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The Agent-Friendly Guide to Marketing Yourself Online: The Basics

The Agent-friendly Guide to Marketing Yourself online: The Basics

The internet is an important vein of communication few of us can afford to ignore; It’s a fast and accessible way to find helpful information relevant to your needs. Mortgage and life protection is a real need for many Americans, and the internet is one avenue they take in researching what we have to offer?

Setting up and maintaining a website can bring you into the eye line of many new customers, but in order to attract the right crowd, you should take to heart some simple ways to market your site.

That might sound fishy to a few of you; “But Emily,” You might say. “I’m an insurance agent, not a Marketing tycoon. What business do I have trying to market my website?

“Well, you’ll have more business if you do.  That’s the whole point of marketing!”

You don’t have to be a marketing expert to make your website more accessible and helpful to potential clients. To make your information simpler and more available in different ways.

Below are a few basic tricks and tips on attracting more eyeballs to your website, and ultimately to you.

ProtectYourHome.com  versus 123mpcins.net

Have you ever gotten an address that seemed impossible to remember? You get lost, have to turn around and ask for directions. Maybe you just give up and head back to familiar lands.  The internet is no different. If you choose a domain name that has a couple of random letters and numbers in it, not only will you fade into the crowd but you’ll look less credible.

Besides, do you really want to be known as  123mpcins?

Choose a name that you could easily tell someone by mouth, and that’s related to what you’re doing. Be creative! What does mortgage protection mean? What do you want to do for families? It might take some brainstorming, but if you come up with something clever, your potential clients will remember your address, and admire you for your creativity.

If you’re having real trouble finding a website domain that isn’t taken, look at taking alternate websites such as .info. I once had to do a project with a catchy website name, and took .info as a domain instead of the popular .com. It wasn’t mainstream, but it was much easier to remember…and we got the name we wanted associated with our group.  Alternate domain names also can be cheaper than the typical .com. It wasn’t as expensive to buy, either.

Make it User-Friendly

Imagine you walk into a bookstore in search of a book on yoga. You look all around for signs to tell you where the Fitness section is located, but to no avail. You are awash in a sea of paperbacks and hard covers.  You walk out.

This can happen online too if your website is a mess.

Make your site as easy to navigate. There should be a navigation bar either on the top of your website or on the side.  On the navigation bar, put clear and concise links to separate parts of your website. These links should have titles that are easy to understand and relevant to the sub-pages they send your visitor to.

For example, let’s look at NAAlife’s website. The website functions as a place where clients can get information on the insurance products NAA offers. The navigation bar clearly supports this purpose by putting the types of plans as sub-pages and links on the front page.  Brainstorm what you want to say to your clients, and what information you want easily available. What would you like to see on a website’s navigation bar?

Picture that bookstore again. You turn a corner and see books crammed into shelves and laying in piles on the floor.  Immediately you wonder why the owner has let his store become so messy. Do you really want to buy from this person?

The same stigma can be applied to your website if you don’t keep it clean and organized. Modern technology allows us to add a lot of fancy animated graphics and high-resolution pictures. Your main goal, however, is to keep your website layout simple and clean. Err on the side of simplicity creating it, or hire a professional website designer whose work is credible.

Luckily for some agents, corporations like NAA provide solid websites for all its agents - SEO taken into account, and all.

Your Most Important Asset is You

Building all the important parts to your website, you might forget the most important aspect of it: you. You’re the reason it’s being made right? Don’t squander the moment to grab the spotlight.

Just like a business card, your contact information should be the centerpiece of your site. Put your phone and address in the forefront of your visitor’s minds. NAA produces custom websites for agents that do just that. A picture can also add a personal touch to the website; remember, your clients want to be able to relate to you as a person. Adding this information will help them put a name, face, and address to their agent.

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These are just a few of the many things you can do in order to make your information accessible on the internet.  We’ll be discussing more advanced ways you can make your website pop up in searches, as well as what you can do outside the web to market yourself.  Stay tuned!

