Page 152 - The UnCaptive Agent

THREE ESSENTIAL FUNCTIONSOF YOUR AGENCY AND HOW TO STAFF THEM 125

tasks (including sales management). In my experience—
and I have analyzed this with dozens and dozens of
agency principals—this is the wrong strategy.
I had a friend many years ago who was running
a two-million-dollar agency. He had nineteen other
employees in the agency but was the only producer.
This is the ideal situation. It’s difficult to replicate, but
it’s an ideal you can strive for.
With my friend’s example in mind, when should you
hire your first producer? My answer is simple: when
you have replaced all of the non-sales activities that
you perform personally, and you have run out of time
personally to sell any more business, that is the time to
hire another producer!

When to Consider a Producer

In the independent agency system, the failure rate for
producers runs about ninety percent, and it usually
takes about three years for new producers to pay for
themselves. This is additional evidence that you should
delay hiring producers for as long as possible.
When it finally does come time to hire a producer,
bear in mind that the agency must own the book of
business. A number of years ago, I met an agency
owner who was interested in doing business with my
organization. He told me that he would check with
his producers and let me know whether they wanted
to proceed or not. I asked him, “Why do you need to
check with your employees?” He replied, “Because they
own their own books of business.” I looked at him and
with great sadness asked, “Do you realize that all you
own is a bunch of used furniture of little or no value?”
Stunned, he told me he had never thought about it
that way. The last time I heard anything about him,