Having met thousands of agents and heard hundreds of them talk about their businesses, I’ve realized that they’re distributed just like every other industry.
Some are truly incredible.
A few are awful and don’t last.
Most are interchangeable.
I can’t think of anything worse than spending decades being interchangeable.
Here’s what it looks like, how it happens, and how to liberate yourself if you’re stuck there.
Matt, What Do You Mean, “Interchangeable?”
I mean that from the outside you look more or less like everyone else.
Sure, you know what makes you special. But do your employees feel it? Your customers?
This is pure, bottom-line logic: your differences have to matter more than price, or nobody will care.
“We offer good customer service” isn’t enough.
People assume that if they go for a better deal, the service will still be adequate. Are they wrong? Maybe. But they have to leave to find out. That’s bad.
For employees, “We offer a competitive wage” isn’t enough.
Employees can get a competitive wage anywhere. If that’s your magnet for attracting candidates, you’re already an interchangeable employer.
What Makes An Agency Interchangeable?
Being like everyone else is easy and feels safe.
But it doesn’t feel like aggressive, sustainable growth.
Here are some examples of what might make you feel interchangeable to customers.
Focusing on P&C exclusively
If your business starts and ends with products people are obliged to buy, you’re limiting your ability to differentiate yourself. Most people don’t see purchasing homeowners insurance or auto insurance as complex or requiring expertise.
Just a product and a price.
Obsessing over your competition
If you base your business initiatives on what your competitors are doing, you’ll look like a slightly-less-compelling version of them. You’ll be completely interchangeable, except you won’t be the first choice among interchangeable agencies.
To paraphrase Seth Godin, the only thing worse than coming in first in a race to the bottom is coming in second.
If you focus on transactions over relationships, it’s an instant signal that there’s nothing special about you. Maybe you’re more efficient, consistent, or skilled at the transactions, but many customers will only experience that once and forget it.
If customers (and employees) feel like they’re just numbers in your quota, they’ll realize that you’re just like everyone else.
Competing on price
When your core prospecting tactic is to beat the competition on price, you signal that you’re just like them, only cheaper.
That reputation is almost impossible to change in the near term.
Copying everyone else
If you’re always trolling agent gatherings looking for new tactics, tricks, or gimmicks, you are, by definition, making yourself indistinguishable from them. You’re explicitly trying to be like everyone else.
How to Stop Being Interchangeable.
Ok, but we’re all guilty of most of those sins at some level. So how do we start differentiating ourselves and becoming indispensable?
Have a vision and a strategy
Here’s a winning approach:
- Define where you’re trying to go as a business and what makes it special or unique.
- Figure out a long-term strategy to get there by doing things others aren’t doing.
- Align all your tactics and effort with that vision and strategy.
In a few years, you’ll stand out to a segment of the market. And remember, “different is better than better.”
Develop an amazing culture
Stop focusing on hiring labor. Focus on attracting and retaining great talent.
Decide to be the best agency to work for. Here are a few key ways:
- In your recruiting efforts, lead with your vision and strategy. Only hire people who can get on board with that purpose. And make sure you can articulate what’s in it for them.
- Pay better than your competition. Take money off the table. It’s WAY less expensive than employee churn. (Don’t believe me? Invite me to your next study group meeting, and we’ll do the math.)
- Make your employees’ lives your first priority. Then watch them make your customers their first priority.
Define your Ideal Customer Profile (ICP) and niche down hard
Did you know that the bottom half of your customers probably provide 5-10% of your profit? And that you spend most of your time chasing and servicing them?
What if you focus most of your effort on the 20% of your customers that provide most of your profit? After a few years, what would your business look like? After a decade?
Years and decades come and go regardless…
Develop customer loyalty
Nothing will reward you with as much money and fulfillment as a book full of customers who will never leave you.
You’ll know their stories, their families, and their challenges. You’ll help solve some of their biggest problems. You’ll be more than a source for insurance products.
And they’ll reward you for decades with all of their business and with high Annually Recurring Revenue.
If your agency doesn’t have a calendar full of customer appointments, that’s the fastest, easiest way to start building customer loyalty.
Focus on high-leverage activities
Some people put in one unit of effort to produce less than one unit of value.
Others have a 1:1 ratio of effort input to value output.
Warren Buffet’s ratio is something like 1:1,000,000,000
1:2 is a great place to start. Then work toward 1:10.
If you’re doing the same tasks that you were doing 5 years ago, it’s time to level yourself up so you can level your business up.
Being “interchangeable” in your market will yield interchangeable results for you.
Find out what you’re doing that’s making you interchangeable.
Replace it with things that make you differentiated and sought after by your ideal customers.
Then see if you aren’t richer in all the ways that matter…