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Tipping an insurance agent?

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What if producers got tips instead of commissions?

This is just one of the interesting concepts brought up in a new book, “Flirting with the Uninterested,” by Maria Ferrante-Schepis and Maddock Douglas founder Mike Maddock. Ferrante-Schepis is managing principal of insurance and financial services at Maddock Douglas and Life Insurance Selling’s newest monthly columnist, .

Beforedismissing the idea as outlandish, think for a minute about the reasoning behind the concept. Many would-be producers shy away from the industry because they don’t want to starve on commission while building their business. This could be a way to circumvent that problem. In the workbook section at the end of the book, the case is made (admittedly in much more detail) roughly in this manner:

“In today’s model, producers are expected to work on commission from the get-go. In this new model, perhaps they could receive a small salary and have an initial upside in tips.”

In today’s society, people often make tipping decisions based on “social norms.” As the book says, “How many times have you gone into a restaurant and tipped someone who you thought just gave you average service? Maybe even below average? Why do you do that? Because it is the ‘norm.’”

The book also points out how paying for a cab ride with a credit card through an automated system in the cab now presents you with automatically calculated “suggested” tips of 15, 20, 25 or even 30 percent! “People, as a rule, will do the socially correct thing. So, do you really think they would stiff the insurance agent if they knew he was working for tips?”

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If agents worked for tips, would the industry be able to price products differently? Certainly. Consumers would be made aware that agents were not earning commission on the sale of policies. As a result, they would be paying less for coverage — or at least no more after they tipped the agent. Agents would be compensated differently with small salaries supplementing the tips, and it might be easier to attract new blood to the industry.

“Tips, you may say, are unpredictable, but not if you have a steady flow of people you are serving,” the book says, and goes on explaining potential ways this type of system could be implemented.

“The point is,” the authors say, “imagine our industry if it was being invented today and did not exist before. How would you do things? If you don’t change our existing model, you can bet someone from the outside will.”

Of course, many of the wide-ranging and somewhat unorthodox concepts in this book may never come to fruition, but some of them just might. And it will get you thinking about possibilities.

In the interest of full disclosure, I did write the foreward for this book after reviewing an advance copy. I will send a free copy of “Flirting with the Uninterested” to the first five people who email me ([email protected]) requesting one and providing a mailing address. Interested readers can also get the book through Amazon starting Monday, Jan. 14.