Secrets for Sales Performance
Success in Insurance
Overview
As the pace of business accelerates, insurance companies continue the struggle to keep up with changes
in strategy, markets and products. The sales and distribution leadership is finding it extremely difficult
to prioritize and drive the desired sales behaviors using existing processes and platforms. To effectively
align the behaviors of your sales force and the various sales channels with your corporate vision, new
strategies need to be embodied in your incentive compensation plans.
From sales managers to field reps and sales operations everybody knows salary plays a vital role in
employee motivation. But is money the only reason to get up and go to work? How much should
people earn? How much is salary affecting employee turnover and retention?
Though insurance sales agents can usually expect only a modest salary, with average pay of just $35K
per year, most enjoy their work and report high job satisfaction, according to a PayScale salary survey.
We might think a higher pay produces better results, but there is scientific evidence to indicate that the
relationship between compensation, motivation and performance is much more complex.
The following secrets have been identified by Synygy over nearly 25 years of delivering
innovative technologies and expert know-how to help large sales organizations at global
insurance providers improve sales performance.
Copyright 2015 Synygy. All rights reserved.
WWW.SYNYGY.COM
The 3 most powerful words other than I love you are Salary is credited. This whitepaper aims to equip
insurance sales leaders with few tips to help them improve sales force motivation and performance
through an easy-to-remember SALARY structure.
Start by
Yearn for
bridging
the gap
Apply
effective
commission
schemes
mature
sales
processes
SALARY
Let the
ROI from
sales
technology
enablement
Allow
focus be
on agile
selling
distribution
modernization
START BY BRIDGING THE GAP
A lot has changed in the way management
would
design
and
administer
sales
compensation plans. The role of sales organizations is
evolving at a fast pace and the challenge lies in aligning
their incentive compensation plans to the companys
business goals. Every senior managements pain point
lies in effectively integrating the sales compensation
structure into their fiscal business planning process.
Ever wondered, what do producers expect from their
carriers? A sustainable, potentially high income goes
without saying, as do competitive products.
Copyright 2015 Synygy. All rights reserved.
But besides this, carriers are also expected to excel at
multiple support areas such as technology, assistance
with business development, back office and sales
support as these tend to create a competitive advantage
for their distributors.
Of course, compensation management is particularly
critical. Carriers must make payments accurately
and on time, and better manage often complex
compensation and incentive program structures. But
to harness the real power of these programs, insurers
also need to simplify the entire incentive compensation
process for their producers.
WWW.SYNYGY.COM
To complicate the challenge, each major distribution
channel requires a different approach. Independent
agents need to be enticed and motivated to sell your
product rather than your competitors. Your captive
agents wont need any such persuading, but rather
hiring the right people and retaining the best talent
can facilitate the ease of doing business.
And therefore, amidst the changing regulatory
environment, sales strategies, processes and roles,
if your commission plans are not aligned to business
goals and factors which drive the producers, the actions
of your sales force could be counter-productive.
APPLY EFFECTIVE
COMMISSION SCHEMES
A pay for performance growth plays a critical
role in any sales organization, and the understanding
of this culture can lead companies towards sales
success. Over $800 billion per year is spent on sales
compensation by U.S. companies alone, in the form of
commissions and bonuses, according to a 2012 Harvard
Business Review study. With the increase of sales
forces companies announced this year, we can expect
incentive compensation figures to reach an all-time
high. Almost 75% of SPM solution buyers believe that
incentive compensation management (ICM) is critical
to the success of any sales organization, according to
Synygy quarterly evaluations.
One of the glaring issues of the distribution management
function in insurance is sales force effectiveness and
its relationship with the highly regulated incentive
compensation practices in the industry. The three most
critical questions carriers need to ask themselves are:
1. What are the goals of pay for performance?
2. Who should be paid for performance?
3. What should be rewarded?
Pay for performance systems can be inclusive or
exclusive. Hence, the axiom that what gets measured,
Copyright 2015 Synygy. All rights reserved.
gets done has particular relevance when measures
are reinforced by monetary incentives. An essential
point to keep in mind is that pay for performance is a
powerful tool, which must be used wisely. Insurance
organizations must be very careful when deciding
what to measure and reward, because they are
quite likely to get what they measurewhich may
not always be what they really want. In other words,
agencies must be sure they are reinforcing desired
behaviors associated with the most critical outcomes
and not encouraging counter-productive responses.
LET THE FOCUS BE ON
AGILE SELLING
In this highly sensitive and globally
competitive world, insurance sales teams are facing
increased pressure because of various reasons
like falling premium, regulatory compliance, loss
of existing customers to competition, and shifting
loyalties of sales force. An agile selling approach will
help clear the air so that insurers can provide the
necessary changes in strategies and practices that
reflect in the financial increment of the company. By
understanding a new set of strategic building blocks
and how they can trigger innovation and anticipate
change, insurers will be able to explore amazing
organizational capabilities.
The current economic upheaval highlights the criticality
of agility, innovation and continuous transformation
for most businesses and insurance is no exception. The
most consistent and growing force exerting itself against
any business today is change. Are you keeping up with
this staggering pace of change? Doing more of the same
and expecting a different result is simply not working in
any industryespecially insurance.
Agile selling requires companies to operate at different
execution speeds and multiple levels of collaboration.