Are You Looking In The Right Places for Leadership?

From the time we’re kids till we’re fully grown, one thing never changes; we’re all looking for someone to look up to. When we’re the new kid on the block, it’s instinctual to search for someone to emulate and mentor, especially in situations where you feel inexperienced or at odds with our environment.

But surely by the time you’re grown and in the business world you’ve learned what to look for in a leader…right?

Not necessarily.

Most of us grow up with good teachers, coaches, parents and pastors that guide us on the right track, but not everyone we learn from is a good role model. Take the kid that learns bad words from their parents and turns into a potty mouth. Or the child who follows his big brother’s footsteps, whether they are good or bad.

In the world of insurance sales, you’ll look to your manager by default for leadership. However, being a manager does not necessarily mean you are a leader. S/he may or may not have the time or skills to properly give you guidance.

In the event of a manager without leadership skills, break glass.

If you’re in this position, don’t give up! Quitting and blaming it on your manager is giving up your own responsibility in your situation. You have to fight for success, and sometimes that means looking in creative places for a mentor.

Many times, people forget that above your manager, there is a higher line of managers that have proven success. There will always be people above your line of hierchy that retain the core values of your company, and have proven growth. At NAA, we call these leaders our core managers, or leaders.

Tap into the core leaders that surround you, even if they aren’t within arm’s length. You can often glean from their behavior and advice important lessons that will elevate you in the future. Make sure whatever vein of mentorship you follow, they are a proven leader.

Now that you have a direction to point your vessel, it’s time to put some wind in your “sales”. Peter F. Drucker once said “Management is doing things right; leadership is doing the right things.” Not every manager is a leader, and it’s up to you to determine this and find the right person to edify. Reach up, around and over for the guidance you need. Having a clear vision of your core leaders and values is an important part of NAA, and can be applied to everyday life.

Finding leaders in unlikely places shows an agent’s ability to be adaptive. Devoted readers, where is the most unlikely place you’ve found a role model?

Think like a Manager: Making a transition from Salesman to Manager

When it comes to being an agent, there is a lot of meat-and-potatoes hard work that you must do in order to become successful. Making those calls and appointments is something not everyone can do, and you should be proud of that.

But how do you reach the next level? Manager, regional manager, even your own agency; these are the dreams of many hard working agents that don’t see the title of “salesmen” as their stopping point. The answer is right under your nose, or more literally, right in your office.

In order to make a transition from agent to manager, you have to think like a manager.

It’s easy enough to say, but what does this mean in action?

Review Yourself.

One thing a manager must do constantly is evaluate the merit and returns of his recruits. Don’t wait for your own manager to tell you what you’re doing right or wrong; look at your own performance and make an evaluation.

This includes seeing if you have good persistency, but also look at your care ratio and see where you fall. As an agent, think of all you could independently achieve if you too tracked your appointment s, submissions, referrals, and lead rates, as well as fighting hard to achieve high percentages. Doing so will give you the self-awareness of what you’re succeeding at and where you need to improve.

Manage Now!

Pietro Aretino once said “I am a king, because I know how to rule myself.” You may not want to become the next Richard III, but you can’t expect to manage other people if you can’t manage yourself. Use your time and money efficiently and effectively. That means making a schedule and sticking to it and avoiding the dreaded pitfalls of profitability. If you have credit debt, make it a priority to consolidate it so you’ll set a financially responsible example for your down line.

If you continue to succeed, your finances will grow and your time will most likely shrink; now is the time to manage on the ground floor before you start building up!

Have a mentor.

People look high and low for mentors, but you really need only to peek your head above your manager’s cubicle. Your manager has been in your exact position, strived hard and found his own success. It makes sense, then, that you should pay attention to what he has to say and what he does. You’ll probably find your own style of managing, but the core values and behaviors you need to excel never change.

Look ahead!

