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Is the “Reign of Terror” Over
By Jim Fish
In spite of the foreboding prognostications
by NAPAA, the agent blogging community
and to a lesser extent, the always
well-mannered National Advisory Board
(NAB) and the equally well-mannered
Agency Executive Council (AEC), Allstate
management largely ignored the rising
level of agent discontent that began with
the introduction of its ill-fated Roadmap/
Ideal Agency strategy in 2009. There was
no greater example of pent-up agent angst
than the NAPAA/OPEIU secret ballot last
summer that culminated in a 94.4% vote in
favor of affiliating with OPEIU. While the
vote was dismissed by the company, there
were immediate signs of retreat on some of
the more contentious issues, including agent
terminations and the 8/8 comp plan.
Two months later, Allstate conducted
its annual Agency Relationship Survey
(ARS), which has confirmed that the
company has experienced a much greater
than expected drop in agent confidence
and support; validating the results of the
NAPAA/OPEIU vote.
A few days before Christmas, Sr. Executive
VP of Agency Operations and
Chief Marketing Officer Mark LeNeve
fired off two missives to the agency force.
In one of them, he responded to the survey
by proclaiming, “I want you to know
we are listening, which is why we declared
agency engagement and relationships
a top priority,” a statement clearly
designed to placate the agency force.
The survey was just the latest in a series
of setbacks in the company’s fractured relationship
with its agents. The agency force,
roiled by looming commission cuts, was
less than impressed with LaNeve’s pre-
Christmas pronouncement that declared,
“For 2013 and 2014, base compensation
will be moving to 9/9, not 8/8 as previously
discussed.” As a point of particular interest,
he made no mention of what would
be in store for agents in 2015 and beyond
– which is essential information for longterm
planning. It is quite likely that several
factors played a role in forcing the company
to temporarily – and begrudgingly –
capitulate on the comp issue. Surrendering
was not something the company wanted to
do and the decision to do so was not made
in concert with the agency force, no matter
how they try to spin it. The company
is bleeding agents and customers at an unprecedented
rate, which has undoubtedly
put management in a near-crisis mode.
In its zeal to implement its Roadmap
strategy, the company overreached in
at least four key areas; ridding itself of
profitable, but less productive agencies,
insisting that existing agencies grow to
$3 to $4 million in premium or leave, allowing
agent morale to sink to rock bottom,
and demanding a 20% reduction in
base agency revenues. These and other
factors, including management’s general
disdain of the agency force, have driven
many productive agents to unexpectedly
call it quits, a huge problem for the
company. By pretending to compromise
on the commission issue, the company
hopes to quell agent unrest and stem the
exodus in one fell swoop.
The scary part for the company is that
a larger than average percentage of those
who are leaving – or planning to leave –
are opting to take TPP, forcing the company
to redistribute CIC accounts to the
agency force in order to counter solicitation
efforts by the departing agents, many
of whom are hell-bent on getting even
with Allstate. In a nutshell, Allstate now
understands that this self-inflicted debacle
could seriously cripple the company.
There were public signs of internal
turmoil as early as last May when Joe
Lacher made his infamous remarks at the
Leaders’ Forum in Orlando, which was
the same event where the 8/8 plan was
unveiled. Shortly thereafter, NAPAA
announced the secret ballot initiative
and the company immediately went
into a damage control mode, which included
meetings with the NAB and the
AEC. At the same time, bloggers on the
Agency Community Blog and the All
Blue Blog vehemently railed against the
plan. But it was the outcome of the historic
NAPAA/OPEIU secret ballot vote
along with the ensuing publicity that put
the icing on the cake. The 94.4% vote to
affiliate was a landslide, making it impossible
for the company to ignore.
The fact is that the company cannot
afford to lose more agents or more
customers. Unfortunately, it may be too
late to reverse the outflow. By and large,
the agency force has lost faith and trust
in Allstate. In all likelihood, even those
agents who plan to continue their Allstate
career will forever remain suspicious
of management at every level.
The point here is that leadership
didn’t suddenly have a “let’s be good
to our agents” epiphany. Exclusivefocus
readers remember that it wasn’t long
ago that the company bullied the agency
force into submission with threats of
termination and other abusive behavior.
Aside from Joe Lacher, the management
team responsible for company’s darkest
days remains firmly in place. Agency
owners would be wise to remember the
lessons learned in 2011. Believe me, the
tiger’s stripes have not changed. Once a
state of normalcy returns, the tiger will
again stalk its prey and pounce at will.
For the first time in history, Allstate
agents are in the driver’s seat. Now is not
the time to compromise on the compensation
issue, it is time to seek parity with
our independent agent brethren who
hold Allstate contracts paying 15/15. Ef
32 — Exclusivefocus Winter 2011/2012