October 30, 2018 by Jason Contant
Brokers in favour of performance-based compensation point to its benefits in promoting customer service to clients.
At Surex Direct, a Magrath, Alta.-based online brokerage that is 100% commission-based, customer service is key, said Ryan Kirk, vice president of operations for eastern Canada.
“The customer service level is much higher because you’re 100% invested in keeping that client and you’ll do what you can,” Kirk said Monday. “You need to go above and beyond to show them why, even if there is a better price out there, my service is better than anything else because you’re getting value for what you’re paying for.”
Also, with performance-based compensation, there is no correlation between one broker’s success and another’s failure, Kirk said.
“In insurance, we have enough leads that get fed to us that one person’s gain isn’t another person’s loss,” he said. “We are getting fed hundreds of leads a day, so we’ve got more than enough people that we can reach out to. People don’t feel threatened when [other brokers] are successful.”
It can be difficult, however, to find candidates that are comfortable with a 100% commission-based model, Kirk acknowledged.
“A lot of people are afraid to take this job on a commission-based scale because they don’t like that there’s no security for benefits,” he said, adding that brokers are not hired as employees, but as independent contractors. “But then you have other people who look at it the other way. They’re like, ‘Actually, in my third year, I’ll have enough to pay for my own benefits and still be making more than I would if I working at another brokerage.’ A lot of people come to us because they… don’t feel like they’re being paid what they’re worth at their current brokerage.”
When applying Surex’s model, “you need brokers who are driven” and don’t work a typical 9-to-5 day. “We’re an online brokerage. We don’t have a door that says we are open and we are closed,” Kirk said. “Our brokers make themselves available at 8 or 9 o’clock at night or on weekends, when people are requesting quotes. They know that if I can reach them now, when no other brokerage will, I can possibly get the sale and earn more of my commissions. It really puts it in their hands to create their own success.”