Episode 11: Seth Preus on Productivity, Motivation and Gamification

So the way that we implement gamification is that we look at those intrinsic motivators that make people enjoy playing sports, even if they don't get paid, or any kind of game for that matter. What is it that makes people want to play tennis if they can't make money? And so we take those intrinsic motivators and carry them over into the business world. Welcome to the Club Capital Leadership Podcast, where you will learn to grow your business, grow your leadership, and grow and develop your team. And now tune in to another great episode brought to you by your hosts, Bradley Hamner and Chris Ferretti.

On today's episode of the Club Capital Leadership Podcast is Seth Preuss. Seth is the founder and creator of Racing Snail and Myvation, which is a productivity management software company targeting insurance tech. At the age of 19, Seth began his professional journey selling Kirby vacuum cleaners door-to-door, you know, when that was actually a thing. This began a lifelong obsession with sales productivity and the mysteries of motivation. We actually spent a lot of time talking about intrinsic and extrinsic motivators, and I think our listeners are going to get a ton out of that. In 2005, he created RacingStand, which is an insurance-focused productivity and compensation tool that honestly a lot of our listeners probably use. Themselves. And then he also created Leaderboard Legends, which has actually been featured on Forbes.com. That motivational framework leverages intrinsic motivation to drive greater engagement and superior results. Today, he actually does a lot of speaking and workshops and presentations to help people change the equation from how can I get my team to perform to how can I get my team to want to perform. I took a lot of notes in this podcast with Seth today. Chris, what are a couple of things that you picked up from him?

The two things that I walked away with were comp plans and gamification. Gamification. Regarding comp plans, he talks about what are some best practices that you can start implementing today and what's something that you can do, very minor, that can actually increase the productivity of your agency by up to 40%. And then gamification, so what gamification is and how you can implement it to make your agency more productive. I'm super excited about our listeners getting a ton of value out of this. So without further ado, let's get into it.

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Bradley, thank you very much for having me here today. I'm really looking forward to talking with you.

I'm really looking forward to it as well. We've got so much that we want to be able to cover today. And before we start talking about your companies, and we're going to cover motivation and productivity and gamification, I always find it interesting to go back and dig into the background of our guests and where you're from and how you got started on your journey. And, you know, looking at where you got started at age 19, you started selling Kirby vacuum cleaners door-to-door. And so can you just take us back to that time and bring us along your journey about how you got to where you are today?

Sure. My next door neighbor, when I lived in Colorado Springs, was a Kirby vacuum cleaner salesman. And so when I was in, I think it was, I guess it was before I went to college, my freshman year, he asked me if I wanted to go and make some real money selling Kirbys with him. And so I accepted because at that age I was far too stupid to realize what a horrible job that is. And so I just did it. I was thrown into it and did a great job at it. So, we worked in rural Colorado and mostly in rural northern New Mexico, going door-to-door, about as fundamental as you can possibly get in sales. If my dad had known what those guys were actually taking me out to do, there's no way he would have let me have that job because it was overnight. And so, we would stay in hotels, et cetera, because we were so far away from home. And they would often take me to the dog track and either send me out to work while they gambled or sit there and watch them gamble. And that was probably some of the lesser of the shenanigans that they involved me in. But it was a wonderful experience because I learned, first of all, the fundamentals of sales, that it takes a certain equation of leading into activities. In the case of me, it was knocking on doors to people, doing presentations in order to get to sales. And it also laid the foundation for much of my understanding about motivation, which often runs contrary to the prevailing wisdom that you hear from some of your biggest motivational speakers in the industry. And to summarize that real briefly, I don't believe that motivation is a mindset. I think that it's much more based on the actions that you take and that trying to trick yourself into believing that everything is okay and that you're a positive person so that you'll eventually have good things to happen to you is a fruitless exercise because I was selling Kirby vacuum cleaners as a teenager and then into my 20s. I realized that I didn't like that job. I was miserable and trying to trick myself into believing that I liked it was not a productive way for me to get ahead. So, that's how I got started. I actually, believe it or not, quit college with a 4.0 average and a full scholarship to sell vacuum cleaners because I was swayed and tempted by some of the lifestyle that I saw people in that business having, lots of money, et cetera. But then, I came back to my senses after a couple of years and finished up college at Xavier University in Cincinnati.

Quick question, what'd you actually end up studying?

So I studied business management. I initially wanted to do entrepreneurial studies, but I realized after my adventure selling Kirby's that I knew as much about entrepreneurial studies as most of the faculty at the school.

And then regarding motivation, you know, like what made you focus on that specifically? Just because of the fact that when you and I, Bradley, spoke on the phone prior to jumping on a podcast, You had brought up motivation specifically, and I would say that that's a very important aspect of sales, but if you could elaborate more on your thoughts on it, like for example, you mentioned intrinsic motivators versus extrinsic motivators. If you could just give us your philosophy on that, that'll be great.

Sure. Yeah. So there's two types of motivators. They can be loosely grouped into two categories. So extrinsic are the motivations or motivators that most of us are familiar with, and they're what? Most businesses focus on, sometimes to the exclusion of anything else. And basically, it's usually money. It's those things that people give you in order to do something. If you don't get it, you won't do it. That's one of the easiest ways to understand it. They take away the extrinsic motivator and your reason for doing that activity leaves very rapidly. An intrinsic motivator, on the other hand, is something that comes inside you and it connects you to the work. These are very often related to the kind of person that you want to be. And so these can be things that one that people would be the most familiar with would be having a sense of purpose, that the work that you're doing matters and is meaningful to other people. But it also includes things like mastery, that people like to be good at their job. They like to be getting better at their job. Progress, that they like to feel like they're on their way forward in their career, or even accountability, which sounds like a negative word that we use often, but accountability is saying, I'm reliable. You can count on me. This is how we build trust in the working world. And as I have progressed through my career, through different sales positions and working for, in technology, etc., I've realized that capitalizing on those intrinsic motivators is a far more stable and reliable way of keeping people happy and keeping good morale than it is to rely 100% on money as a motivator because the needs and the desires for money change so dramatically from one person to the next and from within that person's lifetime. And so much of what I've learned, especially over the past 14 years in developing productivity tools, is how to balance those two and use them in conjunction with each other to get somebody really fired up.

