Years ago I worked for Progressive Insurance as a marketing rep, and I will fill you in on a dirty little secret. We knew most agency owners and managers did not like us. We impacted their wallet in many negative ways. The owners had good reason for their disdain. Our commission was less than their other companies, we rarely paid bonuses, and we competed against them directly with cheaper rates than they could access. To combat this animosity, we practiced a little guerrilla marketing. We avoided most owners and managers like the plague. We went straight to the CSRs and account managers during our visits. For we knew a secret, CSRs did not care about revenue and maximizing contingencies. The CSRs were motivated by ease of use.
At the time, we were easy. In fact, Progressive still is incredibly easy to use. You really need no insurance experience to be able to rate and issue their policies in five minutes flat. Not only were we easy, but at the time we were the cheapest option on average. This gave us another advantage. Most CSRs were not sales people and had no sales training. When sales ability is low, then price becomes more and more important. Cheap rates made sales easy. So we were easy on two fronts, ease of use and low rates. As a result, CSRs loved us and used us more than their owners would ever know.
Eventually we would get cornered by an owner, two to three years into the relationship. They would ask to see production, and we would quiver just thinking about where this conversation might take us. Invariably, these owners were shocked. They assumed their staff was only using us sparingly for non-standard risks, and that they might only have 50,000 in written premium with us. Usually the truth was 5 to 10 times greater. It was not uncommon to see eyes bug out in shock at how much business they had with a low revenue carrier. Fortunately for us, there was rarely any change at the ground level as a result of these meetings.
Years later, I still find this to be true in many agencies. Owners allow the staff to control their revenue, their flow of business, and even company relationships. This is dangerous as the example above demonstrates. Because most staff has no financial incentive or understanding of agency revenue, they place business based on rates and ease of use. They could easily be undermining your decades old company relationship for the new kid on the block,Do You Recognize When Your Staff Has Staged a Coup d’etat In Your Business? because you never give any direction for how and where to place business. In the example above, had that written premium gone to carriers that paid 15 rather than 10 the agency would have generated an extra 25K which could have easily paid for more staff. Also some of that premium may have put the agency into new written tiers that would generate higher levels of contingencies.
Bottom Line: Be mindful of where and why your staff is placing business. If they need more sales training, find it. The extra revenue generated from smart business placement could easily pay the training costs.