A Fast Start for the Freshman

A Fast Start for the Freshmen

In 1992, we were looking for a way to reward brand-new agents for their activity, as opposed to results, so they would feel good about their efforts even if they weren’t posting big commission results yet. That’s when we came up with the President’s Early Achievement Award.

Not only has this program had a significantly positive effect on our ability to launch new agents into the career quickly and successfully; it also has helped increase our retention rate.

During our new agents’ first six months in the business, we ask them to submit 40 life, annuity or disability applications—not paid for, not issued, but just to submit them with cash. Underwriting doesn’t have to be completed. We also count an equity sale if the ticket is $40,000 or more. This is drummed into them as an expectation from the beginning.

The qualifications for our company clubs and for MDRT don’t allow pro rata submissions, so the new producers can’t look forward to achieving those milestones until they’ve been here a while. For a new agent starting out from Day 1 in the business, it will be a month and a half or two months before they get to a closing interview, before you see their first app. So this gives them a good, solid goal that they can work toward right away.

We have weekly pep sessions with the new agents. We ask them, “How are you going to identify those 40 apps? Where will you get them?” We make a big deal out of it. We explain to them that when they win the President’s Early Achievement Award, the senior agents will start to take notice of them and know they’re for real and that good things come from those relationships with senior agents, such as potential successor programs.

Our belief is that the new agents should be rewarded for the apps they get. Even if they’re small apps, the agents have to do the activity to get them, even though they may not have big numbers hitting their commission statement.

We have 127 reps in six locations spread out across four states. At our all-agency meetings, the new agents who have turned in their 40 apps are brought up on stage and presented with a $500 check good at the company store to spend on anything marketing-related and a plaque that goes on their wall. They also get to move out of their cubicle into a private office.

We’ve tracked this over the years. About 53 percent of the people we brought into the business have succeeded in reaching the President’s Early Achievement Award. Our agency’s four-year retention rate—except for a dip a few years ago, but prior to and after that—has been between 35 and 45 percent. We’ve also noticed that almost every agent we retain has achieved this goal.

There’s no magic to the 40 apps. It could be 35 or 50. The idea is to give the new agents an incentive to produce until it bridges them into the other clubs. A lot of our new people come in mid-year, so instead of waiting six to eight months to get in the game, this allows them to get started right away. It gives them a successful launch and puts their focus on activity, not commissions.

I can’t emphasize how much we supervise them and get them to focus on this goal from the beginning. We discuss it in every interview. And when they’re signing the contract, we give them a list of expectations. Achieving this goal is the first thing on the list. The second item on the list is achieving Principal’s Premier Club. The third is to hire a support person. And the fourth expectation is to make our second-level club, the Honor Council, which is about equivalent to MDRT’s Court of the Table.

The first 90 days, the new agents have daily activity monitoring. We use the One Card System. If they get through the first 30 days, then they’re on weekly supervision. Every time they meet with their manager, their progress toward the President’s Early Achievement Award is discussed, front and center.

Everyone in the organization talks about it. The senior agents will ask the new people, “How are you doing on your P.E.A.?” The senior agents understand how important it is for the entire organization. I tell them, “It’s good for you; it’s good for us, and so help us make this a part of why they’re here.”

One year, one of our senior agents nominated a new recruit and began informally mentoring him. The young agent was working “lights out” to get his 40 apps, but as his first six months were about to end, he had a fair ways to go. The senior agent stepped in and gave him a boost. He went out on a couple of calls with him, encouraged him and spent time going through cases with him. On the last hour of the last day, the kid brought in his last three apps, and he made it.

This experience developed such a bond between those two that, six years later, the young producer became the successor agent and bought out the senior agent’s practice when he retired.

This program takes a total commitment by the management team. It took three years for it to really take hold. You have to encourage the first guy to do it, and make a big deal out of it. Then you have someone to point to. We learned that the secret was not to go to the senior agents because they won’t change the way they do things. Like any culture change, it all begins with what you tell the new people. If you tell them this is the deal, then they understand that from the beginning.

I’m convinced that this program works because its part of the culture of the organization, and it’s recognized when the new producers go to agency meetings. They see other guys getting the recognition, the checks and the handshakes, and it spurs them on.

Lawrence E. (Larry) Reelitz
Regional Managing Director
The Principal Financial Group
Des Moines, IA
Richaard Wong RFP, ChLP, FChFP Best Practices, Training & Development
33/F, AIG Tower, 1 Connaught Road Central Hong Kong Tel: +852 2832 6762 Fax: + 852 2572 1792 Richaard-kl.wong@aig.com

“Leadership by the Compass not the Clock” – Dr Covey

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