All right. So this is fascinating to me because you own a company that helps people to be able to track their sales and production and specifically money, and you're talking about how important that as an intrinsic motivator, but the most important, that's the most stable, are the intrinsic motivators. I mean, to me, that's fascinating that you've built a company that delivers one of those as an extrinsic motivator, but you value the intrinsic motivators.

Yeah, that's a really good point. It's funny that you say that because where I am right now, my understanding of this right now has evolved over a period of years. So, it's sometimes you understand things in the back of your mind, but you haven't grasped it in your consciousness yet. And this difference between intrinsic and extrinsic for me definitely fit in that category. So, I had an eye-opening experience several years ago where one of the products that we built is a very sophisticated compensation tool. And so, I think the last time they checked, they had 21,000 unique compensation plans running in the system at the same time. And so, yeah, so it's very dynamic. In the industry that we serve in, the insurance industry, if we couldn't do what you were looking for, you probably shouldn't be doing it. And we, we like to brag about that a lot. We can do this, we can do that. I mean, it's most flexible in the industry, blah, blah, blah. So we get asked a lot of times from people, okay, since you can do everything, what's the best way to do it? I definitely don't think that there is a best way because it depends upon a whole variety of factors, particularly based on the team that you have. But I thought it was worthwhile to say, hey, you know what, let's look, let's see if there's parts of the system that we can reliably say, hey, this is what you should be doing. And when we did that, what we discovered is that if you used some form of variable compensation at all, any kind, it didn't matter what you were doing, those agencies had production that's roughly 10% higher than a baseline who did not. If you had public goals, individual goals for your team members, so they were seeing the goals and everybody else was seeing the goals every day, their production was 12% greater than the baseline. Okay. So, we're not stacking here. These are independent. If they had team-based goals or a team-based compensation element is 18% higher than the baseline. And if you use daily activity goals, it was 30% higher than the baseline. So when I took a step back and looked at those numbers, I'm seeing the compensation portion of it, you know, the part that I brag about constantly, as being the least important part. And so that was not what I wanted to see at all. It wasn't what I expected. And I actually got mad and told the programmers, go back, you did it wrong, you clearly aren't Clearing the right fields, et cetera. Same results. We sliced it and diced it several ways, came up with same results. And so, this caused me to take a step back and say, "Okay, what the heck's going on here?" And so, when we looked at it, like we'll just take the first one up of the individual goals. So, individual goals are very much based on an intrinsic motivator of accountability. It's about doing what you say you're going to do. Somebody sets a goal and now they want to achieve it. It's highly motivating to them to achieve that. In fact, it's more motivating to them to achieve that than it is to make money, believe it or not. And so each of these other components were based on intrinsic motivators. So these were all in our system to various degrees, but it took a while to identify that that's what was going on. One of the ones that surprised me the most is that of all the ways that you can slice and dice agency performance, The agencies that have the biggest production by far all have a team-based component in their compensation structure. You know, a lot of times you see this stuff and I'm like, well, sure, yeah, you'd expect this or that. That one, it took me a while. And I really believe that this is based on, yet again, an intrinsic motivator, which is contribution, that people want to not just be part of a group, but they want to matter to the group. And when you introduce a team-based component into a compensation plan, Not only does it improve communication because they're checking in with each other to see what they're working on, etc., but it creates a high degree of accountability that you're going to help that team out. And so even reps that maybe don't care so much about the money, if you think about it, you may have reps working for you whose spouses make boatloads of money and they don't need the money. So you don't want to be dependent on just commissions if that's the situation, but you put them in a team and now their orientation has changed. It moves them from doing their job to doing their part. And so it was finding things like that where we realized that the way to get the best production was to hit on both of these things, which caused us to change how tools were built and to even create a new tool. Because the great conclusion to this analysis was that those agencies that used both extrinsic motivators like variable compensation and combined it with all those other elements of intrinsic motivation, their production was 43% greater than the baseline. So it was just massive.

I've got a lot of questions around this because this is fascinating. So there's insurance agency owners around the country from different companies listening to this, and they've had their different experiences with their own compensation plans. I mean, if they've been in business for some period of time, they've changed their compensation plans no telling how many times, which is common. And so can you go back over the findings and the percentage change? Because I thought that was really interesting. I think you said variable compensation was an increase in 10% public, et cetera. Can you go back over those? And I think it's also important to note, you're coming at it from a dataset that quite frankly, an individual insurance agency owner could not get themselves no matter how long they've been in business because you're running thousands, thousands of compensation plans through your system with thousands of team members.

