Why Do New Producers Fail?
By Ken Fields, CIC, CPCU, CLU, ChFC, MSM
My partner and I have coached over 1,300 new producers, each one for at least a full year. They were
required to provide a weekly detailed accounting of all prospecting and sales activities, and to
participate in a 30 minute phone appointment every week. Sales activity was documented from the
initial contact with a new prospect until the account was written, or not. Possibly, no one has worked
more closely, for so long, with so many new producers. It has been an incredible learning experience for
me.
We have watched young men and women, some barely out of college, develop into successful
producers with every reason to believe they have a lucrative career ahead of them. Others have not
fared as well. Industry surveys suggest as many as two thirds of all new producers don’t survive through
their second year in the business. While our experience has been much better than that, a significant
number of our new producers still don’t make the grade. This article focuses on our experience with
those producers who did not remain in the business for even a single year.
#1 – They were a not a good “fit” for the business. Given the dismal turnover rate of new producers, it’s
obvious that the sales side of the insurance business is not for everyone. Fortunately, there are test
instruments that can help us better predict an individual’s potential for success. We prefer two tests in
particular. The first, Managing For Success, uses the DISC (Dominance, Influence, Steadiness,
Conscientiousness) personal assessment tool to determine how the individual is likely to behave in a
sales environment. It compares their “natural style” or way of doing things, with their “adapted style” or
how they would have to alter their natural behavior to work within a sales environment. Too much
“adapting” means they have to function very differently than they would normally. This creates stress,
and lowers the possibility of success.
The other test we like, the PIAV (Personal Interests, Attitudes and Values) assessment, tells us what
motivates the individual. We look for candidates who are money motivated, competitive, and have a
thirst for knowledge. It is absolutely uncanny how predictive these tests are. We usually regret it when
we overrule the test results.
#2 – They couldn’t manage their time. The personal freedom associated with outside sales is very
attractive to many potential producers. That same personal freedom is also the number one reason new
producers fail. It shouldn’t be surprising that new producers struggle with managing their time. After all,
when we are children, mom and dad tell us what to do; when we start school, the teacher tells us what
to do; when we play sports, the coach tells us what to do; when we get a job; the boss tells us what to
do; but when that new producer starts working in an insurance agency, typically, no one tells him or her
what to do. Establishing solid time management skills needs to be Job One for new producers. They
©2013 Insurance & Risk Management Knowledge Alliance
need close, preferably daily, supervision and a very structured environment at first, to help them
develop these skills. The “sink or swim” approach to training new producers is one of the reasons so
many of them fail.
#3 – They didn’t put enough time into the business. We’re all familiar with the “Work smarter, not
harder,” adage. New producers need to work smarter and harder. No one builds any successful business
working 40 hour weeks; and the insurance business is no exception. All new producers should
understand that the first year will require their total immersion into the business. This means no
vacations, no extra days off around holidays, no leaving early on Fridays, and they need to leave their 9
to 5 mentality with the last job. Where else but the insurance industry can an inexperienced person,
with no advanced education, and no business loans, build their own business and in just a few years be
earning an income equivalent to corporate executives – all while being paid? What they must bring to
the business is their time, lots of it, their energy, and their creativity. There will be sacrifices in the front
end but the rewards are huge. Top athletes devote thousands of hours to refining their skills. Becoming
a top producer requires the same focus and determination.
#4 – They were office “potatoes”. What’s an office potato? It’s the same as a couch potato, but found
in an insurance agency snuggled into a comfy ergonomically designed desk chair. It’s not enough for a
new producer to just put time into the business. The time has to be invested in the right activities.
Nearly all those activities require the new producer to be out of the office. Office potatoes have lots of
great reasons to stay in their chair: they’re working on a proposal, they have to call an underwriter, it’s
too hot or too cold, it’s raining or snowing, it’s Friday or a holiday week, and none of their prospects will
be available anyhow. New producers would probably be better off without an office. The more
comfortable the surroundings, the more likely they are to hang around. One agency I know of provides a
small work space for making phone calls and completing applications, and a conference room for
meeting with clients; no traditional office. New producers should be out of the office calling on
prospects and centers of influence all day, every day, during business hours. Administrative work should
be done before or after office hours whenever possible. If it’s necessary to meet with someone in the
office, it should be done by appointment, the same as meeting with a client. This way, staff members
will be expecting the producer and can be prepared for the discussion, which saves time for both. The
same approach can work with underwriters, if phone appointments are made in advance via e-mail.
#5 – They became quoting machines. A recent study reported that 31% of successful salespeople and
over 50% of average to poor salespeople had difficulty assessing the quality of leads. Newer producers
especially struggle with determining when to pursue an account and when to walk away. Agency owners
who evaluate producer performance by the number of quotes generated each month, in my experience,
are making a serious mistake. This encourages producers to chase accounts that aren’t going to close no
matter how much they can arm twist their underwriters to shave more off the quote. The resulting poor
closing ratio wastes time on the part of the producer, agency staff, and company underwriters. Top
producers, on the other hand, are much more discriminating about which accounts they pursue. They
©2013 Insurance & Risk Management Knowledge Alliance
use tools like the SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis to look for a good
match between the companies represented in the agency and the prospects available in their marketing
territory, and the DAQ (Diagnostic Appointment Questionnaire) to determine which prospects they want
to pursue. In addition, they establish the rules of the game with prospects so there’s no question about
getting loss runs and financial statements, or meeting with the decision makers when it’s time to
present the proposal. Their high closing ratios mean less time wasted and better relationships with
agency staff and company underwriters.
In Conclusion -- Recruiting and training new producers is difficult, time-consuming, and expensive, but
the right new producer who is given the appropriate training and supervision during that critical first
year can ignite sales and become a catalyst for agency growth.
Kenneth L. Fields, CIC, CPCU, CLU, ChFC, MSM
Ken is an Assistant Vice President with The State Auto Insurance Companies. Co-developer of the
nationally recognized PaceSetter new producer sales development program, Ken has been personal
coach to over 1,300 new property-casualty producers. He is also on the national faculty for the National
Alliance. For information on The National Alliance for Insurance Education & Research and their
Dynamics of Selling program and Producer School, call 800-633-2165 or go to:
www.TheNationalAlliance.com
©2013 Insurance & Risk Management Knowledge Alliance