I’ve had great mentors from multiple industries.
Each one taught me things from outside of my echo chamber.
Today I’ll share 5 things with you that have nothing to do with insurance and everything to do with growing a business.
I hope they help you.
1. Do Important Stuff.
Most agencies work fast to grow slowly. Really slowly.
(This is going to hurt.)
As Peter Drucker said, “The bottleneck is almost always at the top of the bottle.”
Maybe you already know this. Do you get frustrated because you’re buried in busy work and keep putting off important things?
Guess what will never free you from busy work? More busy work.
They way you get free is by time-boxing certain activities on your calendar that ALWAYS get done. Things like:
- high-quality 1:1s with your direct reports every 2 weeks
- regular meetings with customers from your ICP (ideal customer profile)
- giving your brain a break every couple of hours.
- learning new things and developing yourself
- fine-tuning your strategy
If you want to be fast a year from now, you have to get important stuff off the back burner starting now.
2. Compete With Yourself.
Most businesses focus on their competitors. That’s a bad strategy. Why?
First, if you try to copy what they’re already doing, the best you can hope for is second place.
Second, it means your business isn’t unique or special. You’re not differentiated.
Third, you don’t know enough about your competitors’ strengths and weaknesses. You only see the occasional cool new thing they do. That stuff is just a distraction.
If you compete with yourself, you can achieve a crushing victory every time:
- You have all the dirt on your own business. You know all the ways that you can be better.
- You have total control of decision-making and prioritization.
- Plus, you can tailor all of your improvements based on customer feedback instead of on what the other guys are doing.
If you compete with yourself, you can make sure that next-year you is way better than this-year you. And you can do that every year.
Bonus: You’ll know you’re doing it right when your competitors start trying to copy what you’re doing and coming in second.
3. Leverage Talent.
For the amount of time insurance agents spend trying to acquire and train talent, it’s amazing that they see it as a labor cost to be controlled.
Talent is your most valuable asset. It’s to be leveraged.
Once you’ve hired good people, your job changes. You have to stop being an individual contributor and become a force multiplier. What if you can earn a 2X return on your investment in talent? 5X? 10X?
You can’t get that kind of return anywhere else. Stop hiring labor and start recruiting and leveraging talent. And stop being the star of your agency. Make everybody the star.
4. Know Where The Money Comes From.
Many agencies could double their money if they just stopped to analyze how they make it in the first place. Instead, they just keep doing what they know. Their dollars/effort ratio is WAY too low.
There are easily dozens of examples. Here are 4 random ones:
Commissions. Say you go from an 8% commission to a 10% commission. Some people consider that a 2% pay increase. But it’s not. It’s a 25% pay increase. It means every dollar you used to make is now a buck and a quarter.
Net gain: 25%.
Customer Lifetime Value. Suppose a customer has $2000 of annual premium for 4 years. That’s $8,000. Your commission is 10%, or $800. Say your acquisition cost is $300. That leaves you with $500 of profit. But if you keep the customer for one more year, you net $700.
Net gain: 45%
(If you do that at scale and average 20-year retention on an $3000 of annual premium, you’re talking about millions of additional CLV dollars!)
Reevaluating Leads: Suppose your sales rep works 100 new leads and wins 10 new customers. 6 of the 10 were from her first round of calls. So after round 1, you toss all the leads and buy her 100 more new ones.
Net gain: 20%.
Paying More. Suppose you hire a customer service person for $15. She works full-time for 4 months, gets fully trained, and leaves to make $17 at Chick-Fil-A. You spent $13K on her total payroll and $10K worth of your time training her.
Total Cost: $23K. Total Value Produced: $0.
So you hire a replacement. He does the same thing. Same results.
The third time you hire for $17 and get someone who sticks and produces value after 4 months.
Total cost for 1 year = $69K, or $33/hour. Total Value Produced: $0.
Instead, suppose you paid the first person $17, and they stayed. Your total cost for the year would have been $58K, or $28/hour, and you would have enjoyed 8 months of value production.
Net gain: 15% cost savings plus 8 months of value production.
Agents get so used to doing what they know that they leave insane amounts of money on the table. Don’t leave money on the table.
5. Run Experiments Continuously.
Nobody knows exactly how to grow your business. Your business is a unique blend of employees and customers with a mix of demographics, psychographics, market forces, etc. And you’re unique. And you’re changing over time.
The better you align with all of those factors, the closer you get to amazing business success.
So focus less on implementing “best practices” and forget about looking for secret success formulas.
Instead, run lots of small experiments. All the time. Forever.
Every time a small experiment succeeds, you get better. When they fail, you also get better, because you learned what not to do.
Most experiments produce tiny, incremental gains. Some have noteworthy yields. A few are transformational.
And almost all experiments shed light on what the next experiments ought to be.
You’ve probably seen this cliche about compounding improvements:
1 ^ 365 = 1
(1 + .01) ^ 365 = 37.78
Small, consistent experiments compound and lead to massive returns over time.