Yeah, that's a very good point. I should have pointed that out, actually. This was based on 30,000 producers and stretching across thousands of agencies. So, it's pretty reliable. I mean, you're just definitely crossing over any kind of statistical requirements at that point. So, yes, I can summarize those again. From the baseline, so those are people who in our system just track the production to see what's going on. If you use any form of variable compensation, meaning you pay a commission of any sort, it's 10% greater. If you have public goals, individual goals, so you have goals set for each of your producers by either total policies, premium, whatever. Then that's about 12% difference from the baseline. Team-based goals or a team-based compensation component, like I just described, that's about 18%. But by far the biggest one, and this is— I love to, when I do presentations, I can often have one of these setups where people can answer trivia questions, etc., through an application. And I always love to ask of these things which one will have the least impact. People always pick daily activity plans. Daily activity plans blow the others all out of the water. If you're only gonna do one of them, you're gonna get far better results from using daily activity plans than you will from variable comp. Now you might have a tough time selling that to your staff. So I completely acknowledge that and I wouldn't recommend that somebody try to do that. But think about it, daily activity plans are ensuring that people are doing the business building activities that will ultimately result in sales. And so it's far too common for sales managers to look at those sales results We need more sales, we need more policies, we need more premium. This is the equivalent of a coach telling a team that they need to win more games. It is completely unproductive. But by managing the activities, it's similar to a coach running plays. By running and practicing plays, that's how you score points and that's how you win games. And so that's where you get that huge lift from the daily activities. And then once again, if you combine all of those things, on average those agencies have production that's 43% greater. And the baseline.

That's awesome. I think that the power of data to be able to drive decisions has become such a big thing in the insurance industry for the companies as a whole, but also down to the individual producers, and that's what you're talking about right here.

Exactly. It really is a rather simple element that has a huge impact on what people will do because by having the data available to them, it causes them to make decisions. So when somebody sees, for instance, that they're a couple of policies away from hitting the next threshold on their comp plan, they're more likely to take action on it. Many of the agents listening right now have either experienced or know agents who have experienced missing out on some kind of bonus or incentive trip by mere inches because they didn't know how close they were. So that's a story that I hear repeatedly. By providing real-time data on the things that matter to you and your agency, you cause— whether it's an agency manager or a sales rep or a service rep— to look at that data and make a decision. Am I okay with this number? And if they're not, they're much more likely to take action on that. And that action is going to be things like setting appointments, making phone calls, rerunning quotes, etc. It's a very simple concept, but it's one that we often lose track of.

I think the words keeping track are the operational words in this whole topic of basically making sure that you're making data-driven decisions when you decide to tell your employees to do, whether it's to make more outbound calls, to set more appointments, et cetera. It's super important. And it's something that I've always thought of, to be honest with you, regarding doing more of the behavior that will get you this higher result rather than thinking about this higher result and how much you want it, but not necessarily having a roadmap to get there. One of my favorite authors is Tim Ferriss, and he always talks about breaking down big goals into like micro steps that you can easily keep track of, number one. And number two, train what he calls a monkey to basically replicate. And by you keeping track of these tiny steps to actually close a client, in this case, it means making that client get insurance with you. By you keeping track of whether you are calling that client, whether you're setting appointments with that person, whether you're actually quoting that person, you're basically just giving yourself more at-bats and increasing the likelihood of you actually getting more sales and getting to your desired extrinsic motivator, which in this case would be money.

That's exactly right. When we first developed a daily activity tracker, I was a little bit nervous that it could be viewed as a micromanagement tool. And so I always test everything in my own agency first. And when I gave it to my office manager, I could tell there was a little bit of resistance there. It's like, "What are you doing? You don't trust me," et cetera. But she came to me after about a month and she said, "I wasn't sure about this thing at first, but I find that it keeps me focused on doing what I need to get done and I'm getting better sales numbers because of it." Part of the issue that we have in insurance is that it can be really easy to get sidetracked. We can lose track of what our real priorities are and start doing some of the service work or admin stuff that maybe isn't critical to be done at that point, but it does need to be done. And before you know it, the day has passed and you haven't completed those business building activities. So something as simple as having an activity tracker in front of you, I would tell them it's not an activity tracker, it's not a micromanager, it's a daily success plan. If you do this, you will be successful over the long haul.

A tool like this truly is necessary to keep yourself accountable. Like, forget about necessarily doing things for the business owner, for example. I think me as a team member, I could use this tool to simply become more successful, like you're saying, by simply being objective with myself and keeping track of the activities that I am doing. Am I actually bringing value to the agency? How am I doing it? And it could help you ask for more things, like a raise or whatever the case may be. It can help you simply be more data-driven when making any point with management.

Yeah, you just said something that we hear quite a bit, and I wanted to highlight that about knowing that you're doing a good job. So you don't necessarily make sales every day. In fact, in some insurance lines where they're dealing with big life cases, it may be a while between cases. So especially when you have your subproducers, especially when they're brand new and they're getting started in the business, if you set your goals, as you mentioned before, these micro goals as the leading indicator activities that ultimately lead to sales, it enables you to leave the office at the end of the day even if you haven't sold anything, knowing that you did your job. It's a really big deal because otherwise people can get discouraged and feel like they're not moving forward, they're stagnating. If you're continuing to lay the groundwork through those income-producing activities, you are moving forward. And tools like ours give that positive reinforcement that you're doing the right thing and that if you keep doing it, you're gonna start seeing those sales numbers.

I think that what you just said right there is really important because especially when you bring someone on new, it just takes some time whether it's insurance sales or any other type of sales, to be able to start seeing success, and if you use that in a football term, to start scoring touchdowns or winning games, it takes a lot of other things that you have to do on the front side. So, the team members can lose their patience. One thing I wanted to talk about, I mean, we're recording this podcast on Thursday, April 9th, and we're all right in the middle of the COVID-19 quarantine and shelter at home and working from home. So, everybody's getting accustomed to or trying to get accustomed to this work-from-home situation. How do you think what you were just talking about affects the situation of people working from home and that impact on motivation specifically?

