Helping the country’s top commercial risk management and insurance brokers to recruit and develop the next generation of producers (sales people), we often get asked about the key ingredients for a successful new producer. Client hiring managers want to know, for sure, but so do candidates, business-to-business (B2B) sales reps considering the career transition to becoming commercial insurance brokers.
We’ve learned that you need to find an individual with a strong probability to be successful in the commercial insurance broker role, in the specific agency/brokerage firm and in the industry. Our assessments evaluate an individual’s success potential using 8 Key Success Criteria: (1) sales skills; (2) drive to achieve; (3) relationships skills; (4) cognitive abilities; (5) work ethic; (6) verbal skills; (7) career desires (fit), and (8) compensation fit. The detailed definitions for these 8 Key Success Criteria are contained in our prior post “New Producer Hiring: The Answer Key”
This post discusses compensation fit – or money fit – which we define as a new producer candidate who “understands and can accept the client’s compensation program; accepts that the career will be commission based after validation; big-money motivated.”
Frankly, if becoming a producer doesn’t represent the right career move for a person, the money fit doesn’t matter at all. But assuming the career fit is right and the candidate meets most of the other 6 Key Success Criteria, the money fit becomes THE most important issue to get right.
Fortunately, most sales people don’t pursue a sales career for a salary. Quite the opposite. They usually seek a linear connection between hard work, results and rewards. Top sales people are always in it for the commissions, not the salary. So, if a new producer candidate is overly focused on the starting salary, that’s an early litmus test that becoming a commercial insurance producer isn’t the right choice for them. You want a person who accepts that — and ideally is charged up about — validating a starting salary and getting to a commission-basis as soon as possible (~3 years or less). The right candidate understands that the producer career is not about feeding at the trough on guaranteed starting salary but rather to get on a full commission-basis where the big-time six-figure money can be earned through residuals on a big book of business.
We recommend that you find schizophrenic new producer candidates – at least regarding the money! You need them to accept modest pay in the early years but also to crave big-time 6-figure money long-term. Otherwise, lacking the big-money motivation, we often find that they lack the drive to achieve and work ethic (2 other Key Success Criteria) for the heavy lift to get through those lean clientele-building years. You certainly want to ask a candidate about their current compensation, their earnings history, and the most money that they’ve ever made in a single year in their career. You want to determine how much of their compensation has been earned on a commission versus a salary basis. The candidate’s money history often reveals their future income trajectory.
Here’s a key question to ask a candidate: “what does ‘make a substantial income’ mean to you?” Listen carefully to the answer!
Watch for these four candidate red flags for money fit: a lack of long-term big money motivation; over-focus on starting pay; discomfort with eventually transitioning to a commission-only basis; and a weak income history in past sales jobs.
New producers need to understand that this is a commission-based, residual-driven career. The idea is they need to validate to get to the Promised Land in this career and that the early years are not where the big money is, but that the sacrifice and hard work pays off in the long-term with uncapped, big-time six figure incomes.