Page 201 - The UnCaptive Agent

174 THE UNCAPTIVE AGENT

you’ll have adequate warning before you hit those key
benchmarks. The average small agency CSR manages
a book of business of roughly $140,000 of commission
income. You can’t possibly manage a book that large
yourself and continue to produce. Using my numbers
as tipping points will prevent you from coming to a
grinding halt in service.
The tipping point for hiring a salesperson can be
measured in a number of ways. I’ve said earlier that
when you are no longer able to make new business sales
yourself, and you’ve outsourced all the things in your
agency other than selling, you need to hire a salesperson.
But a number to watch would be the commission level
in your agency. My suggestion is that between $150,000
of commission income and $200,000 of commission
income in a personal lines agency and perhaps $250,000
to $350,000 in a commercial agency, you should consider
hiring another producer.
One key metric to make note of in this regard, is the
revenue per person in the agency. In rapidly growing,
small agencies, $100,000 revenue per person is a key
indicator that it’s time to add someone else. Since you’re
already there in an administrative and sales capacity
and you’ve now hired a client service person, crossing
the $200,000 revenue mark means that you can begin
to think about your third employee, and that person
can be a producer.
The third tipping point to success in building your
agency is clients. The number here to think about is
not the number of clients that you have in your agency,
but the number of policies you’re selling to your aver-
age client and the average revenue you have per client.
The typical independent insurance agency sells 1.6
personal lines policies on average. The typical direct
writing or exclusive agent sells far more because they’re