Yeah, that's a great question. Interest in our product has gone through the roof, I can tell you that, since this happened. So, there's a concept that I talk about quite a bit called the visibility of work. And I am a work-from-home veteran. I've managed a remote sales team for over a decade. And so, I'm very familiar with some of the challenges of working remotely. From a manager's perspective, one is that you can't see anybody doing anything. And so, managers will freak out because it's like, how do I know that they're working at all? On the salesperson side, they don't know if the manager is paying attention to them. They don't see the manager working and they also don't see each other working. So, when you think about the psychology of going into an office, you see everybody sitting at their desk and on the phone, etc. We all make the deduction that they're working because they're at the office, they're in a cube, they're in front of their computer, etc. That goes away when you're working remotely. But here's the thing, is that those judgment calls that we make at the office to determine whether people are working or not are oftentimes completely superficial. Sitting at a desk doesn't mean you're working. Being on the phone doesn't mean that you're working. What this has done is it's forced businesses to take a step back and say, when I say what— that they're working, what do I mean by that? What is it that I want them to accomplish? So that's the first step that you have to take in a work-from-home environment is you need to think about what is it that should actually be happening that I know the work is getting done. It's not simply making phone calls. It could be quotes. It could be setting appointments. But if you are remote and you are seeing those activities being done, you know that the business is moving forward and that you're continuing to build. Well, that brings up the second part of this, which is that you have to see that somehow. So the only way that you can see that is through a system that tracks the information and displays it to everybody else. And so we have a couple of different tools that do that. We also have a gamification app that enables you to set up competitions between agencies, but either that one or the productivity tool, you're seeing the numbers update throughout the day. Your staff is seeing the numbers being updated from other team members, and they know that the boss, the agent, or the other team members are seeing their numbers go up as well. And so you continue that connection through this visibility of work. Does that make sense?

Yeah, 100% it does. I appreciate you talking about that. I think the part that really resonated with me is it really forces you to have to think about what are the outcomes that you really are optimizing for. What truly do I want and how do I define what work needs to be versus just activity for activity's sake?

Exactly. Yeah, that's totally true.

So I want to transition into productivity and I want to talk a little bit about compensation a little bit more. I think that a lot of insurance agents are trying to find that silver bullet compensation plan or that magic formula for increased production. Does it exist?

Not in the way that they're looking for when they ask that question. What they're looking for is they want you to tell them that you should have a certain minimum requirement for premium at this level. At 10% higher than that, then you increase their commissions by X percent, blah, blah, blah. Okay, so there is no right answer to that. I take great issue with other companies or agents that tout that they have the right system for getting the maximum production from your people. This is what I call trying to distill human behavior into a financial equation. You can't do it. So within my own agency, I've had situations where individual compensation plans based on percentage of premium, the thresholds made perfect sense. I have also had an environment where personalities involved. I had a, I guess I call her, she's like an alpha female, really, really good at sales, very dominant, just crushed everyone else in the office. The other producers were all newer reps, younger, and it became kind of a toxic environment. So I changed that to have it be based entirely on office production. Now she got overrides from the other producers. Production went up, morale went up dramatically, and it stayed that way for years. It's worked extremely well. So what I've determined that there are some elements that you can implement throughout your compensation plan or in your productivity management plan for your team that will reliably result in higher production. And so one of them is that you've got to have goals public. You've got to set up goals. I can't believe I'm still having this conversation because anybody who's in sales has sat through countless meetings where they've been told about the value of goals. I mean, this is one of the few things in motivation that can actually be proven with numbers, that setting goals results in higher production. So that's the first part of it. The second part I mentioned before is if you can get some team-based— if the dynamics of your office allow for that— having some team-based elements really does improve communication. It gets them checking in with each other and you get other benefits from that, not just based on compensation. You get better relationships, et cetera. That's another component. The other—

Let me ask you something real quick on that one. So on that one, because I think some people would have some questions, what you're advocating is having a team component to the compensation for that individual, not that that entire individual's compensation is solely based on the team. Is that right? So you're almost talking about possibly a blended structure of both individual production and compensation and team-based.

That's exactly right. Let me give you the simplest example of this, and I'm a big fan of simple comp plans. So let's say that you pay out a percentage basis per policy, you know, percent of premium policy on an individual level, and then you pay a flat lump sum bonus if the team hits a certain policy level. Like, let's say they hit 100 policies in a month, and then each person would earn $50. Something as simple as that makes a huge difference.

Gotcha.

So, another thing that we've seen works very, very well is that if you are trying to move multiple different lines of insurance, many insurance producers will either be subject to scorecards from— if they work for captive companies, they typically have scorecards or some kind of travel incentive where you've got to hit on all cylinders. Independent agents will often have minimums that they need to write by insurance company or insurance carrier. If you have that kind of situation, using what I call cross-line dependencies, where you can make one line of insurance or one product dependent upon the sale of another product. The simplest way that I see this, and I'll give you the actual numbers, this is probably the most common thing that I have seen, at least on the captive side where their commissions are a little bit lower. So, if you're on the independent side, you could adjust this upward. But they'll start with P&C commissions at 2% of the entire premium amount. And then for each 2 life policies, it goes up by 2%. And you just keep scaling that up to whatever you're comfortable with. So, that's one plan that actually has been used countless times in our system. So, that seems to work pretty well. And I'm not advocating it, please don't get me wrong. So, I'm simply saying that that's one of the methods that we see agents use. And the percentages there are going to matter dramatically depending on whether or not your people are 100% commission, if they're paid a salary plus commission, etc. So, that's why I get so squirrely about when people say, "Well, what's the right way to do it?" It's like, "Well, totally depends." So, those are a couple of areas though. Each of those things that I just pointed out, the agencies that do that average higher production than those who do not.

