Scaling Your Annuity Business Effectively and Efficiently | 7 Figure Annuity Sales Podcast | Ep. 221

On this week's episode, we're going to talk about how to scale your business efficiently and effectively.

Hey, everyone, this is Chad Owen, the annuity sales coach. And my sidekick Robin has come back. I don't know why, because we run out of names, I guess. Or the ice cream man with the white van with no windows.

Boy Wonder, Ice cream Man. Robin, Pinky in the brain.

Oh, we haven't said that one. That was only when you were really sunburned.

Yeah.

Yeah, you were really sunburned.

My forehead looked like leather.

It looked like a tomato.

Y' all miss this if you don't watch the YouTube.

Yeah, I'm telling you, the YouTube's way to go. Absolutely.

So scaling this is fun. And actually, the idea for this came up this morning because I had that thought of, I Wonder, in Chad's $264 million in total annuity premium since 2008, how much of, like, how many years of the recent years make up half of that? So, like, how many years do you have to go back?

Yeah, we talked about this.

And interesting as it would turn out, in 15 years, 2008 to 2022, 15 years worth of production, half of your total volume was written in the last five years. So the most recent one third of your total time makes up half of your total volume.

Wow.

So that goes to show how things have improved and they've scaled. But I took it a step further. I wanted to look at. Okay.

I feel it definitely. Yeah.

Has been.

Yes, lot. Yeah. I took it a step further, though, because I wanted to see how, by what percentage has your annual production grown in contrast to your annual marketing spend.

More than the S and P. I'll show you that.

Well, your annual production has grown by 457% since 2008.

That is more than S and P, isn't it? Well, it depends where it is in a week. Well, gosh, yeah. At this point, it could be way more. Wow, that's a good return on investment. That's why I do tell people, they ask me all the time entrepreneurs, where's the best place to invest yourself? You know, your own knowledge. I was went through my audible collection. I do a ton of audio books. And I thought, honestly, I'd only read about 40. Over 100 books I've read in the past four years. Five years, I think. And I mean, that's not including the Bible. I went through probably three or four times. I can't even tell you how many podcasts I went through. Worship music, you know, but just pure books. Alone is over a hundred. Yeah. I just got this thing that came across that said this lady's been studying over 2,300 millionaires and the number one thing was they always continue to educate themselves. And that's. I thrive on education. But even more importantly, wisdom. And then the revelation on how to apply that wisdom, that's really important to me.

It is. Yeah. Well, in contrast to your production growth, which is again 457% growth from 2008, your marketing budget has only grown by 340%.

That's interesting.

So your marketing budget has grown at a slower rate than your production has, which goes to show process improvement.

It does.

Right.

Agreed. So very good. This is why you're the numbers.

I guess so.

Yeah. No, that's, that's good observation.

I mean you're, you're literally riding more business in less time with fewer leads. Right.

Well, and I remember when I first got started this, even though I'd make my calls on Monday, I would also make calls Saturday morning, but I would run appointments Monday through Friday. And now I only run appointments Tuesday through Thursday.

Right.

Same hours. Yeah. Yeah, that's a good point.

Yeah.

And I'm curious to see the number of appointments versus how many are run now because I know my dollars per application is when our. My dollars per appointment. Yeah.

Your average case size this year is like over $450,000.

Yeah.

Which is crazy.

Yep. I mean, and I use the same leads as everybody else. I'm just really good at finding that they have more money which they don't like to disclose. But when you ask questions, they really appreciate how thorough I'm being.

And you don't take what the lead says as that's what they the annuity should be.

No, that's the worst way to do it. Once again, we talk about what he did, I think his last podcast. You have a cut in your finger, but you're jaundice, you know, just because I'm taking the hundred thousand dollar deal and find out they have 900,000 and I could literally secure their safety and their peace of mind with 700,000 or whatever the numbers is. Because obviously you got to make sure they have plenty of emergency funds and savings. You got to make sure their expenses far are a lot less than their inc. Even if one of them passed away. I mean there's a lot of factors that come to that. But no, it's so important to address the actual issue than just get a sale. That's the worst way to do that is just walk away With a sale.

It's true. And I think that is part of the reason that the industry average case size is so low compared. I mean, it's literally one third.

Yep.

I mean, one third of your average case size is the industry average at about $150,000 in premium. It's like if all you're doing is looking at the lead and you're assuming, well, that's what the annuity needs to be, and you show them that and they buy that, well, great, you, you got the sale. But what. What's it doing for them? What's ultimately what. What problem was solved?

Yep.

And what was. What was left on the table that would have actually been better utilized in it helped create that peace of mind like you talk about, and still been more premium.

Agreed.

Agree.

100% agree.

