Agent incentives can be effective in producing revenue growth.
Account managers and producers know that crossselling is an effective way to increase revenue, account retention and agency profit. Yet, many spend insufficient time actually cross-selling. With so much attention focused on responding to client inquiries or processing renewals – tasks which must be handled promptly – cross-sell activities are often not as time-sensitive and don't command the same sense of urgency.
For agency owners, bringing cross-selling to the forefront begins with recognizing specific types of activities that typically receive top-of-mind treatment by agency employees. These include activities that are financially rewarded, those that receive recognition and those that are measured. By aligning an agency's compensation, recognition and measurement practices to encourage cross-selling, owners can bring increased focus across the organization to these revenue generating opportunities.
For example, to motivate licensed account managers to cross-sell within their departments, consider offering an incentive for each additional sale made. This incentive may be based on a small percentage of the first-year commission or a fixed-dollar amount per new policy sold. Also, to encourage referrals from the commercial lines team to employee benefits, or vice versa, consider including referrals in annual performance plans and tracking interdepartmental referrals that have led to closed sales. In many agencies, producers who handle business clients are licensed to sell both property/casualty and life and health insurance, but specialize in either one or the other. To encourage producers to make interdepartmental referrals, consider a negotiated approach to commission splits. This acknowledges that successful interdepartmental cross-sales don't necessarily require equal effort from both producers. It is designed to compensate each producer based on their relative contributions to the sale and renewal.
In a negotiated arrangement, producers determine their respective level of involvement in pre- and post-sale activities. They then agree on each producer's share of the new and renewal commission splits for the targeted account they are attempting to write.
Recognition can be a powerful motivator for both producers and licensed support staff. Recognizing a particular team's success in referring leads from one department to another helps reinforce the value of an interdepartmental cross-sell effort. It's also important to give visible praise for cross-sell successes within each department. Consider granting "fun" awards and giving out special thanks. Encourage those who have been successful to share how they have overcome specific obstacles. Make a point of reporting team progress on both the number and percentage of accounts that have been cross-sold additional products. Celebrate early wins to keep cross-selling top of mind.
Cross-selling presents a tremendous opportunity to increase revenue, retention and profit. Aligning an agency's compensation, recognition and measurement practices can go a long way in building and maintaining cross-sell momentum throughout the organization.
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