Today's Viewpoint: A MarshBerry Publication

Minimum Account Thresholds: A Win for Producers & Brokerages

Establishing minimum account thresholds not only increases producer accountability but also promotes growth for brokerages. But this advantage does not come easy. You must have the right environment, the right people and the right threshold to reap the benefits.  

Goal setting is an integral piece of building a successful producer roadmap. Setting, measuring, and fulfilling goals keeps producers motivated and accountable, inspiring them to perform at their best. Not only should producers know their value and set goals based on that, but they should additionally stretch their goals to push themselves out of their comfort zone and outperform even their own expectations.  

An important aspect of goal setting is establishing minimum account thresholds. This threshold sets a standard for the type/size of account required to do business with the producer. These vary from producer to producer and can be based on book size, location, specialty, or other factors. It also requires potential clients to meet certain criteria such as premium volume.  

Optimize your growth using minimum account thresholds

Establishing thresholds can help producers better understand where their time and resources are being used and how to make the most efficient use of those. If implemented properly, a minimum account threshold will drive producer book growth and leave them greater capacity to keep fishing “upstream” for new business. This is vital for producers to succeed and firms to grow.  

Insurance agencies and brokerages that are committed to producer accountability and performance, transitioning non-producers out of sales roles, and reacting swiftly to productivity issues – are more likely to reach growth goals.  

How can you make minimum account thresholds a successful business strategy?  

For minimum account thresholds to be successful they must be implemented properly. Here are five things to consider: 

  1. Do you have a sales culture? Good sales habits and an engaged culture are a sure-fire way to encourage growth. Leaders can make sales a top priority by socializing victories, encouraging ongoing sales skill development and creating a competitive sales culture.  
  1. What is your producer accountability like? Producers must be kept to a high standard based on company and personal goals. Meeting and exceeding those goals must be acknowledged and rewarded. It’s also key to share how underperformance will be addressed. Successful producers utilize the CRM to understand their flow metrics towards closed deals.  
  1. Are you recruiting producers with a growth mindset? Hiring the right people is a big part of executing a successful sales strategy. Producer must have a high level of self-accountability and a go-getter attitude to have a successful growth mindset.  
  1. Do you have trust within your team? Producers can create more bandwidth by trading down smaller accounts to dedicated service staff, and establishing small business units for policies below the threshold. A certain level of trust is required amongst employees in order for this to work efficiently. Working together to make the most efficient use of time and resources is critical to successfully executing minimum account thresholds.  
  1. Do you know your prospects? In order to set thresholds and balance relationships, producers must understand their prospects. This includes knowing their industry, understanding their company, knowing their role within the firm and understanding their personal concerns. Knowing this information will limit time spent selling business that is non profitable. This responsibility falls partly on sales leadership to help producers understand their selling environment (businesses and industries in your footprint).  

Exceptions must be strategic.

Like every rule, there are a few exceptions. Minimum account thresholds can be dismissed for strategic opportunities if the policy value has strong opportunities for the brokerage. Taking advantage of these exceptions promotes growth and new business opportunities. Sometimes clients bring value outside of their premiums. When the value of the relationship with the prospect outweighs the face value of a policy, minimums can also be overlooked by justifying the larger revenue or prospecting opportunity. “Spiral prospecting” from a smaller client with high referral value is an example of bypassing minimums to help the overall goals of the company.  

What is the right minimum account threshold for your brokerage?  

Establishing a minimum account threshold must be based around your growth goals. Standard high growth firms double every five years. Using the Rule of 72 (a formula to determine how long it takes to double an investment), this breaks down to a 15% growth margin every year for five years.  

Companies striving to increase growth by 15% each year should establish a minimum account threshold where producers are not paid renewal commission. But finding the right minimum is a balancing act. Too high and you’ll discourage producers and lose volume of small accounts. Too low and producers are not pushed to their highest potential, leaving a performance gap.  

Recognizing the importance of selling specialty and niche business will also help to limit time spent on accounts below thresholds. Other things to consider are your geographical location, type of policies available, and clientele.  

Finding ways for producers to sell larger policies regularly can benefit the company’s growth goals and allow producers to grow their book – a win-win for everyone.  

Evaluating the effectiveness of minimum account thresholds is also vital to their success. MarshBerry’s proprietary benchmarking systems and industry comparative metrics can inform your brokerage on the impact of trading down smaller accounts, evaluating producers, increasing accountability, and optimizing thresholds – all things required to be a successful growth-oriented firm. Find out the industry standard account threshold for brokerages similar to your own, as well as other industry trends through MarshBerry’s benchmarking reports.  

If you have questions about Today’s ViewPoint, or would like to discuss any impact minimum account thresholds could have on your business, please email or call Brandon Hardesty, Vice President, at 440.769.0320.

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Contact Brandon Hardesty
If you have questions about Today's ViewPoint, or would like to learn more about how MarshBerry can help your firm determine its path forward, please email or call Brandon Hardesty, Vice President, at 440.769.0320.

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