Since every team is different, we have created 3 options for team based incentive plans.
Incentive plans can drive agency owners nuts - what to do, will people like it, will it motivate the team? Sometimes we overthink it and then it never goes anywhere.
Before you create an incentive plan you MUST first start by having a goal to target. The goal will help you align your sales incentive plan.
For this article we are focused on rewarding teams rather than individual incentive plans.
Select Your Timeframe
You have to identify if this is a monthly, quarterly or annual incentive plan. Generally for personal lines we focus on a monthly target and commercial lines quarterly.
Divide The Goal Into Teams
If you have an entire agency goal it's important you divide the agency into Personal, Commercial and Producers. You need to allocate each team's portion of the goal. For the incentive plan we recommend having an agencywide incentive (for the entire agency hitting the goal) and one for each department if they hit their goal.
Start With a Budget
Budgets aren't just for your personal life, they need to be in agencies as well! You must select your budget. Here is our calculation:
Total $ Premium Goal for that Period X Average Commission= Approximate Revenue
Approximate Revenue * 5% = Budget
Tip: Every agency's compensation strategy is different. If you have producers you have to pay out in addition to the budget 5% is reasonable. If you are starting from scratch with no performance based pay for anyone you can increase this number to 10-15%
Build Your Plan With Three Options
Every good incentive plan has the one thing built in that everyone wants more than anything and that is Recognition!
In addition, I need to encourage agency owners to know your audience. Many service people are not motivated by money. They want to know they are doing a good job.
Tip: Most service people will take a financial reward and spend it on someone else; their home, family etc. This is why you want to stay away from strictly dollar incentives. In addition, getting a bonus in your paycheck is nice but it takes away the recognition component.
Option 1: Big Gesture
If the department hits their goal you do a big gesture. Some ideas include:
- Car Detailing
- House Cleaning
- Date Night Gift Card
- Spa Day
If the agency hits their goal, do a fun agency activity together. Some ideas include:
- Ax throwing
- Go Cart Racing
- Dinner Out
- Minor league ball game
- Or let the department who crushed their goal decide
Option 2: Big Checks
So you may be still stuck on the cash thing. You can do cash but it needs to be tied strongly to recognition.
When you are rolling this plan out set a bonus $ amount for if the department hits their goal and if the agency hits their goal.
Ask each team member (before you announce the goals and incentive plan) to share what they would do with a bonus of that amount.
If the team hits it - complete what their wish was.
Option 3: Time Off (Carefully)
If you know us, we don't encourage time off as an incentive. The main reason is it's hard to manage and can cause even more backlog.
However, every quarter has some fun bonus days you can work toward for the team.
Quarter 1: Martin Luther King Day, Presidents Day
Quarter 2: Memorial Day, Good Friday, Easter Monday
Quarter 3: 4th of July, Labor Day
Quarter 4: Day After Thanksgiving, Columbus Day, Veterans Day
If the team hits their goal, they get a bonus day off either for the holiday or around it!
Don't forget to cheer the team on. One key to a successful incentive plan is you cheerleading and recognizing along the way!