Initially an agent value is worth nothing. Likewise, an agent sending in a lead to get more product information holds no value. Even if an agent signs a contract with you to sell a product, they hold no value. Thousands and thousands of insurance product marketers hold the misconception of what they current have acquired contains what they need to succeed. This is why each year thousands of all types of insurance product distributors and recruiters fail in their efforts. Here is illustrated how, when, and how much worth an agent potentially can be to you.
Although they can start the way to the desired result of making money, your list, leads, and contracts, hold no actual value. For insurance marketers thinking otherwise, this is false hope that leads to their quick demise. For example, an agent or broker that is recruited and convinced into signing a contract, yet never writes business has useless agent value. Your marketing plan must be exclusively devoted to the sole intention of finding agents willing to start selling your product immediately.
Take the cost of recruiting, and your return on investment before your recruiting plan gets down to the nitty gritty details. In other words how much is it going to take of your investment just to break even. You are using terrible practices if it costs you $1,500 in time and money to get an agent to write $1,000 in first year override commissions. In turn, you must be a marketing pro if every time you invest $3,000 of your time and funds, returned back are $15,000 or more in just first year overrides on new agents. Actually, being marketing professional is your requirement, and making changes, adapting, and learning new tips and tricks should hold major importance.
From the feedback received by hundreds of insurance marketers is determined what the actual value of an agent or broker is to any form of insurance marketers. Each year, as both brokers and marketing firms become a little wiser, more educated, and experienced in their survival skills, the figure rises. Value cannot be determined by strictly by how much in overrides a broker provides you with in premiums written during the first 12 months. Instead, you must project this figure to an even amount over 36 months, 3 years. The typical product marketer receives at least 20% in overrides on the products his brokers write. This figure of course will vary widely from marketer to marketer and the type of insurance related product that is sold.
$3,600.00 is the current value. That means that if you recruit 30 new brokers this year that write average production for your company, you just made $108,000. Remember however not all brokers contracted will write business, and some of your 1st year and longer producers will be swayed to your competitors. Measure the results of every one of your recruiting campaigns on producers writing business and nothing else!
That figure is excessively low. Good, if you think $3,600 is too low, it means your techniques in marketing may be beyond what average people in your field are doing. When a marketer is heard saying no way is I going to pay $2,500 for a recruiting direct mail campaign, it is often the sign of an inexperienced or cheap marketer. Spending $2,600 on a 5,000 broker mailing, should return a minimum of five writing agents. A cheap marketer may spend $2,600 or more worth of his time obtaining one writing agent by personally making phone call after phone call. Marketers willing to try recruiting with virtually zero investment often end up, after time and money expenses, with zero.
Some Tips
The cost of you personally trying to acquire agents with telephone prospecting, is one of the highest methods. Sure, there is no postage or printing costs to spend money on, but your time should be valued at higher than minimum wage. Mailing to agents and brokers is considered a business-to-business mailing, not a consumer mailing. Many consumer mailing return up to a 2 percent return rate. Business mailings to insurance agents commonly hover at about .8 percent, and often lower on annuity products. Remember mailing a semi-qualified broker is almost the same cost as mailing agents at random. Base your results on the return on your investment, the ROI.