Having vision for the future determines a leader from a follower. Know where you want to be in the next year and know how to get there. You can do this financially by saving in hopes of the future, as well as sacrificing luxuries; Barry Clarkson encourages NAA agents to have a 6 month to year’s worth of income saved in case of emergency. If you’ve built a foundation, talk to your manager about beginning to recruit and growing your own branches.

The future is sometimes unpredictable, but you can take steps today to prepare for success tomorrow.

Know Your “Why.”

 

If you want to have staying and growing power, you should have a good “why.” We’re not talking about an alphabet or some type of martial arts; you have to be in the business for the right reasons.

Sit down with and ask yourself “why do I want to be successful? Why do I want to do this for a living?” If the only answer you can come up with is “money,” then you might be in trouble; history has shown that agents that only want financial success don’t stay in for the long haul. When you’re bleary eyed, aching, and still have appointments to make, you’ll need more than money to convince you to go on.

Do you want a better life for you and your spouse? Maybe you simply want to help people. Whatever your reason is, make sure it’s a substantial one that will get you through the trials and tribulations when you reach for success.

Tell us, what is your “why?”

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The above doesn’t include all the parts to becoming a great manager, but it highlights the important mindset and prepatory work you should do in order to get into the right gear. Now go out there and climb that ladder!

Pitfalls of Profitability 2: Understanding What Return on Investment Really Means

To get to the top, an agent needs integrity, tenacity, and ability to look forward into the future. Besides these characteristics, an understanding of basic business principles goes a long way, especially if you’re trying to grow an agency.  One thing that you might not get quizzed on in earning your insurance license, however, is understanding the relationship between your expenses and your net worth.  If you’re priming to build a business, or success, you should perk up for the next part of this post.

 

One of the core principles of business is the concept of Return on Investment, or ROI. It’s a very simple equation that shows you the relation of how much you spend (or expenses) to your overall earnings.

 

(gross income - total costs) = ____ x100 = ROI %

Total costs

 

Or…

500-250 = 2 x 100 = 200%

250

                                                               

 

ROI is a tool that can help you determine how much you’re putting in, and how much you’re getting back in relation. If the percentage is high, you’re doing a good job of producing a gross income. If, however, your percentage is low, you might be burning too much of your income up in expenses.

 

What’s really important to remember is how what you make and what you spend making it are related. If you’re making $20,000 a month but spending $10,000 in expenses, your net gain is only $10,000. If your income grows but your expenses stay the same, your net gain could end up increasing and you’ll make a greater profit. Just the opposite can happen as well; your expenses can grow far more than your overall income, causing you to owe instead of profiting.

 

So how can you build your profits, and possibly an agency?

 

Be Flexible.

Don’t be afraid to grow; you have to look at the big picture when growing your company. This may mean increasing your expenses, but if it will mean your income will increase as well, you will ultimately profit. You must be able to have the vision, as well as the flexibility to reevaluate your finances with growth on your mind.

 

Some people can do this, some can’t.

 

Know What You Value

Sometimes, it’s not all about cold hard cash. There are other factors to…well…”factor” in to your assessment on ROI.

 

•             Time - how much time are you spending producing income? Do you value keeping the amount of time working the same? What value would you place on your work if you had to decrease your leisure time, but could also increase your end profit? Do you value your personal time, or are you willing to cut back in order to increase your profit? If not, you might need to think about making your working hours work more for you by becoming more efficient.

 

•             Accuracy – are you being efficient in the amount of effort you put out and how much revenue is produced by it? We all want to get 100% of profits from our work, but if you’re not being efficient, you might be sacrificing more time with less value. Evaluate where your time goes and how much work is getting done. Programs like KIT Marketing can help you increase your efficiency by managing and retaining your contacts.

 

•             Risk – Nothing in life in certain, and this includes growth. Are you willing to take some risk in order to become more profitable? What value do you place on being stable? On becoming more profitable? These answers will tell you how much to invest in your own profit growth.

 

Become a Psychic.

