EF summer 08.indd - National Association of Professional Allstate ...

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membership musings Standing By You Since 1990 BY JIM FISH Every so often we find it necessary to publish a bit of historical information about our association and how it came into being some 18 years ago. We do this for the benefit of newer agents who are not aware of who we are or why we exist. NAPAA was founded in 1990, the same year that the company introduced its first EA “independent contractor” agreement. At the time, these independent contractor agents were commonly referred to as NEAs, a term that has since been shortened to EAs. Back then, the vast majority of Allstate agents were still employee agents. Many, if not most, of them had opted to become Neighborhood Office Agents (NOAs), a cost sharing program that the company heavily promoted in the 1980s. Agents under the NOA program were still employees, but had some control over their office expenses. The company provided an Office Expense Allowance (OEA), but one and two agent locations struggled as many regularly outspent the funds they were allotted. In the end, many agents found the OEA funds insufficient to cover their basic expenses. This realization angered NOA agents and led a group of them to form the National Neighborhood Office Agents Club, or NNOAC. While NNOAC consistently proclaimed that it was not and did not intend to become a union, the company took a dim view of the organization and did its best to feign denial of its existence. To the agents of Allstate, however, NNOAC communications echoed their own sentiments and spoke their language, causing membership to soar. By this time, the company was clearly concerned. On the surface, the company downplayed the significance of NNOAC’s rise, but behind the scenes it was conducting education/ training sessions that taught managers how to “Maintain Non-Union Status.” As a result of these tactics to discredit NNOAC, some managers went to great lengths to discourage agents from joining. In spite of these efforts, NNOAC continued to thrive and grow. In the mid 1990s the name was changed to the National Association of Professional Allstate Agents, or NAPAA. During the first 15 years of its existence, the association played a dual role. While its primary purpose was to act as an advocate and a voice for Allstate agents, it also took strong positions on certain legislative issues and other initiatives friendly to the insurance buying public; most notable were its stands opposing credit scoring and property redlining. Then in the year 2000, the company implemented its “Preparing for the Future” initiative wherein employee agents were fired, but had the option to come back to work as “independent contractors.” This event was a huge watershed in the histories of both NAPAA and Allstate. Benefits were lost and pensions were frozen – it was a traumatic and painful time for the agents affected by the company’s initiative. That one single event in the year 2000 spawned a massive exodus of Allstate agents in the early part of this decade. And while it has slowed to a trickle, the exodus continues to this day. Disillusioned veteran agents still cite that day in June 2000 as the day they stopped trusting the company and the ultimate reason for their departure. Ever since the purging of these former employee agents began, the company has been busily replacing them with new EAs. These entrepreneurial types bring a different perspective with them, at least at the outset of their careers. For the most part, they are self-sufficient and business minded. They look for ways to succeed. Sadly, many of them are woefully undercapitalized and wind up leaving because they cannot afford to stay. Unfortunately, some company managers encourage new agents to throw money at all kinds of low-return marketing schemes, a practice that only hastens their inevitable failure. Recognizing this trend, NAPAA changed its course and its mission statement in 2005. These changes allow NAPAA to focus its energies on helping 34 — Exclusivefocus Summer 2008
agency owners succeed, not only in their Allstate agencies, but in other business ventures as well. NAPAA encourages agency owners to make the most of their “independent contractor” status by developing permissible alternative streams of income and to create their own brand identity. Going forward, we believe that self-preservation and diversification will become increasingly important for agency owners. Gone are the days when agents were able to count on the company for job security and benefits. The ever-present threat of natural disasters has affected markets in coastal regions and in earthquake markets nationwide and products that agents formerly wrote through Allstate must now be written through a hodgepodge of Expanded Market carriers. The bottom line is that there are no guarantees at Allstate any longer. A lot of smaller and less productive agencies will be forced out of business due to unattainable quotas or because of ever increasing office expenses caused by the RFG, NRG and the Executive Advantage initiatives. While many of these agency owners understand what it takes to grow their agencies, they don’t have the kind of money it takes to mount a sustainable marketing campaign. For agencies trapped in this predicament, all is not lost. This is especially true if you are on pace to your AFS goals. NAPAA can assist member agencies with solutions that can help increase revenues or suggest options that may help ease cash flow problems. Let’s face it, starting an Allstate agency is not easy and, in spite of its desire to see agencies succeed, the company has little to offer in terms of assistance for struggling agency owners. In our opinion, the company is its own worst enemy. Instead of working closely with agencies to develop key strategies that actually grow PIF and drive revenues, low level managers devote too much time and effort on the hiring treadmill – a practice that is counterproductive. Rather than helping disadvantaged agencies succeed through genuine interaction