Making the Most of Incentives for Insurance Brokers

The key is to align incentives with goals and ensure your rewards in turn align with your company culture and staff preferences. (Fotolia)

Studies have shown that our brain prefers to take the easy route. We are naturally designed to save ourselves effort. And we’re also naturally wired to do things that make us feel good in the short term versus the long term. This is why so many of us spend too much time on social media or video games: they are designed to tap into our need for instant gratification, which can turn minutes into hours!

What is the connection with the incentives offered to insurance brokers? This means that while every broker wants to make sure their clients’ needs are met, some products take more time and effort to explain than others. Insurance brokers also have a choice of which companies or policies they recommend.

How can you, as an insurance company, help motivate brokers to focus on certain policies? This is where incentives come into play.

The versatile role of incentives

Incentives can help break our natural preference for convenience, which can translate into a focus on familiar and simple policies, tapping into the desire for immediate gratification. Incentives are powerful tools for changing behavior. Think about how many times you couldn’t pass up a cookie to see a lower number on the scale at the end of the week. The cookie will taste good right now, as that weigh-in is a few days away. Who can wait?

Aligning incentives with your strategy and long-term goals is like giving yourself short-term rewards while trying to accomplish something big. It could reward you with a monthly mini shopping spree if you hit your daily workout goals. As you get in better shape, you will appreciate clothes that fit you better. The short term reinforces the long term.

Broker Advantages

Let’s take technology as an example. You need your broker network to adopt a new customer relationship management (CRM) platform, which can be a pain! One way to ease the stress could be to offer incentives each time your employees or brokers complete a training course. It’s a win/win/win. The team gets additional training, the organization gets better customer follow-up, and the customer gets better communications. All while providing a little short-term motivation.

Compliance is another “pain point,” similar to technology training. It has to be done and it improves the organization. But it’s not always pleasant. Yes, you might have to make it mandatory, but that doesn’t mean you can’t make it motivating by offering incentives as well.

Sales are the reverse. It’s something that agents want to do; in fact, they like to do it. But again, some products take more effort to sell than others, especially new products. First there is the learning curve for the agent, and then they have to explain it clearly and convincingly to potential customers. And back-end processing can also present a barrier to learning. Incentives can make it easier to sell new or complicated products by providing tangible short-term motivation to achieve a long-term goal.

Organizational benefits

Incentives don’t just benefit an individual agent’s sales process. They can help attract and retain a talented workforce. Many people who work in sales are driven by meeting and exceeding goals. Incentives show them that they are appreciated, while showing that their ultimate goal is within reach by dividing large quarterly or annual sales goals into weekly gains.

Back to the training part. The better and more skilled your team is, the more attractive the environment is for new talent. Since most people don’t like training (especially on technology or compliance), motivating them to acquire this learning will put everyone at a higher skill level, which in turn will attract people more talented.

Insured benefits

Last but first is the policyholder. Their expectations continue to rise as we become accustomed to sophisticated technology in our daily lives. After all, if my online store knows me well enough to make recommendations, shouldn’t my insurer know me too?

This is where incentives can come in to relieve the tension between the reluctance of humans to learn new technologies (in this case, agents/brokers) and the need for immediate gratification from customers, who want complaint is handled as soon as possible.

Ultimately, the whole purpose of insurance is to meet the needs of the customer. The more an agent is motivated to meet these needs with the right skills and the right products, the more the customer is satisfied. A happy insured is more likely to recommend your product or your agency, so why not motivate the team in the short term to make clients happy in the long term?

And one last remark. With regard to incentives, money is not king. The Incentive Research Foundation (IRF) found that 83% of survey respondents consider redeemable points a pleasure and 80% said receiving points rather than cash rewards felt like a gift. The key is to align incentives with goals and ensure your rewards in turn align with your company culture and staff preferences.

Robin Williams ([email protected]) is the marketing manager of One10 Strategic Marketing.

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