So, if that is true, what is the corollary then of the mistakes, the most common mistakes that you see, some of the stupidest things that you've seen regarding compensation plans? I think that's all great. I think also sometimes we need to know what not to do as well, right? I mean, we talk about having to-do lists. Sometimes having a to-don't list is good. So, what's a to-don't list whenever it comes to compensation plans?

Okay. Yeah, I have some good ones. Okay. So, first, the number one mistake that you can make in compensation, nothing comes even close to this one, is setting up a comp plan for your team that they qualify for and then you decide you're not going to pay it. You might as well just let that team go and hire new people because they will never trust you again. So that's number one. You wouldn't believe how often we run into that. So that one's a little bit different. But so the other one would be— let me give you an example. I one time dealt with an agent who had set up a, a sub-producer compensation plan that basically would have guaranteed that this brand new rep would be one of the top 3 sub-producers in the United States. And so I said, you understand that this kind of production is the sort of thing that's like— they'll build a statue of this guy if he can do this. He said, nope, this is what I want. This is the kind of performance that I expect. So I'm gonna, I'm gonna tell you a similar story. One of my cousins was complaining because he couldn't find the perfect girl, and he had all these minuscule things that would drive him crazy. You know, all I'm looking for is this perfect girl. Finally, I told him, I said, you know what, Why do you think when you find the perfect girl, she's going to want you? So kind of a mean thing to say, but we're friends. So the same thing is true with your compensation plan. If you think that you're going to get the perfect sales rep by these ridiculously unreasonable requirements, what makes you think that sales rep is going to want to work for you? Sales is a lucrative field and there's a lot of opportunity for somebody who can sell like that. So think about what you'll be happy with. And move around that rather than trying to create a compensation plan that you think you can manipulate somebody into being a superstar with. It just doesn't work that way. The other mistakes are more common, which are, is it too complex? If they don't understand the compensation plan, it does not influence them. They have to understand it. They have to understand why they need to do certain things or sell certain things, and they have to have visibility into what the next thing is that they need to do to make more money. The more complex it gets, the less visibility that they have in that, and they eventually just kind of figure, "Eh, you know what? I'll just sell whatever and we'll just see how it works out." I want to lean into that one for just a second.

You have a perspective that just very few people are going to be able to have. I was speaking to a couple agents earlier today, as a matter of fact, about this very thing and about how important it was to have a simple compensation plan where it's not too complex. One of the agents I was speaking to had a hard time articulating the compensation plan for their sales team. And I thought to myself, well, if you can't remember what it is, how do you expect your team members to be able to remember what it is? So can you just talk about that for a second, about why it's important to have a simple compensation plan that they can actually understand?

Yeah, so a compensation plan is like a resume. It should fit on one page. So as soon as you've crossed over two pages, it's almost certainly too long. I've seen them spread out over 15 pages. But think about the kind of person— yeah, it's just crazy— but think about the kind of person that goes into sales. Okay, so salespeople are notorious for not wanting to enter information into CRM systems, for instance. They're not very detail-oriented. They don't like to do any of the paperwork involved with selling policies, often creating a lot of service issues in the problem. So you're taking the kind of person who's naturally wired to wanna talk to other people and get out there and sell. And by giving them a complex comp plan, you're pulling them in to something like an accountant should be doing, to dig through these mathematical equations to try to figure out how they should get paid. That's a recipe for disaster, and I've seen it at multiple companies. This isn't just true with sub-producers. This is true with agents, where carriers have scorecards that are so complex that many of the agents just give up on trying to even understand it. And then you'll always have the agent that says, 'Well, I always make a priority to understand how I get paid so that I can make the most money.' Good for you. That's not how everybody else does it, and your method of doing that is no doubt the right way. But at some point, you have to have a realistic idea of human behavior. And so by having a very simple compensation plan with clear visibility into what it is that they need to accomplish, you're much more likely that it is going to influence them. And that's what you're trying to do with a compensation plan. You're trying to influence them. That's why we decide that it's going to be based on this more than this other thing. So does that kind of get to the root of what you were asking?

Yeah, it really does. And do you also see, tend to see too, that the switching happens that they see somebody else that's maybe doing more production than what they're doing, they ask what the compensation plan is, and then they just blindly adopt whatever it is the compensation plan is for that particular business owner is thinking that that's going to be the thing that solves the production problems in their office.

Yeah, that's exactly right. This happens all the time. That's why I'm very leery of agencies pitching their own compensation plans to the masses and saying, you know, this is the one-size-fits-all plan that'll work for everyone. What you often don't realize is that that same agency that may have a very complicated, sophisticated plan, that that same agent is also an incredibly inspirational leader who's engaging with the staff on a regular basis, doing incredible training. That's why I'm always very careful when I talk about elements of a compensation plan. I can tell you what they're associated with in terms of production. I would never step out and say, if you do this, it is going to increase production by this amount. I don't know that. All I can do is look at the characteristics of plans and see that they are associated with higher production. So there are so many other elements that go into it that it would be a huge mistake to assume that by implementing a specific specific kind of plan, you're going to get specific behavior from those people. It'd be nice if it worked that way, but it simply doesn't.

If it worked that way, then you could just tell us what the best compensation plan was and then we would just all adopt that one, right?

Well, exactly. You know, that's what everyone's looking for, and that simply doesn't exist.

Oh man, I mean, I think that we can all agree that simplicity is definitely the way to go. I still can't believe that somebody had a 15-page compensation plan. That's beyond me. I consider myself a nerd and enjoy numbers, but a 15-page compensation plan just sounds ridiculous even for me. But I did want to go back to a point that you were talking about earlier, and that was gamification, just to see if you could elaborate more on that, please.