and involvement, many managers compound the problem by encouraging agents to throw money at a slew of marketing schemes, adding unnecessary staff or spending money on other superfluous programs, all of which contribute to the demise of the agency by draining precious cash reserves. More often than not, this strategy fails, leaving the agent with few options to grow the business. Management doesn’t win either. When an agent fails or is about to fail, the manager is under pressure to hire another body to fill the vacancy. This process is seemingly never-ending and is repeated time and again in many markets throughout the country. It is easy to point fingers at this ongoing tragedy. Management can blame failed agency owners for their lack of due diligence in researching the Allstate opportunity and for their naivety in business matters. Failed agency owners, on the other hand, can blame management for a host of issues such as failing to provide a clear picture of the Allstate opportunity and for trivializing the amount of start-up capital needed to ensure a fair chance of success. To be fair, there are scores of honest, hard-working managers who “tell it like it is” when they hire new agents. These are the same managers who bend over backwards to help their agents succeed. Managers of this caliber should be commended by agents and management alike. If your MDL or IDL fits this profile, you are very fortunate indeed. In general, seasoned agents are not dependent on their managers. Newer agents are another matter. Most want a responsive, hands-on kind of manager because they need help and lots of it. For example, they may need someone to show them how to make effective telephone solicitations. They need a manager who’s not afraid to demonstrate this process, but who is willing to continue demonstrating for as long as it takes for the agent to get it right. What are the chances that a newer agent will luck out and get such a manager Well, even if the answer is a conservative one in 10, there is a 90% chance that he won’t – hardly an encouraging statistic. This is where NAPAA can help. Our board of directors and headquarters staff have more than 200 years of combined experience in and around Allstate – that’s a whole lot of knowledge and experience. Members have access to individual board members and to our headquarters staff. While distance doesn’t make it possible for us to sit with agents to demonstrate telemarketing techniques, there are plenty of other areas where we can help. Each of our board members and headquarters staff has had firsthand experience with the thrills and spills that are part of the new agent experience. The first year or two on the job can be turbulent and stressful, so it is critical that agents receive honest answers and useful information – something they can’t always get from management. If you call NAPAA, we will give you straight answers – but remember, this service is reserved for members only. NAPAA is in the Allstate agent business. We cannot survive without members. Following this article you will find a membership application which we hope you will complete and fax to us. We offer something for all agents, whether you are a seasoned veteran or a one month newbie who needs a lot of help. The cost of membership is less than a dollar a day. If money is tight, we also have a plan that allows you to join for free when you agree to process your payroll with E-chx Payroll Solutions at least twice per month. References for their service are available upon request. Over the years we have seen hundreds of agents join NAPAA out of desperation – right when they were on the verge of losing their business for one reason or another. Hoping for a miracle when you’re halfway out the door is not a good plan of action. A better plan would be to join NAPAA before you’re in trouble. Agents know if they’re performing to plan or not. It’s pretty simple – either you made your numbers or you didn’t. And this year in particular, the company is dead serious about agents making their numbers. So, if you haven’t made your Expected Results for the past few years, you are at risk of receiving a warning letter from the company. If you are in this position, now might be a good time to pull out all the stops and write some additional AFS business on your friends and family. Some agents have been known to “buy the shortfall” in order to make their Expected Results. While this solution is expensive, it could save your job. The question you need to ask is Summer 2008 Exclusivefocus — 35
Page 1 and 2: Exclusivefocus Summer 2008 An Offic
Page 3 and 4: We finance Allstate books of busine
Page 6 and 7: president’s letter Farewell Messa
Page 8 and 9: usiness opportunities to increase a
Page 10 and 11: letters to NAPAA I wish to terminat
Page 12 and 13: letters to NAPAA ker friends are la
Page 14 and 15: letters to NAPAA I appreciate you
Page 16 and 17: 16 — Exclusivefocus Summer 2008
Page 18 and 19: the thief becomes your health infor
Page 20 and 21: agent issues The Kafka Interview IN
Page 22 and 23: [ “I think that Canada is the tes
Page 24 and 25: usiness Would You Like Fries With T
Page 26 and 27: feature There Must be a Better Way.
Page 28 and 29: elated bonus. His first step is to
Page 30 and 31: company is “unwilling or unable
Page 32 and 33: Is a sea of paperwork slowing you d
Page 36 and 37: whether spending this amount of mon
Page 38 and 39: AAs most of you know who have been
Page 40 and 41: technology What To Expect When It
Page 42 and 43: integrated or separate video card,
Page 44 and 45: onus from Allstate, such as the rat
Page 46 and 47: technology Allstate Agents Have a C
Page 48 and 49: June 10, 2008 Ladies and Gentlemen
Page 50 and 51: on my behalf. Allstate did offer to
Page 52 and 53: and better refine your analysis. If
Page 54 and 55: staffing Is Your Staff “Engaged
Page 56 and 57: usiness tips Stronger Documentation
Page 58 and 59: organizing your business Forming an
Page 60 and 61: the NAPAA market place Agencies for
Page 62: the NAPAA market place Agencies for

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