What’s Your Hook? How do you open doors as an insurance sales producer?

Hello world!  I hope that all of you are doing well.  Things are great here in the Hawkeye State!  Fall is here and we are having the best weather of the year!  This week I want to touch on something that I feel is really important to producers.  I call it the hook.  I’m sure that there are a lot of other terms out there for it.  Simply put, the hook is what you use as a producer to differentiate yourself from the rest of the crowd and to open doors with potential clients.  Here’s why the hook is so important.

Years and years ago when cavemen started selling the prevailing thought was that there were two ways to be a successful salesperson.  First you could have a winning personality.  Secondly, you could cold call, pound the pavement, and press the flesh as much as possible under the understanding that if you call 100 – 200 people a week you can get ten appointments that will yield 1 – 2 wins.  Combining this strategy with a winning personality, good looks and  a couple of books by Zig Ziglar and you were good to go.  

Is this the type of sales producer you want to be like?

This strategy worked and still works to a degree today.  However, the problem here is twofold:

·         If all you do is call 100 random people each week for the rest of your life you will get burnt out. 

·         You have no real power as a salesperson – ultimately this is left to chance as “playing the odds” means you are hunting for people that will talk to you

This is where the hook comes in.  If the volume approach is focused finding people that will talk to you, the hook is a way to get the people you want to talk to to listen to you.  This solves two problems.  First you don’t have to call 100 people a week because you are increasing the likelihood of success and secondly you are getting people to talk to you because they want to hear from you about something, not because they have some ulterior motive like being mad at their broker.

When I talk to producers, one of the first questions I ask is “How do you build your business?”  It seems like a simple question but you would be amazed by the amount of top flight producers that can’t answer the question.  Some people share how they prospect – this is good.  However, what you need to know is why people talk to you.  I talked to a producer yesterday that writes large contractors.  He shared with me that he has become a workers compensation specialist and what he does is comes in and talks to potential clients about comp and then flips the conversation into a sales call.  This is the hook. 

The good thing is that most of you are doing this.  However, many of you are doing it unconsciously.  If you identify what your hook is and then actively try to replicate it you will have more success.  So… What’s you hook?

That’s all I've got for today.  Have a great week!

As always please let me know if you have any questions or comments.  I can be reached by email at sthompson@insurance-csg.com.  I’ll see you then!

Check out some of my recent articles on the blog here:

Does your Commission Split Really Matter

The Six Biggest Challenges Faced by Insurance Producers

How Insurance Producers Can Use Social Networking to Increase Sales

Texas A&M Leaving the Big 12 and What Lessons You Can Learn From it for Your Career

Four Skills that Every Account Manager Needs to Succeed 

Hey Producers! Does your commission split really matter?

Hi there!  It’s been awhile since I've been on here.  I apologize for the delay.  I’m happy to say that things are going terrific here in Iowa.  Ava, my oldest, is in 1^st grade!!!! Mia, my middle one, is in her first year of preschool, and Kai, my baby, is literally running everywhere.  Life is busy here to say the least. 

As many of you know, my specialty is working with people in the insurance agency and broker world.  My area of emphasis within this are producers, account managers and account executives, value added service staff like claims and loss control, and senior management.  As I've been talking to producers lately, I've noticed a trend.  Many of the producers I’m talking to are thinking about their commission split. 

Based on my experience the typical split in the industry is a 30/30 new and renewal split.  From there the percentages go up or down based on resources and company philosophy. 

A great commission split does not mean you'll be swimming in money...

 Additionally, I see three variations on this:

Graduated Split

This is a split that I personally think is the most attractive.  How it works is that the producer’s split increases over improves based on certain trigger points – typically this is either annual new business production or overall book size.  I like this because it rewards long term success.

Unequal Split

The unequal split is a split geared towards rewarding a very specific behavior.  Typically I see this in an organization that values new business production and in it they might offer something like a 40 new 20 renewal split meaning that in order to keep up your level of income you have to keep selling new business. 

50/50 Split or higher

This split is one that many producers crave as they feel like it adequately rewards them.  However, there is a downside to this type of split.  First, in many situations the producer assumes a lot of the expenses which effectively draws the split lower.  Even if this isn't the case the increased splits means that there is less money in the pot for the agency to invest in resources for you to keep growing your book. 

So what does this all mean?  First, I think that it means that there is no magic bullet when it comes to splits.  If there was one that worked better than others then everyone would be using it.  Secondly, I think that it means that in most cases, especially in the unequal or equal split (the graduated split is a different animal that truly can offer you more in my opinion), that I would argue producers typically end up in the same spot.  What I mean by this is that if the baseline is 30/30 any change up or down in most cases reflects investments in resources or staffing.  A really high split might be attractive if you feel you can manage your expenses better than others.  The lower split might be better if you need expensive resources that are easier to swallow with the pooled resources of the entire agency. 

Ultimately, I think that producers spend too much time focused on their splits.  Although there are certain outliers where the splits are unusually low or lucrative, in most cases they are a wash from company to company.  Instead, as a producer you should be looking at if the organization can help you maximize your production and through that your earnings.  After all, a 35/35 split of a $1MM book of business is better than a 50/50 split plus expenses of a $600K book of business.

Have a great week everybody!!!

As always please let me know if you have any questions or comments.  I can be reached by email at sthompson@insurance-csg.com.  I’ll see you then!

Check out some of my recent articles on the blog here:

The Six Biggest Challenges Faced by Insurance Producers

How Insurance Producers Can Use Social Networking to Increase Sales

Four Skills that Every Account Manager Needs to Succeed

Bad Customer Service Experiences

Four Keys to a Great Reference

Three Things that Account Managers Should Do

Six Interview Tips Part I