Yeah. So gamification, the dictionary version of the word means that you use game elements in a non-game setting. I always find it ironic that you can have these professors who take something with the word game in it and make it sound so boring. But I have a slightly different view of what gamification is. So, the way that we implement gamification is that we look at those intrinsic motivators that make people enjoy playing sports even if they don't get paid, or any kind of game for that matter. What is it that makes people want to play tennis if they can't make money in it? And so, we take those intrinsic motivators and carry them over into the business world. So, it can be anything from the camaraderie that you have with other people that comes to that contribution element that I talked about before. Or it could be about mastery, that you can see that you're getting better or that you're better than other people, frankly. You know, that's a big part of it. So we take those and we bring them to the business world and we give them information so that they can have the same kind of experience with their own job as they can have in their hobbies and pursuits. So that's how we implement it. And we could do that through competition formats, personal records. We have live updates, you know, with status changes, very similar to what you would experience during a sporting event, with lots of stats on how people stack up against each other. So it puts them in that same kind of evaluation that they do when they're comparing themselves on how they stack up against other people in the sports world. It works really well, and it's not an attempt to trick people into thinking that their jobs are better than they are. There are some uses of gamification that attempt to do that. In the right setting, it actually works. For instance, if you are trying to make a process like completing— the thing that I can't stand doing it every year is the workers' comp application. Like, if somebody could figure out a way to gamify that workers' comp, the worksheet that I have to fill out, to make it fun so that I would do it, that's a great example of the kind of process where you can try to trick somebody into getting them to do it.

That is a pretty—

they have to do it rarely. Oh, I can't stand it. But if it's their job, that's not going to work. So instead, through gamification, is you find ways to provide an entertaining format that actually increases their focus on their job. From that, you can get long-term benefits that are very substantial.

Thank you for clarifying that. So number one, I would say that a healthy amount of competition in the workplace is good. Phil Knight himself, so like the founder of Nike, when he talked about competition, he was saying that Nike wouldn't be what it is today if Adidas didn't exist. So the—

all right.

Yeah, I definitely like seeing a live scoreboard basically of like how I'm stacking up against my peers. That way I can see what can I do to quote unquote be better in the sense of production, you know, to like be the best producer at the agency. So I can definitely see why this is so effective. Just regarding gamification and how it applies to the everyday life of the agent. Can you elaborate on that? Like, for example, how it applies to millennials today and how agents implement this?

Sure. There's multiple uses for gamification. I mean, it can be from anything as mundane as getting people to enter data into a CRM system. You know, the same— your company gets a new policy management system or customer relationship management system and the reps won't enter data into it. By using gamification where the competition is determined on the data that is entered into that system, you'll get dramatically more data entry into that system. I know that sounds boring, but sometimes that's exactly what you need. But you can also base it on what the salesperson is going to go straight to— sales volume. So you could have competitions that are aligned with the agency's objectives based on the number of policies sold, premiums sold. One of my favorite things to do is to also base it on the number of activities that are completed. So that you're continuing with those, you know, leading indicator activities that will ultimately result in sales. And you can use it for long periods of time or short periods of time. So we'll see some of our clients will run competitions for like an hour. So the great thing about gamification is that if you set a competition on a metric, it's almost guaranteed that you're going to get more of that metric. The thing is, is that you can't do that all the time. It doesn't last forever that way. There's nothing that's quite that easy. But if you're falling behind in a particular area, running a competition based on that, you'll get results if they actually know where they stand in the competition. So I have a rule in my agency that if we win a competition and nobody in the agency knew about the competition, then I get to keep the prize because clearly it had no influence on anybody's activity. So in order to do this properly, you can't send out a spreadsheet once a day, or once a month would be more common. It's got to be in real time, like a live sporting event. If you do that, then you can use gamification for a whole variety of different objectives. You mentioned, and I picked up on this, healthy competition. So you can also end up with toxic hyper-competitiveness within an office, and it's not beneficial to an agency to simply have salesperson A sell all of their sales plus some of the policies that Salesperson B would have sold. You know, we end up with the same number of policies, but Salesperson B is angry. So one of the ways that you can handle that is by creating teams. And so if you've got multiple office locations, you can have your offices compete against each other. If you use points, you can even match your sales and service people on a competition together or against each other. I mean, the service team is often ignored, and they're laying the foundation upon which we build sales. And in a business like this where it's based upon renewals, when you really think about it, the bulk of the agent's paycheck is contingent upon those service people taking care of those clients and keeping them happy. And so, those are— give you a variety of different ways that you can implement gamification in your office.

I say often that with your team, if you have A players, A players will not play if they cannot see the scoreboard. They have to know if they're winning or losing.

Yeah, imagine running a running race where there's supposedly other runners and you can't see any of them. I mean, how fast do you need to run? Are you running fast enough? If not, how much faster do you need to run? It comes back to that data drives decisions. You've got to have that data in order to get people to act based on the data.

So before we move, and I want you to be able to talk about MyVation specifically and what you guys do, I know you've talked previously about the 4 performance tiers: stars, strivers, strugglers, and slugs. Can you touch on that?