Compared to the above paragraphs littered with equations, revenues and expenses, this title might seem a little off. However, predicting the future is an important part of weighing the advantages and disadvantages of growing your business.

 

The ROI equation is essentially a formula that always looks back, and for good reason. As Dr. Phil says, “history is the number one indicator of future behavior.” Do some number crunching and find out how much time and money you’re getting on your investments. If you don’t like what you see, change the factors in the present and make a change for the better.

 

As we’ve often noted in the past, you also have a resource right in your agency; your agency manager. The best place to look for advice is right in your own backyard; ask your manager for guidance and advice about financial planning when it comes to trying to grow.  Wherever you want to go, your manager has most likely reached himself.

 

 

In order to go further, you’re going to have to change from a salesman to a businessman. This takes understanding financial factors like ROI and several others.  Start to take steps to understanding your ROI by reading up on the basics.

How to make sure your client doesn’t Bail-Out

The news of the government bailout has many people running scared about their financial future which most likely includes some of your own clients.

Many of their fears are justified; the basics of a 401K plan include investing retirement money into the stock market, which has proven itself a little less than reliable over the past few months. As to who is to blame for our current condition will probably be debated for a while, but what is immediate and real is the question…

“How am I Going to Pay for this?”
We’re in tough times these days; no one is going to deny that. Because of the recent fallout with the stock market, banks are going under and people are worried if their retirement money is safe.  Can you, with a clear conscience, tell them it is?

You can if you encourage them to invest in annuities. 

Even before the market meltdown, annuities were the answer for people who feared an uncertain retirement plan for their generation.  Here are some key reasons why Annuities are safer and more beneficial investment for your clients:

Get yourself out of the Market Gamble.
One of the most compelling arguments that you can make about annuities is that it takes your client’s retirement funds out of the risky game of the market, and into a secure and guaranteed payback system that will not fluctuate. No matter how low (how very very low) the market can plummet, it will not affect your client’s annuity.

This is the main benefit from investing in annuities over IRA and 401k; financial peace-of-mind in a turbulent economic time. So while the market plays the limbo game, have the foresight to offer your clients this escape out of Wall Street’s money games by investing in one of the many annuities offered.

Don’t limit yourself.
One thing that is appealing about IRA’s and 401K’s is the ability to defer taxes. Unfortunately, there is a price to holding back on the pay up to the government, and that’s restrictions on how much you can earn.  Annuities can give you more flexibility on what you are allowed to earn without punishing you financially.

Income annuities can also guarantee your client a regular sum of money, whereas retirement funds become more and more sketchy over time. Considering that our retirement system is already feeling the demands of the baby boomer generation, this is a more secure way of making sure their retirement is secure.

Earn Money from what you Invest.
401k stores your retirement funds in the stock market, but it doesn’t guarantee you any type of profit. With an annuity, you’re guaranteed a minimum rate of return; some have even made upwards of 10%! You can still “play the market” with none of the risk. If the stock market tumbles, your investment stays the same. Your initial investment and any previous earnings will act as a foundation instead of a dropping point.

Not only that, you can even earn more money than what was originally in your 401K by investing in them. With annuities, it won’t just be a countdown to zero with your savings; you can actually earn more money than what is in the original funds with a minimum rate of return that is often greater than certificates of deposits (CD’s) or savings accounts.
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Financial safety is American’s primary concern, so much that the presidential debate’s theme on September 26th switched from Iraq to the Economy. While it’s uncertain how the bailout will pan out for all of us, you can offer your clients stability and safety from the gamble of the stock market.

Romancing the Clients: How to Improve Your Persistency

Answers.com defines persistency as, “Percentage of life insurance or other insurance policies remaining in force; percentage of policies that have not lapsed. The higher the percentage, the greater the persistency.” It’s a part of sales that can be easily overlooked. To remain profitable in insurance, however, it isn’t enough to sell; you also have to retain your clients.

