Staffing Up Your Agency
When you open the doors to your first insurance agency, you’re wearing all the hats in the office. You’re your own CSR, Producer, and Bookkeeper. You don’t have the money to pay for additional staff. Your day likely looks like this:
Going into the office, you intend to see the day close out with 5 policies sold. Yesterday you sold 3, and today you want to do even better! You remind yourself to make sure the paperwork from yesterday gets filed. You unlock your office doors and the phone on your desk is already ringing.
It’s a customer calling with an issue about his claims filing. While you’re answering his questions, another client walks in to make a payment on her homeowner’s policy. You worry she’s growing impatient the longer you’re on the phone.
Once you wrap up your call, the customer waiting in your office puts away her checkbook. She no longer simply wants to make a payment. She wants to discuss what she overheard you say on the phone. As you answer her questions, the phone rings again, on two separate lines at once.
And your office has only been open for 15 minutes. So today, in all likelihood, you’re not making a dime, because you’re already backlogged.
By the time you get around to answering all the missed phone calls and filing the paperwork from the policies you’d sold the day before, it’s 3pm, and you haven’t gotten around to microwaving the frozen meal you brought for lunch.
With all this, marketing is a long-term goal you’ll have to put off until tomorrow (at least). You’re scrambling to take care of your valued clients. When a potential customer stops in and just happens to mention her son’s upcoming 16th birthday, an alarm should sound–this is where your sales skills ought to shine–her son is turning 16! He’s going to need auto insurance. You could offer her the service she can only get from a local agent who understands her insurance needs as well as her community.
But without a support staff to answer the phone, or even the door, when you speak to the woman mentioning her child’s birthday, you’re preoccupied. You hurry her out of the office and destroy any opportunity to continue doing business with her. Now, when he turns 16 and her insurance needs change, she’ll do business with your competitor, instead. And on top of it all, you’re exhausted. You might think that you can’t hire anyone until you make money. The truth is you can’t afford not to staff your agency!
After all, in the insurance industry, you’re either growing, or you’re stagnant. Even if you sell 2 or 3 policies today, you won’t sell 2 or 3 policies tomorrow, because you’ll be too busy finishing paperwork from the day before. You just can’t grow your business like that. In order to maximize efficiency, I highly recommend hiring to your weakness. My weakness is paperwork. In fact, most agents are great at sales and terrible at paperwork. Hire someone who’s great at what you’re terrible at doing, so you can continue to sell. To find quality staff members, you can use your local network, and you can even ask your clients (which also lets them know that you place a premium on their referrals).
When you consider your staff, I personally don’t think it matters whether or not they have a degree. Find the right person and train them. Keep in mind, in most states, unlicensed CSRs can’t even tell a customer what type of coverage they have on their auto policy. Moreover, having a license in most states just makes it okay to talk premiums and coverage to existing clients. It doesn’t mean the agent or producer can sell. Hiring a P&C agent usually takes 6 months to ramp up before they pay for themselves. But don’t worry, by selling a few life insurance policies, you can cover their cost. And their help will enable you to make those sales you otherwise wouldn’t have had time for. I recommend having one staff member per 1000 policies. And forget part-time employees. Focus on licensing your initial staff and then teach them to train further staff and cross sell to your clients.
Payroll doesn’t have to be difficult either. I use the online version of QuickBooks, which keeps all my bookkeeping in one place. Our commissions-based, small-business industry can create some difficulties when it comes to compensation. A lot of agents choose to pay their employees either by salary or hourly with a compensation package. Most have their CSR on salary with the producer getting a commission split. Some companies offer a higher salary without commission on a sale, but I’d recommend providing incentives, so I offer a percentage of the commission the agency receives on the sale. Junior agents and producers are more motivated when they have a stake in the agency. There is the security that a salary provides, but remember, it’s not all about salary; there are bonuses, paid time off, and workplace flexibility.
The most important thing is to build a team and train them to be successful. I learned a lot building 3 agencies from scratch, and I love connecting people with ideas and helping others grow. Don’t forget, your staff’s success ensures your own.
If you have any questions, feel free to give me a call! 619-900-5533