Should you hire a producer without an insurance agency leads program?Article added by Alan Blume on July 24, 2014
Alan Blume

Alan Blume

Sutton, MA

Joined: February 10, 2014

The title of this article poses a question that many insurance agency owners, executives and producers ponder: Should agencies hire a producer without first implementing an insurance agency marketing and lead generation program? After all, whose job is it to fill the top of the funnel? And has the answer evolved over time, requiring a different response today than it did 10 or 20 years ago?

Some insurance agency owners think that insurance agency leads should be generated by producers. They expect them to pick up the phone and cold call their way to a robust pipeline, join networking groups, stop by businesses, drop off brochures (canvassing) and send out information via the U.S. Postal Service. This may have been an adequate strategy 20 years ago, though it did result in a high producer failure rate. But today, there are better tools, technologies and methodologies available to help ensure the success of new agents, many of which can and should be used by the producers themselves.

The pipeline challenge occurs with many types of businesses; it's not specific to insurance agencies. Many smaller organizations are reticent to add marketing dollars to their current sales spend, and expect, or at least hope, that their new salespeople will cold call their way to success and build their own pipeline. Unfortunately, this is an empirical path to failure, as most new producers are often unprepared to tackle their own lead generation, lacking the experience, tools and organization to accomplish the necessary tasks.

The changing world of lead generation further complicates the challenge, as it migrates away from cold calling and face-to-face networking toward a more digital venue. Insurance Web marketing, social media marketing, insurance agency email marketing, blogging, insurance search engine optimization and Web seminar marketing are all more efficient tools than traditional cold calling, snail mail and canvassing.
Insufficient qualified prospects at the top of the sales funnel invariably leads to inadequate results at the bottom of the funnel. Why don't insurance agencies or other B2B companies invest more in marketing? I think there are a few reasons.
  • Some agency executives, especially those who started 20 or 30 years ago, don't believe in marketing. Many still look at cold calling and personal networking as a pipeline panacea.

  • If an agency is paying a producer a base salary of $50,000 (plus benefits), they don't want to spend additional dollars for marketing — they think it just adds to the cash burn and risk.

  • Many insurance agency marketing plans and dollars simply focus on local events and traditional seminars. Web marketing is still an unknown frontier.

  • Many agencies lack a formal marketing department and are uncertain how to create a successful insurance agency lead generation program.
There are a plethora of other reasons, but the net results are the same: Producers who don't have quality leads flowing into the top of the funnel won't have sufficient sales flowing from the bottom.

Perhaps the best advice for insurance agencies when it comes to hiring new producers is as follows. If an agency intends to hire three new agency producers, but does not plan on investing in a marketing and insurance lead generation program, they should consider investing in only two new producers and using the savings for a marketing support and insurance leads program specifically targeted for those producers. If an agency intends to hire only one producer, and cash flow is an issue, they can create a cost sharing program with the new producer to ensure funds are available for lead generation. Increasing the success of new hires is a certain path toward a more successful and profitable insurance agency.

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