Broker Management: Beyond “Crap”

The main functions within a brokerage are not difficult to decipher. You have a principal or executive management team and three distinct roles – salespeople, service representatives and processing personnel. Or as we refer to them: account executives, account managers and account representatives.

These roles are typically clearer and easier to observe in a smaller operation. But, when brokerages get bigger, work functions often blur and become entangled in a confused sea of paperwork, misspent energy and low productivity. Many brokerages have experienced – and are aware of the term – “CRAP” (can’t resist attracting paper).

BLURRED LINES

So, how do you disentangle the modern brokerage operation? As a principal, it is your job to sharply define these roles, hire the right people and let them do what they do best. Everyone has a unique ability, a set of skills that they are not only good at, but also enjoy doing. The goal is to hire people with a cross-section of unique abilities that together form a high performance team.

Truly successful brokers value the concept of the “high performance team”, in which there are complementary abilities, but also a high-level of accountability for each position. There are non-optional behaviors and high expectations, but also concrete rewards and targeted incentives. Members of the team realize what they are good at – and what they should let go of.

For example, as a principal/senior manager are you spending at least 80%-90% of your time on strategic planning and financial planning? Or, are you micro-managing problems that others should be solving? Are your producers actually selling or are they taking it on themselves to service clients, even low-revenue accounts? Are your service people “in” or “out of the loop” when it comes to key customers? And, how efficient are your processing personnel and systems?

A critical issue for brokerages today is the “blurring of lines” between account executives and account managers – or simply the mixing up of sales and service. Principals have to make a strong division between the sales and service functions of their brokerage. We all know the role of producers is to sell, yet many still want to retain the whole account, believing that only can they provide the customer with the right answers and solutions.

Sometimes it is an ego issue, referred to as “SAKU” – the source of all knowledge in the universe. Other times, it may be a question of communication and business processes, where one person does not know what the other is working on. Either way, it interferes with the account executive’s primary role: to get business.

And what kind of service is really being provided? Is the busy account executive giving top-notch service and responding to concerns in a timely manner? Or is it one of those rushed late afternoon phone calls? The mixing up of sales and service also leaves the service representative, or account manager, out of the picture. What kind of questions are clients asking? What information do they need? What is the problem with a certain account? When do they need to hear back from us? This should form the foundation of the account manager’s work, but too often they are left guessing about the status of key clients.

SERVICE “HAND-OFF”

Once you have segmented your client base, the sales versus service functions have to be clarified. This is particularly true of the better clients – service levels have to be stratified to differentiate between the level of service and the revenue of the account.

After account executives have written an account, they should hand it off to the account manager. The account manager’s role is to provide great service to the new client, while the account executive gets ready to go after the next prospect. Your sales staff must be freed up to invest 80% of their time in four critical activities – sales, proactive renewal process, client relationship management and referral generation.

As an analogy, think of the auto dealership. You buy a car from a salesperson and, if your car has problems or needs maintenance, you do not call the salesperson, but a service shop or representative. If all car buyers were calling the salesperson with their problems, he/she would not have any time to sell. The same holds true for brokerages and account executives.

For account executives, the challenge is letting go and trusting the service representative to do a great job. It’s the sense that “if I don’t do it, it won’t get done properly.” That exhibits a distrust that spreads throughout the brokerage like a plague.

For account managers, the challenge is to take control of the service role. They have to establish their place, find out what needs to be done and go after it. Basically, it is critical for the account manager to take the “hand-off” and hit the ground running. The account manager can decide whether the account requires more service/information or can go directly to processing. A quick decision at this stage, with all the relevant information in hand, can solve problems down the road.

GETTING IT RIGHT

Getting the right people in the right roles and letting them do their jobs. It sounds simple, but it is amazing how many brokerages do not have these fundamental principles in place. Instead, one of the most common complaints heard from brokers these days is, “I can’t find, or keep, good salespeople or service representatives”. While there are many factors behind this trend (poor hiring strategies, ineffective incentive programs), it is often the structure of the brokerage and the lack of clearly defined roles that create the attrition.

So, what is the biggest challenge in getting the service hand-off to work seamlessly? It may just be the principal or executive team. Brokerage executives are notorious for wanting to tamper with things and “micro-manage” the process. This is a sure way to sabotage the service hand-off. Principals have to create a strategy to make the service hand-off a reality by changing their brokerage’s internal structure to create an account management organization.

Allowing the account executives and managers, the people who are closest to the business, work out sales and servicing issues frees up the principal’s time for broader issues like strategic and financial planning. Do not “dumb-down” your brokerage by having producers spending too much time on service and service representatives doing clerical work and fixing producers’ mistakes. Define the structure and roles, make accountabilities clear and then leave it up to your team to perform.