Nixon and Lindstrom invests in people

Nixon & Lindstrom Insurance has defied the norm. In an industry where traditionally nine out of 10 salespeople hired don't work out, partner Luke Nixon said, the company is attracting people who stay.

Insurance agencies are having trouble finding qualified people in a time when few universities offer any type of an insurance degree. Southwest Missouri State University is one of about 20 universities across the nation that offer an insurance major, Nixon said.

Statistics Nixon heard last year astounded him. They showed that seven years ago there were approximately 70,000 independent insurance agencies doing business in the United States. In the last seven years, that number has fallen to around 35,000, he said. In the next seven years the number is expected to drop below 18,000. That deepened Nixon's confidence that a decision he made a few years back was a good one.

Investing in people

A corporate initiative launched eight years ago has brought 14 new salespeople on board at Nixon & Lindstrom, and 11 of them are still with the company. "Where the industry average says that you've got to hire 10 to get one good one, in other words there's about a 90 percent dropout rate of salespeople, we were keeping over 90 percent of them," Nixon said.

The secret to the agency's success in retaining staff is "time and attention and just flat hard work," Nixon said.

Independent insurance agencies, he said, were hiring people but not devoting a lot of time and attention to them because they knew that the retention rate was low. "That became a self-fulfilling prophecy," Nixon said, "because if you believe that only one out of 10 are going to work, I can assure you one thing: That's what's going to happen."

Nixon & Lindstrom took a different approach and decided to give new salespeople "tremendous amounts of very intensive personal attention for their first year."

The company also began spending large amounts of money on their employees for education. This year alone $18,000 has been set aside for education.

"That's big for a company that has 29 employees," Nixon said. "But it's a commitment that we made and decided that we're going to pay them well. We're going to work with them and we're just flat not going to give up, and I think we choose our people well."

Hiring the right people

What Nixon looks for in an employee, he said, is maturity and long-range vision someone who knows what they want. He's had success in hiring people from the hospitality industry since they're used to working long hours, weekends and holidays. He's found that he doesn't have to worry whether or not they'll be at work at 8 am and stay until 5 pm.

Surprisingly, he prefers to hire someone with little or no experience in the insurance industry. "I like to train them my way so if they have any bad habits, they got them from me," he said.

Nixon knows well what it's like to be a successful salesperson. At the time he decided to devote a lot of his time and attention to developing successful salespeople, he "was selling insurance at an astonishing rate," said Nixon & Lindstrom partner Roger Lindstrom.

Lindstrom was reluctant to have Nixon go from active selling to developing new salespeople.

"I thought it was ridiculous to take someone that has his potential to all of a sudden take himself out of selling to hire new people," Lindstrom said, "but in retrospect he made the wisest, most visionary decision that anyone could ever have made." The agency has nearly quadrupled in size in the last eight years.

While maintaining his own book of business and attending to his own matters, Lindstrom said, Nixon went on every sales call with every producer for the first year in business "which is something that's almost unheard of ... He wanted to show them how to do it on relatively mid-to large-size accounts so they would develop an acumen and a comfort level calling on good-sized accounts."

And it has worked. Business is very good, Nixon said. "We have invested in the last eight years very heavily in our personnel and in our internal system," including everything from automation to facilities the hardware of the business, he said.

The payoff

The company has doubled in size in the last four years and continues growing at a rate of about 30 percent a year. Nixon & Lindstrom will end this year with about $23 million in annual premium sales.

"That puts us in the Springfield marketplace, from a market share standpoint, probably number two or number three," Nixon said.

Not bad for a company started in 1955 by Jerry Nixon (Luke Nixon's father) in his garage. Then, the company was called Jerry Nixon Insurance Inc. It conducted business under several names including Nixon Ship & Roderick, Nixon & Roderick and Nixon & Company. The name changed to Nixon & Lindstrom in 1985 when Roger Lindstrom joined the firm.

The company experienced huge growth spurts in the late 1980s and late l990s, Nixon said, and continues to grow. In fact, Nixon & Lindstrom, which has been at 1444 E. Sunshine for four years, is experiencing growing pains. The company plans to either expand its current space or move to a larger facility by the end of 2004, Nixon said.

Things have changed in the insurance industry since Jerry Nixon started the company 48 years ago, Nixon said. "The days of the same agent handling your business insurance that also handles your homeowner's and auto and also handles your family's health insurance and life insurance are pretty much over," he said. "The different aspects of the industry have become so complicated that you really can no longer be everything to everyone, so you have to specialize."

Nixon & Lindstrom specializes in business insurance, which makes up 90 percent of its offerings, and comprises four departments: property/casualty, group health programs, personal lines, and life, health and long-term care for individuals.

Nixon said as the company continues to grow it plans to continue to hire new people. The firm added a new salesperson and a new staff person shortly after the first of the year.

And he's confident they'll succeed as others hired at the company have succeeded.

"I think our investments in education and training have really paid off," he said, "and that we have a group of very professional, well-educated in their industry, confident and competent people here that, quite frankly, are very effective at what they do."