When done strategically, it can provide the flexibility,
accountability and responsiveness necessary to
capitalize on growth opportunities in response to
changing customer behaviors.
WWW.SYNYGY.COM
ALLOW DISTRIBUTION
MODERNIZATION
Many insurance companies are still skeptical
about modernizing their distribution because they have
gotten used to working with traditional systems for a
long time. Some dont even accept that the way insurance
products are distributed today has undergone a sea
change. The distribution model demands investments in
multiple channels, a strategic focus in their development,
and the ease of doing business provided to each of
the sales forces -agents, brokers and Bancassurance
partners.
Insurance agent/broker commissions are no longer
as simple as Excel-based compensation tables that
paid everything at a percentage of the premium.
The increasing complexities in multiple hierarchy
management, trailing agent commission management,
deferred commissions, draws, callbacks, production and
persistency bonuses, audit trails and policy history have
continued to push the operational costs for insurance
sales organizations. The same complexity applies to
many agent life cycle management processes such as
on-boarding, licensing and appointments management,
compliance and reporting using analytics.
Insurance agents want transactions to happen fast and
easy, and customers want the same thing, a Novarica
survey concludes. Insurance providers have indeed a
lucrative opportunity to capitalize on revenue growth
and achieve operational efficiency by investing in leaner
processes delivered with distribution modernization.
ROI FROM SALES
TECHNOLOGY ENABLEMENT
By 2020, 85 percent of customer relationships
will be managed without customers and companies
ever meeting in person, according to Gartner research.
While manual spreadsheets work well for smaller
organizations, they are inherently labour-intensive,
error-prone, and hard to scale for more complex
companies. An increasing number of insurance
sales leaders are investing in agile sales enablement
technologies to be able to respond to the fast growth
rate of organizational change.
Copyright 2015 Synygy. All rights reserved.
Sales heads have been noted to rely on several
mobile applications, solution selling tools, systems
with predictive analytics capability, and several other
distribution modernization technologies that replaced
legacy systems, helping them move away from traditional
ways of doing business.
Increasing sales productivity, sales force effectiveness
and continuously improving sales performance
management have always been on the priority list of top
sales professionals. However, only 27% of companies
have dedicated sales effectiveness staff, according to a
Marketeer report in 2014. On the positive side, Gartners
January 2015 report says the SPM software market will
be $1 billion in 3 years. And the SPM services business is
at least two to three times the software business.
YEARN FOR MATURE
SALES PROCESSES
In response to the complexities in distribution,
the insurance leadership is constantly looking for ways
to align their sales support and back office function with
the central goal - another way of demonstrating the ease
of doing business.
To be able to grab every revenue growth opportunity, a
company needs flexibility to configure a new product. To
establish a relationship with a new insurance distributor,
insurers need to be creative in devising the right
compensation plan. Encouraging agents to promote an
underperforming product demands having a targeted
incentive plan, flexibility and speed.
Hence, it becomes critical to choose standardization
and apply it consistently across the distribution
channels to drive desired sales behaviors. Regularly
inspecting processes to find the gaps, measuring
the process efficiency, benchmarking best practices,
and making continuous improvement can also help
strengthen the overall functioning of an insurance sales
organization and contribute towards sales success.
WWW.SYNYGY.COM
Conclusion
The above 6 secret SALARY figures reflect insurance industry best practices and can buy sales and
distribution organizations the treasure of improved sales PERFORMANCE. With the help of these secrets
insurers are able to:
Proactively monitor commission plans for misalignment
Enforce a clear understanding of strategy company-wide
Remunerate and reward top achievers
Formulate standards and benchmark sales processes
Observe new opportunities for continuous improvement
Revisit strategy to adapt to any change
Modify compensation plans to align to those changes
PERFORMANCE
Anticipate and embrace change ahead of competition
Nurture sales talent and improve retention
Communicate and collaborate across all sales channels
Establish clearly defined sales quotas/targets/objectives
Copyright 2015 Synygy. All rights reserved.
WWW.SYNYGY.COM
LEVERAGING CHANGE TO IMPROVE OUTCOMES
As the pace of change accelerates many organizations are finding it increasingly challenging to
drive sales performance effectively through in-house people, processes, or technology. If you are
struggling to keep up with changes in strategy, markets, or priorities and drive sales performance,
we invite you to contact us for further discussion on methods for implementing these tips in your
organization and examples of how Synygys agile sales performance has improved the outcomes
of hundreds of the worlds largest organizations.
ABOUT SYNYGY
TM
Synygy provides Sales Performance Management as a Service . This enables sales organizations to
rapidly adapt to changes in strategy, markets, and priorities. We do this by combining business process
outsourcing and cloud technology, which makes change a simple and routine part of sales incentive
compensation management, sales operations management, and sales performance management.
PRODUCING BETTER BUSINESS OUTCOMES
Based on client evaluations spanning more than two decades Sales Performance
Management as a Service (SPMaaS) clients report better business outcomes
compared to SPM Software clients in all ten measured categories.
greatest impact:
ABILITY TO ADAPT
TO CHANGE
15
% Better
Process
Reliability
13
Cost Savings
Visit our website for more research, expert tips and
trends on sales performance.
Or contact us directly to speak with one of our Consultants.
[email protected]+1 610.494.3300 x7900
Follow us on Social Media
Copyright 2015 Synygy. All rights reserved.
Share!
WWW.SYNYGY.COM