Sure. I came up with these designations based upon years and years of working in different sales organizations, and I think they hold true for any organization. It's just a matter of how many people you have in each of these categories. But every company at the top, you've got your stars. These are your big producers that are just killing it. They're super proactive and positive, and there's nothing that's going to stop them. Underneath that, you have your strivers. And so your strivers are trying the best that they can to become the stars. So they're very proactive, they're coachable, very eager to learn. Oftentimes newer reps that are just coming into the business. Underneath that, you have strugglers. And now your strugglers were oftentimes one of your stars or your strivers previously. Your strugglers are negative, things aren't going well, their production is low, they tend to congregate with each other and be negative together, and they're headed in the wrong direction. That's the main thing. And if you don't turn them around, they could potentially end up as one of your slugs. And so, yes, there's a little bit of racing snail racism in this designation, but your slugs, the main characteristic with them is that they're disengaged, engaged and they don't care anymore. Your slugs are in the wrong job. And I know that there will be people who are listening to this who are saying, I'm not gonna refer to my people as slugs. I mean, that's kind of harsh. Okay, I've been a slug. I've been at all 4 of these categories at different points in my career. I was a slug when I was a consultant working as a tester, and I was terrible at it and hated the job. So I just want to be clear, I'm not trying to insult people with that. I'm just saying they're in the wrong job and they need to go somewhere else.

Well, too, also, I don't think you can write somebody's name in permanent ink. At some point, like you said, somebody's a Star, because different things happen in their life, they slip back to be a Striver, maybe even a Struggler. But that doesn't mean that they're a Struggler for the rest of their time working for you. That's where coaching comes into play.

Yeah, that's exactly right. You can move between these groups. So you can, especially on your Strivers, and your strugglers, there's a tremendous amount of movement that you can make with those people because they're still in the game. They haven't disengaged. On your slugs, you gotta look at those carefully. Okay? So it depends on what your environment is. There are some environments where you cannot move them to another job, in which case you're gonna have to figure out a way to get them back in the game. I would also warn you against spending too much time on your stars. Oftentimes your stars don't need you, especially at the agency level. Oftentimes the agents that are stars know far more than any manager at the carrier. There's very little that the carrier can do to help them along. But you are exactly right. It's not a statement about their potential. It's simply a statement about their level of engagement. Hmm.

And that should be framed somewhere.

Yeah.

So talk to us about what does MyVation do specifically?

So MyVation makes performance tools for sales organizations. Actually, we've just expanded beyond typical sales organizations as well, but we have 2 products that are currently in the marketplace with a third being developed. The first one is a productivity management system called Racing Snail that we mentioned before that enables you to set compensation plans for your sub-producers, daily activity plans, goal tracking, ROI reports, all the data that you'd like to have at your fingertips to understand the health of your agency. The other product is the gamification application called Leaderboard Legends that enables you to run competitions based on any metric that you can track. Leaderboard Legends is what we call industry agnostic, meaning that it can work in any industry. It doesn't matter what it is. We have nonprofits looking at it, within insurance, claims teams, and— I'm sorry, claims teams and call centers are also looking at it. Claims is a great application for it because claims is another job where they tend to deal with a lot of stress and maybe not get a lot of recognition for the jobs that they're doing. And then the third product that will be rolled out probably within the next 6 weeks or so is a time tracking system, but our time tracking system will be quite a bit more advanced than your average system because it will take into account productivity information and give you some very fascinating information about when work gets done, when it doesn't, how efficient or effective certain individuals are compared to the others. So that's what we have cooking right now.

That's going to be revolutionary because then you're going to be able to truly figure out the ROI of an employee and when they are the most effective as well, which is going to just allow you to be more transparent and clear with the data that's being generated to you by the activities at the agency.

Yeah. One of the things that I've always wanted to be able to do is to figure out a way that I could look at my staff and say, hey, I'm going to pay you because of your level of productivity. I'm going to pay you a little bit more per hour. And I'm going to let you work 30 hours a week instead of 40. I mean, assuming they want to do that, because I know that they're going to make a little bit more per hour. They may make a little bit less money overall, but they get this big chunk of free time that's more valuable to them. I pay them a little less, I get pretty much the same production that I could have got from them. Everybody's happy. And so that's pretty hard to get to, but when you have all of these tools converging like this, we could actually get to that Yeah, man, this is amazing.

A little bit about me, throwing it out there, is that I enjoy programming and they say that you should build tools that you want to use. And this is the perfect example of that. Like you building the tool that you want to have at your agency, which in this case would be a time tracker that can allow you to make decisions that are data-driven. I mean, based on their production and how many hours they worked and how much you compensated them. This is great, man. I'm super excited for it.

Well, I really appreciate hearing that. And you hope that you're doing the right thing. You hope that you have your finger on the pulse of the marketplace, but it actually means a lot to me to hear you say that, to respond that way. So I appreciate that.

Absolutely.

Seth, you ready for the E9 rapid fire?

I am. All right.

Last book you read?

Mistborn by Brandon Sanderson.

What book do you recommend the most?

Hyperion by Dan Simmons.

What's the one thing selling vacuum cleaners at age 19 taught you that you still use to this day?

If you do the right things long enough, you will get results.

Who's someone that you follow that motivates you?

Believe it or not, Gary Vee. I don't agree with him a lot of the time, but I really like him.

I think it's just his energy.

Yeah, he believes in what he's saying, and I like his no excuse part of it. I like that quite a bit.

You lived in 10 different states and even in Australia. What's your favorite place to live?

Arizona, but my second would've been Australia.

Nice. Where were you in Australia? Just out of curiosity.

So I was in South Australia. I didn't realize this when I lived there, but apparently Australians view South Australia as being kind of like how a lot of northerners view Alabama or Mississippi. Nothing against anybody who lives in Alabama or Mississippi, but I was unaware of that until recently. But it's the area where they grow the wines or the grapes for the wines. So it's beautiful. It looks like Southern— looks very similar to Southern California.

Oh man, that does sound beautiful. Well, I mean, like, in that case, what's one place that you haven't been to that you would love to visit?

