Principals Can Use New Tool to Manage Producers

Agency principals and managers have a new tool available to assist in the process of hiring and managing producers. The product is entitled “Hiring and Managing Inexperienced ProducersTM,” written and produced by Alan Shulman, publisher of the Agency Ideas sales & marketing newsletter.

It includes a 42-page book in addition to two separate software programs available on CD-ROM and is aimed exclusively at helping agency principals to hire new producers.

Shulman brings 17 years of agency experience to the project, using his own personal knowledge of hiring and managing inexperienced producers to develop the product.

“It’s geared for agency principals and managers that are getting involved with new producers,” he said. “I think right now, it’s a hard market, there’s a lot of activity in the young producer market. Agencies that are interested in growing want to bring along inexperienced producers because the veteran producers are often preoccupied trying to retain their existing accounts. This product ties right into that.

“This product is a growth of [my] experiences,” said Shulman. “The software really evolved from all the Lotus spreadsheets that I developed for my own use.” The book is an update of a previous version Shulman wrote years before, presenting its ideas at seminars around the country.

The product includes two software programs. The first, Product P&LTM is designed to help agencies conduct pre-hire projections in order to determine the best method of compensation for both the agency and the producer. “Before you even hire anybody, you’re going to run the numbers,” said Shulman. “You want to project what the agent can do over a number of years.”

Shulman advises users to adjust the software to reflect what he calls “reality” factors. These include cash flow percentage, rejection factor and retention factor. “You don’t receive a hundred percent of the commissions in the same year that you make the sale,” he said. “For example, if you made a sale on June 30, you’d only get six months of commission showing up in the year of the sale. The rest of it would be deferred over to the second year. You would have to take that into account, year at the same time you’re paying the agent straight up.”

The rejection factor takes into account business lost. “Some of the business isn’t going to stay on the books because of collection issues, poor underwriting, cancellation by the company or cancellation by the agency,” Shulman added. “You’re going to have to tie all those reality factors in to adjust the revenue.”

Agency principals are able to compare compensation methods—straight commission, straight salary, draw versus commission or salary & commission—and then decide what the best form of compensation is for that particular producer.

“It lets you run the numbers realistically and simply,” said Shulman. “You’re going to be able to do an individual profit and loss for each producer based on realistic income and compensation formulas. You’re going to be able to run what-if’s relatively quickly. You’re going to find out how much production you’re going to need over a multi-year span to reach the profitably that you want.”

Producer P&LTM lets the principal and the producer view detailed graphs and reports, including a summary of sales expectations over a period of up to five years.

The Set & TrackTM software converts the numbers projected from the Producer P&LTM software into a realistic sales plan that lays out goals for the producer. “What you’re going to do is take that number, desirable production based on the desirable bottom line, and then move that over into Set & TrackTM, and then you are going to convert those into actual goals,” said Shulman. “You run the numbers, you find exactly where you want to be, and then you convert it backwards into the goals that you set for the producer.”

The Set & TrackTM software generates printable reports and graphs exhibiting the progress of the producer’s goals and results, helping the producer to stay on track. One of its unique features is the ability to compare actual goals versus results side-by-side. It also allows the principal and the producer to establish the desired activity for each quarter per year for up to three years.

The software is accompanied by a 42-page guidebook that can be viewed on Adobe PDF Reader. “[It is] basically a collection of my experiences and ideas from hiring and managing inexperienced agents,” said Shulman. “The book is going to tell producers how to use the software along the way.” It includes role-playing exercises and surveys for the agent to keep them on track with their goals.

The product also comes with ready-to-use templates such as Sales Call Planner, Producers No-Sale Survey and Agency Marketing Intern Program that can be viewed using Microsoft Publisher version 98 or later.