Now, think about persistency for a moment. What’s the first thing that pops into your head? Chances are, it’s not marriage. After all, what does persistency have to do with matrimony? The two seem further in relation than your cousin and a kumquat.

But the relationship between a client and an agent is just that, a relationship. It takes courtship, compromise, and commitment to get a contract signed. However, walking down the aisle and saying your “I do’s” isn’t the end of it. Marriage is a commitment and, in many ways, so is a contract. If your client doesn’t think you care, it can cause a rift… or even “divorce.” In the world of insurance sales, that means cancelled contracts, which can lead to the dreaded chargeback.

In order to have good persistency, then, you have to treat your agent-client relationships with care. Your clients trust you, they’ve made a commitment to you, and they expect to be treated well. Here are a few ways to keep them happy after the contract is signed.

1. Keep in touch. Communication is the key to a good relationship. Keep that bond strong by reaching out to your clients. Express interest in them outside the context of business. A simple birthday card or phone call can do wonders. If you’re looking for an automated solution, NAA’s KIT letters can go a long way toward showing your clients how much you care.
    
2. Earn their loyalty. When you really love someone, it’s often for more than one reason. It could be their sense of humor, their personality, or their smile. When it comes to your clients, the relationship should also be multi-tiered. Having multiple contracts with them is a great way to retain persistency. The more policies they have with you, the more likely they are to retain their policies and ask you for assistance with future needs. To paraphrase Philip Hudgins, “Help someone once and they’re your customer. Help them twice and they’re your client. Help them three times and they’re your client for life.”
    
3. Make them nostalgic. What if the passion of your relationship has cooled and you’ve already been “divorced?” You can still salvage your relationship by contacting the client and asking why they cancelled. A little reminder may help them remember why they signed up in the first place, or it may reveal another problem you can help them deal with. Rekindle that spark of passion and you may be able to save the relationship.

Remember; persistency is like a marriage. You’ve already committed to one another. If you take the time to show your clients how much you care, and seek out opportunities to “romance” them further, you’ll enjoy a long, fruitful relationship together.

Overcoming PTRD, Step Three: Your Rx for Success

In our past installments, we’ve confronted the uncomfortable issue of PTRD (Post-Traumatic Reading Disorder) and how it may be affecting your personal and professional development. We also gave a few reasons why reading is so important. Now, it’s time to solve the problem. Are you ready to kick PTRD once and for all? Here’s your Rx for success.

Prescription: A Balanced Reading Diet

The important thing to remember about what you read is variety (no, not the magazine). Reading is very much like eating; if you consume the same thing every day, then you’ll get out of shape. The key is to read a range of different topics.

Of course, here at NAA we’re especially fond of motivational and leadership books. Authors like John Maxwell and Dale Carnegie give pinpointed advice on honing your leadership abilities to succeed in the work world. These books will help you see your potential, build your character, and grow as a human being. If you’re one of our agents, the NAA Store’s book section contains a lot of our favorites.

Another part of your diet should include current news, blogs, and trade publications. Many of you might already read the paper every morning, but subscribing to blogs and magazines to find out what’s going on in your industry is a great way to get ahead. Of course, we’d be remiss not to recommend subscribing to NAA Leads the Way for your weekly dose of sales training if you haven’t already.

Finally, you should consider reading works of fiction. War and Peace might be overkill, but something to exercise your ability to think creatively as well as refine your palette for reading comprehension is just what the doctor ordered. Francis Bacon once said, “Truth is so hard to tell, it sometimes needs fiction to make it plausible.” A little dose of fiction in your diet will help keep your creative vision sharp so you can solve those “unsolvable” problems. If you’re not sure where to start, CNN posted a great list of easy-reading fiction that will stir your imagination and hone your reading comprehension.

Dosage: 15 Minutes a Day

Rachel Ray might need 30 minutes to cook a decent meat loaf, but it only takes 15 minutes a day to get into a reading habit.  That’s not really a lot; it’s the collective amount of time most people spend staring into space every day. In 15 minutes, you can bite off a good chunk of information that won’t choke you or leave you starving for more.