So, all right, so how do you scale the way that Chad scaled. I put some thought into this and I thought, you know what, we need to start with the current expenses and, like, what is needed in commission monthly to cover the expenses and the compensation and taxes and all of those things. And still a lot for. Based on the commission of what comes in from that initial month's worth of marketing, a lot for an increase periodically. Right. Because we're talking about scaling. We're not talking about, you know, you want to write $10 million a year. So you're going to spend, you know, $10,000 a month on leads and you're going to start at 10 grand right away. It's probably not going to happen. You're going to start at 5.

It's so important to follow me on LinkedIn because I actually share those types of numbers. I just did a post where I shared exactly, well, very close to what my lead cost is starting back in 2008. Now, I didn't track the number of leads till, I think till 2013, but I remember how much my budget was because we use QuickBooks, so I know what we spent on them. I just don't know how many I got. But I tell you exactly how that looks. So go to LinkedIn, look up my profile, and actually that one you. Let's see, how do you do that? You connect, then you like. And then you ring the bell and then you can see whenever I do new posts.

LinkedIn have a bell.

Yeah, they do have a bell, huh? Yep. Yep. It's weird because Facebook has a follow, Instagram As a follow, LinkedIn has a bell, and. And you have a follow option too. And then YouTube also has a. Like subscribe and ring the bell.

Interesting.

Yeah. It's hard to keep up with it, but yeah.

Yeah. Social media is not my forte.

Yeah. But I shared the exact numbers and I will out. I mean, it's funny because I had someone that I really respect says, who does this? Who shares these type of numbers? Nobody. Well, I. And he was referring to just super happy that I did that. I'm like, what do I have to hide?

Right?

I mean, am I afraid somebody's going to outperform me? No, do it. Right. I mean, if you're going to beat me, do it. I'm so fine with that. I want our industry to do well. I want the honest and ethical agents to succeed. I want the problem solvers to succeed. I mean, absolutely. So, yeah, you, that's good.

Yeah.

Sorry, it's almost going on a rant.

That's all right. We're here for it.

Yeah. I'm just not threatened by other people's success. I'm excited about it. I'm happy when they do that.

Right.

I mean, a guy that I'm mentoring right now sent me a picture of him backpacking with his child this morning. Awesome. That is like, there's no greater reward than that.

Right.

Than having family time. There's just no greater reward. So I didn't go, hey, what are you doing out there? You're not making your calls? No. Right. Spend some time with your family. And that's awesome.

Well, that's one of the. Freedom is one of the greatest things the industry affords.

It is, totally. And I mean, look at you. You only work like two hours a week. I mean.

Him and I are always the early birds. We are always getting started real early. Okay. Sorry.

No, that's all right. So you start with the expenses necessary, compensation for living, plan for taxes, all that stuff. And my recommendation is use a conservative commission amount. If you're. If you're set at street level comp, I say use about 6% because in reality, if you're selling 10 year FIAs.

With clients that aren't, you know, north of 75 consistently, you'll realistically probably be making 7ish. But if you plan at 6, then you should have a little bit surplus. But so I say take that, you know, total amount that you need to, to live on each month and pay your bills and all the stuff and divide that by 0.06. Now what you're going to get is you're going to get a number that you need to be selling consistently each month, a premium amount from that. But bear in mind that's like the bare minimum. Yeah, that's like the minimum of where you need to be. So we're trying to plan for scaling, right? So then you take that and you divide that production. So say you get, you know, 300,000. I need to sell 300,000amonth to make what I need to make.

I have a wise person that you know, has always offered me advice, just happens to be my brother. But his thing was always have a surplus of 20% of leads.

That's. Yes.

And so that way, because we know there's going to be times where I mean, I'll call the entire, I mean from 3:30 to 7:30 and not get one appointment. Then there's another time while call my leads and I get in touch with 15 and I have appointments. You just have a surplus in leads. And that's why I spend the amount of money I do on leads, right. I'm always gonna over budget for them. Right now the reality is now with the money I spent on leads, most of the institutions can't even meet what I want to do, you know, five, six thousand a month. Very few of them ever reach that. But they're trying.

They try.

Yeah, yeah.

And, and they want to. Of course it's not for lack of trying. They want to hit that because they hit it. They get, they get, of course they get paid. So, but take that amount and then if you know what your average case size is, divide it by that, right? If you don't know, industry average is about 150,000. So use, use that as maybe a benchmark. So if you're, if you realize, okay, I need to be producing 300,000amonth to make the commission that I need, bare minimum to cover my expenses and all the things then realistically you need to be selling to two a month at.

150,000, which shouldn't be that difficult to do. No, it really shouldn't. I mean our industry, it blows me away when people can't write 3 million or more even without leads. Because I see some of these people, they just, I mean one of these guys that I know very well, he has one radio show, I think it's a half an hour in a very small town. I think there's only 30 or 40,000 people in this town and I think I'm overestimating, but he does 12 million a year. But he walks around with his company jacket on, on his car is this, he has a billboard, he has client appreciation events, he sponsors local things. I mean the guy is the mayor actually named a day after him.