Bali.

Bali?

Yeah, I mean, the combination of the beaches and the architecture there just looks incredible.

That's a good one. I know you're big into fitness, and so as we mentioned earlier, at the time of this recording, we're all quarantined from the coronavirus. So what's your best tip for all of us staying in shape while we're at You just have to commit to doing something, even if it's really small.

Like we talked about these micro goals before, that's fine. Fitness is 100% about momentum. And so you just have to do something. Give up on the idea that you're going to get in better shape while you're in quarantine. Probably not going to happen. But if you're normally really into this and you're spending hours in the gym, just dedicate yourself to doing push-ups and pull-ups or sit-ups, etc., every single day. That'll keep you moving, and when this ends, you'll be fine.

Yeah, I actually just purchased some fitness bands yesterday, so who knows, maybe I'll come out of here jacked. So Bradley was telling me that you like hummingbirds. So where does that liking come from?

I think I'm just fascinated. They don't seem like they should be real, for one thing. And what a lot of people don't realize people don't realize about hummingbirds is that they're mean little suckers. They are the most aggressive bird that you will ever encounter, and they spend an equal portion of their day sleeping, eating, and fighting. And so I have what I call a hummingbird fight club set up in my backyard where I've got 12 hummingbird feeders, and it's like a war zone, and it almost seems dangerous sometimes. There's so many of them back there. So it's a lot more fun than it sounds. It's not as girly as Seth.

Well, I'm sure your daughters love that.

My daughters do. My wife can't stand it. She never listens to these podcasts, so I can say this, but one of the things I do is I make the hummingbird feeders that are closest to where she sits outside, I fill them up with sweeter water. And so they get more intense over those hummingbird feeders and it drives her crazy.

Seth, you've accomplished a heck of a lot in your career. Career, obviously still young, but what's next for you? What's something that you're working on next?

So I'm giving a lot of motivational speeches. I kind of got into it by accident based upon the work that I've done at Myvation and other companies that I've worked with, but I really enjoy that. I take a very different approach to motivation than your average motivational speaker. I'm not a jump around the stage, let's all clap and sing kind of guy. I also view my myself as being different from them in that I think a lot of motivational speakers send you out the door with a temporary increase in motivation, whereas I send them out the door with a greater understanding of how to build motivation. That's really what I feel very, very strongly about. The feedback that I get from attendees at my presentations is extremely gratifying, where I have people tell me that they've never heard anything quite like what I just said and that they knew everything that I said was true, but they had never put it all together the way that I did. And that's from both 20-somethings and 60-somethings. And so I feel like I've really nailed that. It's taken a long time in coming, but I really want to do more of that because I truly enjoy it.

Seth, this has been fantastic. I mean, we've covered a heck of a lot of ground today. I mean, we talked about motivation, as you just mentioned, and productivity and gamification. And I've learned a heck of a lot. I've taken a lot of notes today. So we appreciate you coming on the Club Capital Leadership Podcast. So if somebody wants to get in touch with you, learn about Racing Snail, learn about Leaderboard Legends, or even find out about your motivational speaking, what's the best way for them to be able to get in touch with you?

Yeah. So all of those, the best way is probably to reach out to myvation through the website. I am also the only Seth Proiss on LinkedIn in the world, which is kind of funny. So I'm pretty easy to find on there. So my first name's Seth. My last name is spelled P as in Paul, R E-U-S as in SAM. But for the rest of it, MyVation would definitely be the place to go. I serve as an advisor to MyVation. I don't actually work for MyVation. So questions about the product and that sort of thing would definitely be handled through them. But they also help put me in contact with companies that are looking for motivational speakers as well.

That's fantastic. Well, this has been great. I hope that we can have you come back on and just specifically talk about motivation in the future.

Yeah, I would love to do that. Yeah.

Thank you so much for coming through. I feel like there's so much more that I want to know, but we can leave that for another time.

Well, thank you very much for having me on. I really enjoyed this discussion and I appreciate the opportunity very much.

Bradley, what a podcast that was, man. I'm blown away by the 4 tips that Seth left us with to increase productivity by 40% on average above the baseline. Man, that's amazing. I mean, who wouldn't want their agency to start performing 40% better than it is today? I hope that our listeners start implementing those tips right away. I think that they're going to get a lot of value out of it. If they do, what'd you walk away with?

So in addition to the tips of the things to make sure that you have involved with your compensation plans, also really resonated with me is the intrinsic and extrinsic motivators. Look, extrinsic motivators such as money is important, but the things that are the most sustainable are those intrinsic motivators. The team members believing that they're working for something bigger than themselves, that they're actually making a difference, that they can improve and develop mastery within their position, that really resonated with me. And I can think back to over the years of within my own business about how important that has been, much more so than actually just waving a $100 bill in front of my team members. So that to me is something that will stick with me for quite some time. But obviously all the things that you said about compensation plans, really excited about all the things that he said that are coming out with Myvation and the, the new rollouts that they're going to have. If you are interested in looking at Myvation and Racing Snail and Leaderboard Legends, for your office, go to myvation.com. You can book a demo right on their website. And also, hey, wanna give a shout out to our friends Matt and Maddie Jones from DirectClicks Inc. Again, we're shooting this podcast during the coronavirus. A lot of people are shopping their insurance right now, so if you want to be able to capture some of those opportunities and have more inbound leads coming into your office, contact Matt and Maddie Jones with DirectClicks. Go to the website directclicksinc.com. Again, DirectClicks inc.com. Chris, I hope to have Seth on in the future. We're definitely going to bring him in just to talk about motivation and all the things with that. So until next time, lead well and stay classy.

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