So many agents are asking the question: “How do I get more customers?”
They’ve bought leads, sponsored community events, and tinkered with social media.
But nothing seems to be the silver bullet.
Focusing on “How do I get more customers?” is a trap. It’s a short-term, tactical prison that will slow and eventually cap your growth.
Not because you don’t need new customers. Of course you do.
But living in service of that question will prevent you from experiencing profound growth.
What Kind of Customers?
When I hear that question from any business owner, my knee-jerk reply is, “What kind of customers are you looking for?”
The answer is essentially, “Don’t care. Just need more customers.”
So that’s where things start to go sideways.
Case Study: Unprofitable Customers
I once did a brutally detailed analysis of an agent’s profitability by customer segment. It went like this:
- Break the book into 4 segments by total annual premium.
- Subtract the average Customer Acquisition Cost and the average customer’s share of fixed expenses. (That’s ARR–Annually Recurring Revenue.)
- Multiply ARR times years of retention to get Customer Lifetime Value (CLV).
The result was shocking. The bottom 50% of his customers combined produced negative ARR and CLV based on projected years of retention.
I just said NEGATIVE ARR and CLV! For half of his customers!
That’s fine if there’s a plan to upgrade those customers’ relationships and portfolios. But if you’re just going to lose them in a few years over a small price difference, you end up losing money on a lot of your prized sales. (Salesperson gets paid; you don’t.)
Ideal Customer Profile and Niche
So I propose that any small business owner do this instead:
- Define their Ideal Customer Profiles (ICPs)
- Invest in learning how to acquire and retain them.
But that’s not a quick, obvious solution, so they tune out.
Pinpointing your ICPs and reimagining your business around it requires Long-Term Focus. It might take a year or two before you get it right and start to see results.
If you want some new customers right now, and if you’ll take whatever you can get, that’s Short-Term Focus.
Short-term focus doesn’t ever transform into long-term focus.
(It’s much like employees who do career maintenance every time they lose a job and have 45 days before they can’t pay their bills. They take whatever they can get and blow 2-3 more years at the wrong job.)
An ICP is a customer with a problem you can solve. And you’ve solved it a bunch of times, so you’re an expert at explaining and solving it.
But the problem can’t be, “You might be paying too much for your auto insurance.”
Nor can it be, “Let’s talk about your life insurance needs.”
It’s more like, “You’re in your late 40s. It’s time to shift your focus from your income to your wealth. Everyone in your career stage seems to make the same 3-5 mistakes, so their money isn’t going to help them amass and protect assets, and they’re going to regret it. Let me tell you a story about how we figured this out and fixed it for a couple in their late 40s.”
Compare that to, “Would you like a competitive quote on your auto policy?”
There are hundreds of examples of an ICP with a problem that you can specialize in. And once you do, you practically stop competing. You don’t have to take what you can get.
You can niche down and become the king or queen of your ICP.
Long-Term Thinking Is Hard
But developing your business around solving important problems for your ICP is mentally rigorous and takes a long time. It’s deferred gratification. Once it takes hold, your growth and profitability will be like nothing you ever imagined, but until then, it’s a leap of faith.
So lots of people just keep searching for that secret trove of perfect prospects.
News flash: there are half a million agents and brokers looking for that trove.
Ultimately, the problem with short-term thinking is that it never ends. If you wait for your short-term thinking to pay off so you can start thinking long-term, it won’t happen.
Long-term thinking is the antidote to perpetual short-termism.
It takes imagination, humility, consistency, and continuous improvement.
That’s what transformation always looks like.
What Is The Long-Term Vision?
As a small business owner, the vision you’re pursuing is not any of these:
- More customers
- Hitting quarterly quota
- Exceeding annual goals
Instead, it looks like this:
- Maximizing annual premium
- Maximizing the number of years, you earn that premium
Those are your Y and X axes, respectively. When you multiply them, you find out how much money you’re going to make over the life of your business.
Some of the components of the formula for high ARR and CLV growth are:
- A clear vision, strategy, and culture
- Highly-leveraged talent
- More of the right customers with very low attrition
- Laser focus
- Great profit margins and generous reinvestment in the business
The question “How do I get more customers?” is a major distraction from that kind of thinking.
A better question is, “How do I get out of the hamster wheel?”
Or, more directly, “How do I transform myself into a long-term, strategic thinker?”