Solving for Non-Producing Producers: Creating Strategies for Sustained Growth

Video Transcription

Hi, I’m Don Folino, and I’m Vice President of Growth Advisory here at MarshBerry.

We know the main responsibility of a producer is to sell and generate new business. We also know the insurance industry is susceptible to complacency, and complacency kills. It’s harsh, but it’s real. We start taking our book for granted, we lose accounts unexpectedly, and we allow outside conditions to control our financial well-being. Without the continuous push for new business, our destiny is mostly outside of our control.

The argument is often made that a producer has earned the right to sit back. They’ve worked hard to build a successful size business in their eyes, but essentially, are they saying they’re retiring without officially retiring? As a business owner, are you coasting prior to retirement, or are you working hard day in and day out to take your investment to the next level? Now, addressing non-producing producers can be a challenge, but it’s not impossible. You need to ensure you assess motivation through new business production goals and compensation plans that push for new business production, as well as creating a culture of accountability within the firm. Firms that have clear new business goals for producers, including a minimum annual new business requirement, tend to have higher organic growth rates in new business production.

Firms that treat nonproducing producers who are not hitting their minimum new business goals as producers can be damaging productivity. So what do you do? First, create accountability with new business requirements. This often can be found in a model we call the Carrot and Stick Compensation Model. Where producers actually have the ability to earn higher new business commission rates when it hit certain stretch goals, but on the flip side, the stick comes into place and if they don’t hit their new business goal, they’re going to get a reduction in renewal commission on their book of business. That alone won’t cut it; you need to make sure that you’re reviewing goals and progress, and a minimum on a quarterly basis with producers. The second big component is actually shifting non-producing producers to account executive roles. Account executives play an extremely important role in brokerage firms. Reassigning this non-producing producer to a service role may allow them to shine and actually be more effective. Account executives are mission critical and as important to your firm as producers are. And finally, the third component you can think about is actually training and mentoring new producers. Build a comprehensive training program. I get it, it takes time, but if you’re serious about growth you’re going to need it. If you have 10 producers today, and you’re looking to double in size in five years, at the end of five years you’re going to need the net 20 producers on your production team. That alone won’t do it; you need to build a strong mentorship program, and have it defined. We know that brokerages that have a mentorship structure have a lower rate of failure amongst new producers.

This can be a lot so, if you want to continue the conversation on how to solve your challenge of non-producing producers, reach out to me today. I’m looking forward to speaking with you.