The Adaptive Agency Blog

Two Ways To Grow: How Much Do You Want To Work For Each Dollar?

by | Sep 12, 2023 | Profitability

Dave Christy’s event in Dallas last week was amazing. If he has another one, don’t miss it.

Of course, Dave’s an excellent human and a mega-successful agent with an impressive network that he shared with attendees. The sessions were great and the venue was incredible.

But what I also noticed was the typical mindset of the 400+ agents in attendance.

They work hard, but first they work smart.

I consult with a lot of agents about growth, and I find that everyone fits into two growth mindsets:

  1. Apply more effort.
  2. Apply more strategy.

The difference between these two models comes down a simple idea:

”I want to make more dollars for the same effort.”

Do you default toward working harder or working smarter? Working harder for each dollar is natural for a new business. But if it becomes permanent, you’ll never escape the hamster wheel.

I’ll contrast the two models so you can consider which one you’re aiming for.


Target Market

The target market for an effort-driven agency is disloyal bargain hunters.

That’s a high-attrition customer segment. It has to be replaced more often. More effort for the same revenue. More work for each dollar.

For example, a single-line auto policyholder generating $150/year in commissions for 5 years yields $750. Subtract a $250 CAC (Customer Acquisition Cost), and it’s $500.

By contrast, a customer averaging 3 policies for $400/year in commissions for 20 years is $7750 after CAC.

It’s 14 times more work for the single-line example to produce the same dollars.

By contrast, the target market for a strategy-driven agency is loyal customers who appreciate value.

Obviously, that’s way less work per dollar earned.

And it reduces acquisition costs since (a) you’re not re-spending marketing dollars and (b) you tend to get more referrals.

Plus, these customers make your employees happier, which has a “tide that raises all ships” effect on the rest of your customer engagement.

So the focus of a strategy-driven agency is attracting and cultivating loyal customers, not churning through disloyal bargain hunters.


Demand Capture Vs. Demand Generation

Effort-driven agencies focus on the disloyal, bargain-hunting target market. That implies they’re doing demand capture. They talk to as many people as possible, hoping to find those already in a shopping/buying mode. In essence, these are the steps:

  1. Show up to the disloyal bargain hunger market every day.
  2. Grind leads looking for people in a buying mood.
  3. Close a deal and move on to the next lead.

However, strategy-driven agencies focus on generating demand. That means emphasizing activities such as:

  1. Consistently working with existing customers to get more of their business for more years.
  2. Spending time in the community bolstering the brand.
  3. Continuously improving all aspects of the customer experience.
  4. Using trust as their default currency.

These activities have poor short-term attribution, but they raise the agency’s baseline over the long-term, which is why only strategic agents engage in them consistently.



Effort-driven agencies treat all revenue as good revenue, even when there’s no profit. That’s why they’ll spend a fortune on short-lived, transactional business.

Strategy-driven agencies understand profitability. They want some of their revenue to go to their pockets and to reinvestment in the business.

So, they focus on activities that preserve more revenue for the bottom line:

  1. Finding the right customer niche.
  2. Maximizing customer retention and recurring revenue.
  3. Optimizing their product portfolio.
  4. Avoiding the high cost of cheap labor.
  5. Making high-leverage investments in their personal capabilities and their team’s capabilities.
  6. Eliminating activity that doesn’t compound over time.


Understanding How They Make Money

One of the most noteworthy differences between the two agency types is how they view their comp plans.

Effort-driven agencies generally feel that it’s too much work to understand the comp plan. Then they pursue low-complexity, high-effort sales activities.

Strategy-driven agencies generally feel that it’s too much work NOT to understand the comp plan. They’re able to apply their efforts in ways that maximize their commission percentages AND maximize their multipliers.

In fact, this was a clear delineator at Dave’s event.

The agents there, if nothing else, know how they get paid, and they maximize it. (Of course, it’s not just about getting paid. That crowd loves what they do and treat it like a calling, not a job. But the comp plan rewards doing right by customers, and these agents understand that.)