When determining the most effective ways to incentivize insurance agents and producers, it makes sense to review commission plans. You may find yourself asking: what actually motivates people to sell insurance policies? Since we’ve worked with insurance agencies of all sizes, we can help you take a look at a few common methods.
The right insurance commission plan for your agency entirely depends on its unique goals and challenges. For all methods, it’s often wise to keep the plan simple and understandable. Be sure that you can explain it to every one of your existing employees as well as new and prospective agents and producers.
Rewarding insurance agents and producers for hard work will keep them motivated.
Here are a few methods insurance agencies often use to effectively keep agents and producers motivated.
Baseline Insurance Commissions
Of course, most agencies start with a baseline of attaching commission rates to each insurance policy. Rates may differ depending on the type of policy and whether it’s new business or renewal. However, the idea remains the same: agents and producers earn commissions with every sale they make.
Agencies occasionally choose to pair commissions with a salary as well to ensure that agents continue to earn even during slow periods. But however you choose to structure insurance commissions, it’s best to have a detailed explanation. Create resources that agents and producers can reference when they need to understand rates. And have a solid rundown or explanation prepared whenever there are questions.
Accelerators and Decelerators
In the case of an agency looking to drive success, accelerators and decelerators can be effective. These devices encourage agents to meet certain benchmarks within a specified time period. For instance, if an agent exceeds a quota by 15 percent within a single quarter, they unlock an accelerator. That accelerator increases their commission rate by 10 percent. On the flip side, if an agent fails to meet a certain portion of their quota, they’re hit with a decelerator. As an example, if an agent’s sales fall below 65 percent of their quota during a quarter, their rate drops by 10 percent.
If you’re considering implementing accelerators and decelerators in your commission plan, it’s important to know your team. This method works really well for high performers. However, it can be frustrating for agents who may have to balance sales with other tasks, like prospecting.
Incentivize Non-Sales Activities
Agents and producers often have to spend time on administrative tasks that are necessary but not always tied to sales. For instance, some agents need to develop their own leads or manage customer relationships. In those cases, an incentive tied to those activities may be effective. Perhaps agents can earn for the number of calls they place in a single day. They may also be eligible for bonuses based on customer success and feedback.
For this method, it’s important to review what your team accomplishes on a daily basis outside of policy sales. Use that information to determine what activities may deserve an incentive. From there, build out an incentive program that makes sense and keeps your team moving forward.
Whatever incentives and bonuses your agency chooses to implement, we can help you automate the process. Message us for more information or set up a free demo and we’ll show you. We can’t wait to help you motivate your team to sell more insurance policies.