Wow.

So number one, that tells you how small the town is. Yes.

And how influential he is.

But how influential. Yeah.

That's amazing. That's amazing. So then you take that number. Right. So you get a close two cases a month. And this is just an example. I'm just giving you numbers here as an example. Divide that by your close rate. If you know your close rate, great. If you don't, think about 40%, probably close about 40% of the people you meet with. Now, context here, there is so much room for growth in that your close rate this year is north of 75% of the people you meet with. So there is so much room for growth. I always err on the side of conservative numbers, but what that's going to give you is that's going to give you the number of appointments you need to have. And then you take that number and you divide it by your appointment rate. Again, this is the number of people, number of leads you get in divided by the number of appointments you get. Right. So if you get 10 leads and you book three, that's a 30% appointment rate. What you're going to do is you're going to take that number, you're going to divide it by your appointment rate. If you don't know, think about 40% because what that equates to is about half the people you talk to. When you get say 10 leads in, there's going to be a few that just don't answer. You can't get them on the phone 100%. And if you can book half of the people that you do talk with for appointments, that's about a 40% appointment rate. And that's going to give you the total number of leads that you need to get every single month just to break even. But the point is not to break even. It gives you a starting point. So now you can apply a scale factor. If you want to grow by 20% a month, plan for that number of leads to increase by 20% a month.

If you need this to make sense because I'm an expert in this area and Caleb has me just glassy eyed right now.

Do an agent development call and call Caleb at 512-798-53500. Extension five.

Yeah, because I'm still. I might need to call you.

You might need to call me. Well, it, honestly it works so much and I do this.

No, I know you do when I'm working with agents.

But like, it helps so much to apply individual numbers. The point is reverse engineering and Then once you get to the foundation, the baseline of what you have to have, then you apply the percentage of growth rate that you want to have.

Well, and it's like people ask me, like, what's my budget per month? Like, how much do I spend personal? Like how. Because everybody does a. I don't live on a budget. I haven't for 10 years. But that doesn't mean I spend stupidly either.

Right.

You know, I know exactly what's in my bank accounts. I know what we have in reserves. I know what we have in surplus. I just am very cautious on doing things like that. But that being said, it took me many years to get to that point. So when you're doing your budgeting for leads and you're trying to figure it out, like right now, I know this is how I budget for my leads. 1% of my goal.

Yeah.

So if I want to do $40 million, I am going to have to spend $400,000. Now this year, I'm actually considerably under that.

You are very under that.

Yeah. And that's, that's unusual because I think I'm at 34 million and I think I've only spent. What was that number?

200, 211,000, I think on the year.

Yeah, two. So I'm way under that number. But once again, that's a testament to the system in the process.

Right.

I'm the leads I do get. I'm more effective and more efficient on. That's just a fact. And I'm my leads. I'm figuring out ways to get more lead systems. I'm working on a way to develop our lead system to where I can roll it out to other agents, because I'm not going to do leads for, recommend them to agents if I haven't really personally dove in myself and make sure these are done right.

Yeah, there's, there's a couple of numbers that always encourage. When you determine how much you're going to start with on your budget for marketing and leads and you sell some policies, you get paid on them. What I, what I encourage agents to do is try to increase your budget the next month by 20 of what it was the month prior until you get to the point where your, your systems are, are producing the number of leads at a 20 surplus for you to write your goal production.

Yep.

It's. There's a lot of moving parts. But the point is you don't have to come in with a, you want to write $10 million. With a $10 million monthly lead budget, you can start where you're at. And if you use the right formula and the right system, you can scale that up over time. It's what you did.

Yep, it is. And it takes that. I mean, you've heard this saying so many times. It takes many years to become an overnight success. But if you're partnered with us, like the people that are part of retirement realize financial, it blows me away how fast they accelerate. I remember this one guy, he said, I've learned more with you in the past 24. Oh, you remember what the guy.

Oh, goodness, I do.

He said something like, I've learned more with you in the past month than I have my entire 24 years of being in the business. And I was just like it, number one. It's very humbling to me because I do pour my entire heart out into this and effort and energy. But when you have someone that says that and then you start to see their numbers go more and more and more, you know, that's what Retirement Realized Financial is all about. That's what Retirement Realized Agents Academy is all about, is, hey, you have a great fmo, so let's help you get trained without having to move any contracts. We're just into helping people in the industry. Yeah. So I hope this helps you. I appreciate, and thanks for the extra effort you put into that. I'm very confused now. So call Caleb for an agent development session. Put in the comments. And of course, happy selling.

Sam.