Introduction:

TIPs Financial Services was founded as an insurance company in 1930, based in Chicago,
Illinois. They primarily served farm families in the MidWest. TIPs has expanded business to 17
states. 80% of the business comes from the MidWest. Its financial products include home and
property insurance, business insurance, 401K plans, stock and mutual funds, long-term care
insurance, annuities and financial planning and trust services. TIP is an acronym for Trust,
Integrity and performance. TIP aims at providing financial services through qualified consultants
in small towns. TIPs financial consultants are well-trained, professional and provide an extra
ordinary level of service. The top priority of TIPs financial consultants is to make string
relationships with customers and understand their needs deeply, that is why every consultant is
trained to learn about their customers needs and goals before identifying potential prospects to
help them meet their objectives.
Qualitative Analysis:
1. Don is a graduate of Iowa University with a finance degree.
2. TIP Financial Services in based in Chicago.
3. TIP financial service product offering includes home and property insurance, business
insurance, 401K plans, stocks and mutual funds, long-term care insurance, annuities and
financial planning and trust services.
4. TIP Financial services is a founding member of Insurance Marketplace Standards
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(IMSA).
Due to high turnover, Don spent most of his time in 2nd year to train new employees.
During the 3rd year, sales of the district were flat.
During the 4th year, Dons district ranked lowest in the realized first quarter sales results.
Bruce Bowens company were taking personal insurance and annuities from TIP

Financial services. 150 employees were also TIP customers for 401K services.
9. Through market research, Dan discovered that most of his clientele are baby boomers
(age 40 to 70). 40% of his clientele were also women.
Quantitative Analysis:
1. TIP financial services found in 1930 as an insurance company.

2. TIP Financial services now operate in 17 states, but 80% of its business comes from
Midwest.
3. The firm manages $20 billion of assets through 4500 independent contractor agents.
4. Don controls a team of 50 financial consultants out of which 47 are men and 3 are
women.
5. 80-20 rule applies in Dons team with 80% of the business closed by 20% of the
workforce.
6. In the second year of Dons work, 20 members of his team have left due to lack of selling
success.
7. During the 3rd year, 15 more financial consultants left Dons team.
8. As per guidelines, financial consultants are expected to make 100 phone calls a day with
20 personal visits in a week.
9. Some successful financial consultants in Iowa made $250,000 a year, equitant to Dans
compensation.
Problems:
1. The dynamics of financial industry were changing. Because of the internet availability
many newly formed financial companies were able to offer cut-rate fees. TIP Financial
service did not change their business model. Now people did not need to wait for a
consultant to pay them a visit rather they would gather information through internet and
make transactions anywhere in just a few seconds. Transaction fees in this industry was
shrinking. TIPs was not able to cut on overhead costs because of the old business model.
2. Dons subordinates were not motivated to work hard and put in long hours. Most of the
sales reps were giving just 30 to 35 hours however Don used to give 50 to 60 hours per
week. Sales reps were not bringing in new business rather they just wanted to get by
dealing with the existing customers. This job required much dedication because financial
consultants were expected to make 100 phone calls and conduct 15 to 20 personal visits
to existing customers or new prospects each week. These visits were expected to take
place between 4 to 9 pm after potential clients have reached home but sales rep were not
putting effort to meet new people.
3. The high turnover was a major problem in TIP Financial service. New consultants
required rigorous training so that they learn about existing customers and understand their
needs so it was hard to get new people into the territory. New consultants were expected
to attract new clients but new hires were not willing to put in long hours. Turnover issue

was taking Dons a lot of time. 60% of the time was spent in hiring new people and then
training new consultants. 40 percent of the time was spent in conducting performance
appraisals, filling out travel expense forms, corresponding with TIPs corporate office and
helping his consultants with their field problems. Very little time was spent with his
experienced consultants and customers who represented the major part of his business.
Core Problem:

The main problem with TIP was high turnover because recruiting new people every now
and then was costing TIPs a lot. Also, the training costs were high and the people usually
hired were not the perfect fit the company because they were not motivated. Most of the
people left themselves and those who did not, Don had to fire them anyways because they
were not putting enough effort in expanding their client base.

Recommendations:
1. Creating a profile for the perfect financial consultant
2. This consultant should possess a number of qualities, namely he/she should be selfmotivated, knowledgeable regarding financial products, at least possess an undergraduate
degree, be mature, have strong local ties with the local community, be service focused,
resilient, ethical, trustworthy and financially motivated.
3. Next a partnership should be built between experienced and successful financial
consultants with new and inexperienced financial consultants. These seniors can act as
mentors and guides for the new consultants, also helping to effectively tackle the problem
that young consultants face when dealing with baby boomers.
4. They need to hire more mature individuals, especially women in order to deal with the
issue of baby boomers. More mature people will connect better with the baby boomers
segment at least.
5. Don Kramer, should spend more time in the field. He should take help in regards to the
recruiting process. He needs to spend more face time with customers, as they bring in the
bulk of the business.
6. The company also needs to find ways to motivate their salespeople to work hard. They
should be offered better compensation packages, as normally they would stop working

hard after reaching a certain pay level. A better compensation package along with the
provision of perks should keep them motivated enough to keep working hard.