still ring true today. I firmly believe that all progress starts by telling the truth. When they’re done properly, sales reports are a way for producers to face the truth. This brings to mind another of my favorite old sayings: “The truth shall set you free, but first it will make you miserable.”

Producer Performance Agreements. If you’re serious about making producers accountable, you really should have producer performance agreements. These are not employment contracts. Rather, they’re a formal identification and outline of performance expectations in the coming year. These agreements should include different sections for each of the following:

Numbers. This includes the sales goals, as well as the outcome stats and the performance stats. Unlike numeric reporting, this is an account of the goal vs. the actual. As such, it indicates whether a producer is on track or off track.

Strategies. There must be an agreement on the specific strategies and behaviors that the producer commits to in order to achieve better results. Some examples of strategies include:

• Following a set offense. This is the unique and branded model you use to differentiate yourself in the marketplace. Without it, you are just another vendor of a commodity.
• Following a networking plan.
• Having full-time clients only.
• Team selling vs. lone wolf selling.
• Implementing a continuation process vs. a renewal process.
• Initiating formal relationship management programs.

Behaviors. These are the activities that are tied to the strategies that get results. For example:

• Doing low-risk practice and presentation rehearsals.
• Asking for referrals and introductions.
• Following the producer’s perfect schedule.

The producer performance agreement really becomes the agenda for RPM meetings, which should be held every month. In preparation, the producer should develop an agenda to review the numbers, the strategies and the behaviors, and rate their performance on a scale from one to 10. Did they do everything they said they would do? Did their results match their goals? If not, how closely were they aligned? How did they rate on each of their strategies and behaviors (10 = followed it perfectly; 1 = didn’t even think about it; 5 = average)?

With RPM, the manager’s job is really pretty simple. Their primary duty is to make sure the meeting is held! Hopefully you remember me mentioning the owner who joked that his agency was “very good at having unheld, scheduled meetings.” Listen, if the sales manager doesn’t think these meetings are important, neither will the producer.

During the RPM meeting, the manager becomes the producer’s coach and the mentor—not the sales ogre who berates the producer for numbers not delivered. Instead of focusing on the numbers themselves, a productive coach and mentor will focus on the strategies and behaviors that result in the desired numbers. Together, the coach and producer can then identify the areas that need improving and formulate a plan to do so (joint sales calls, for instance).

The Bottom Line

British Prime Minister Benjamin Disraeli once said, “The secret of success is constancy to purpose.” I love that and often cite it because it’s true. Whatever your purpose, be consistent about it. The best self-managed producers have that “constancy to purpose.” They are constantly focusing on their behaviors and strategies—that’s their purpose.

So remember, the future great producer that you personally want to become, or your agency wants to develop, is a matter of choice not chance!

The Author

Roger Sitkins, CEO of Sitkins Group, Inc., is the nation’s number-one agency results coach. His latest offering is The Agency Results Game Plan. This web-based platform is based upon The Eight Levers that Drive Agency Results and is designed to help independent insurance agency owners create the agency of their dreams. To learn more, go to www.sitkinselect.com.