The point is to start out slowly and enjoy yourself. Who knows? You may start to like it so much that those 15 minutes a day start to creep up to 30 minutes, 45 minutes, or an hour. That’s when you know you’re cured.

Overcoming PTRD, Step Two: Reasons to Love Reading

In last week’s post, we identified the trauma of childhood reading and how it affects many adults in their personal and professional lives. Maybe you had to translate The Count of Monte Cristo into interpretive dance, or give an hour-long presentation on War and Peace. This experience was traumatic enough to make you dislike anything with a verb, a noun, or, heaven forbid, a subordinate clause in it. Sadly, that aversion is preventing you from appreciating reading for what it truly is: An enjoyable pastime and a valuable life skill.

Many people convince themselves that reading is not a significant part of their lives after they get out of school. According to some sources, 58% of adults never read another book after high school. Sure, you’re not going to have to write on the duality of character foils, but regular reading offers many benefits beyond the purely academic.

Better Communication through Understanding

The more you read about the world around you, the more you’ll understand it and those who live in it. This includes clients, friends, associates, and even your family. Reading likewise gives you the opportunity to understand issues that would normally be foreign to you. As Stephen Covey points out in 7 Habits of Highly Effective People, seeking first to understand then to be understood is a powerfully effective way to communicate.

“Out of the Box” Problem Solving

If you’ve ever felt like you were running in circles trying to solve a problem, you’ve experienced an issue that many people in business face at one time or another; deadlock thinking. Difficult problems often call for creative solutions, and reading can help you develop the sort of creative thinking to tackle them.

The Savvy to Succeed

Nowadays, it takes more than pluck and moxie to succeed. To get ahead, you also need savvy. Market trends, cutting-edge tactics, emerging philosophies, modern technologies… the playbook is constantly evolving. If you want to stay on top of your game, reading regularly is a great way to do it.

Now that you know why reading is so important, you’ve got two important questions to answer: What should you read, and how much? Come back next week for our final installment and we’ll prescribe a reading regimen to put you on the road to recovery.

Overcoming PTRD, Step One: Admitting You Have a Problem

Is your reading list limited to emails and the backs of cereal boxes? Are you feeling lost in the modern world? Do you feel stunted in your development as a salesperson, or as a person in general? Believe it or not, these are all signs of a very serious mental condition called Post Traumatic Reading Disorder, or PTRD.

When it comes to anxiety, reading is an underestimated problem. It might not be something that Dr. Phil discusses between out-of-control teen day and husband boot camp, but it’s something that affects many of us. Still, you might have been traumatized and not even realize it.

Diagnosis

Think back to your childhood. Do you remember throwing together a hastily-written book report on Treasure Island, or reading James Joyce’s Ulysses in college and having no clue what it meant? The books themselves are harmless, but reading them is nonetheless traumatic for one important reason: You’re forced to do it. Not only that, you’re forced to write essays on them. This demand for regurgitation can cause severe performance anxiety which, in the end, turns you off to reading altogether.

Fast-forward a few decades. You’re in the real world now, trying to get ahead and excel in sales. Not reading regularly will affect your performance and your happiness in general. You know that reading should be a part of your day-to-day life. There are reports, memos, proposals, and contracts waiting on your desk at work, and books waiting on your nightstand at home. You feel guilty neglecting them and the value they could be adding to your life. Still, you just can’t bring yourself to give them the attention they deserve, all because of PTRD.

Symptoms

Without the proper recovery program, you’ll only continue to suffer from Post Traumatic Reading Disorder. Some of the common symptoms include:

• Difficulty developing and understanding new ideas
• Lack of inspiration
• Lack of personal and professional fulfillment
• Poor writing style
• Failure to stay competitive in the sales force

Treatment

I know; this is starting to sound like one of those commercials for anti-depressants or “invigorators,” but we promise not to tell you to talk to your doctor about some cure-all medication. In fact, there’s a simple cure for PTRD that’s 100% effective: A regular dose of R-E-A-D-I-N-G.

Now that you know why you don’t like to read, it’s time to learn all the reasons why you should love it. Next week, we’ll delve into how regular reading can make you a happier and more successful individual.

Want to kick start your PTRD treatment right away? Subscribe now for a weekly dose of sales inspiration.

The Pitfalls of Profitability, and How to Avoid Them

Many people think earning money is the only step to profitability, but there are pitfalls you might face as an agent if you only focus on dollar signs. We’ve consulted with the pros of proven profitability (try to say that three times fast) and here’s the advice they gave us:

Profitability Pitfall #1 - Pacing

If you’re a new agent, you’re probably excited and ready to hit the ground running. That sort of enthusiasm will take you far, but it may also trip you up. When you’re just starting out, it’s important to realize that there will be financial and logistical limitations. Think of yourself like a great runner or race horse; if you sprint forward in the first few seconds of the race, you’ll run out of steam before you hit the finish line.

Consider this scenario: Your upline manager gives you 100 leads to work with. Once you sign contracts with these clients, you may be tempted to buy 100 leads yourself. Remember, though, your manager is working from a reserve of funds s/he has built up over time. Buy that many leads yourself and you may turn upside down if you break your stride.

Obviously, proper pacing is paramount to profitability (another tongue-twister). If you feel like you’re going too fast, here are three ways to slow down and regain control.

1. Start on the Right Foot. You might think that the interview process is only for you, but check out your upline manager before being hired and find out what type of leader s/he is. If they expect you to buy a large amount of leads on your own or sell a massive amount in your first week, ask yourself honestly if you think you can do it.
2. Talk to your Upline Manager. If you’re feeling overwhelmed with leads or a certain quota goal, be honest and see if the two of you can come up with a strategy to help you achieve it together.
3. Work with What You Have. Instead of buying out expensive leads, use referrals from leads you’ve already bought. Phillip Hudgins proves that this method is a great way to get more bang for your buck.

Profitability Pitfall #2 - Chargebacks

Here’s a nasty not-so-secret about the insurance business. There are two types of commissions; advanced and as-earned. Advanced commissions will deliver all or most of your commission in one lump sum, while as-earned commissions are allotted to you in smaller increments monthly.

I know what you’re thinking: Lump sum sounds great! With all that money in the bank right away, you could buy whatever you wanted! A new car, a flat-panel TV, an iPhone… you worked hard; you deserve a luxury or two.

Then, your client decides to cancel his contract or let his policy lapse, and the money advanced to you is suddenly not there. You have to repay the amount not gathered from the original contract with money you’ve already spent!

Many times you’re hanging on by an advanced commission for almost the entirety of a client’s policy before it’s transferred to an as-earned commission. You can easily be lulled into a false sense of security 5 or even 6 months into a policy, but even this far in, a canceled contract could result in the financial rug being pulled out from underneath you!

This is called a “chargeback,” and is why as-earned commissions are safer profit-wise. If you do have an advanced commission set-up, it’s best to hold on to your advanced money until the contract clears with your client, or treat it as if it was an as-earned commission. This will prevent you from spending more than you actually have in the bank.

But what if you just can’t hold on to all that money? It’s true that in order to make money, you have to spend money. In that case, budget your commission money well. This goes hand-in-hand with pacing; know where your money is going and how much of it is being spent. We recommend setting aside around 20% of your commissions in your “in case of chargebacks, break glass” file in the untimely event that a contract falls through.

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At NAA, enthusiasm and tenacity are great skills that will take you a long way. However, in order to maintain, you have to pace your sales as well as your commissions. You can grow too fast and fall hard if you don’t keep your eyes on your funds and portion out your profits. A seed can’t grow into a tree in one day, but persistence and prudence will take you far.