Episode 11 : Niches To Riches

Welcome to the Unstoppable Profit Podcast. This podcast will give you all the tools to grow your business and live life on your terms. Millionaire agents and entrepreneurs think and act differently than others. This podcast will give you a simple, proven three step blueprint to grow your business. Over the past 31 years of research in your industry, Mike Stromso has created a unique philosophy called the three people process and promotion. This outside the box thinking and guidance provides agency entrepreneurs just like you the knowledge and tools you can quickly implement to explode your agency business. He has been there, done that, and he's still doing it. Wherever you are today, if you're starting with nothing or are well on your way to the success you desire, with the right people, processes and promotions in place, you will be unstoppable. And now I'd like to introduce your host, Mike Stromso.

I am ultra excited this morning. We are going to dive into the brain of a massively successful insurance agency principal, leader, contributor and most importantly, just from my relationship with Russ, I know that he is a husband and a father. First. Russ, good morning. How are you?

Good morning, Michael. I'm good.

Fantastic. Thank you so much for joining us today. Thank you for agreeing to contribute back to the industry that I know has given you so much and to share with other agents the massive success that you've had in niches. Thank you again for being on the call.

Not a problem.

I always believe you get what you give.

So thank you for asking me.

You're welcome, you're welcome. Just to reiterate, Russ, like I mentioned, is a fantastic family man. I've gotten to know his family. Wonderful. He's also a third generation insurance agency principal. And most recently, Russ experienced again double digit growth in his agency business which is in excess of seven figures in revenue. Again, he reemphasized to me that net growth close to 20% was net after retention. And if you know anything about the agency business, that's even more phenomenal. Just five years ago, within the last five years in his niches, he's been able to triple his agency volume in less than five years. Last year he did more than $1 million in business in his primary niche. I can't wait to learn more. Russ has been in the business almost 30 years. Russ has one office location located in California. Russ, I guess that leads to the first question I've got for you. Do you do business in any states other than your primary state?

No, but I do business all over California.

All right, fantastic. We'll talk about that more. Having worked closely with Russ over the last number of years and having implemented many of the tools that actually I've learned from you, you have been a vital component to help me and my team reach some of the success that we've experienced so far in our business. So thank you so much for that, Russ. I can't wait to dive in and find out a little bit more so that we can help other agents learn as well. So, Russ, to help our audience learn a little bit more about you other than what we just shared, share with us a bit about your industry history and experience.

For example, what you've been through in the business, what your focus is and niches and what your agency concentrates on.

Well, let me first start by saying you're very kind in what you've learned from me, but I think I've learned as much, if not more from you. So thank you for that.

Mike said, I'm a third generation agency owner. I started 20. Oh geez, almost 30 years ago. I forget exactly how many. And what I primarily started was I was working for someone else before I came into the family business and got tired of having someone else tell me when I could be working, when I, you know, what days I could take off, et cetera. And I was engaged at the time and wanted to make sure that when I had a family, when my wife and I had kids, that I would be in control of my own time. So saw the difference between working for someone else and eventually working for myself. And that's why I made the jump. Probably 12 to 15 years ago, we really focused our agency on niches. Today our niches are primarily attorneys, fire protection, sprinkler and extinguisher contractors, residential rentals. And then also we do specialize and focus on personal lines, mostly from rounding from our commercial, but we consider that a niche. So pretty much a little bit of everything but focusing on these main niches primarily.

Russ, do you think it's a smart move to just focus on a handful of niches versus trying to have up to 10 different niches to focus on?

Very much so, because the more you focus and the more you drill down to a specific focus, you're becoming more of a specialized agency and you can do things more efficiently. If we were going to try and write everybody that came in the door, we'd be spinning our wheels a lot for trying to learn those other businesses and or policies. And so by doing it in niches, we can really focus on certain niches and not everything.

Russ, I don't want to put you on the spot. And I'll let you think about this if you don't know off the top of your head, but I know for a fact that your agency revenue per employee is quite admirable. Do you remember what that is off the top of your head?

Yeah. It's almost 200,000 per person.

That's phenomenal. And I believe in my heart of hearts that that's a direct result of being a niche player. Would you agree with that?

Oh, there's no doubt. That is the main. And not only. But that's probably the number one reason for it. Exactly. Because we can be more efficient. Absolutely.

Absolutely. Russ, you are a significant niche player today. What are some of the biggest challenges that you had getting started to grow your niche businesses? Can you think back for us?

Oh, yeah. When we really started making this change, what we really did is we took a look at our book of business, especially from the commercial side, and said, okay, what are we writing today? Or more importantly of what we're writing? What do we have a passion or what do we want to do more in? So then we started looking at those specific. Well, let me back up. We did one niche at a time. We didn't try and do all these niches I mentioned. So we would look at one niche, let's say fire protection. That was the very first niche we did. And then we talked to those customers we had. We found out what we could do differently than our competitors, and then we started focusing specifically on that, Staying consistent in our marketing and working just on that niche, getting it up and going, doing it hopefully better than anybody else and getting it running.

Consistently day in, day out.

Fantastic. So after you identified the niches that you wanted to dive into and what you did well and what you had a good company match for, all those things are important, Accurate, correct?

Yeah.

What were the top two or three things that you changed in your agency which led to immediate, say, big spurts of growth?

The number one is just making the decision to focus on niches and not focus on other, you know, get sidetracked and.

Let me interrupt you for a minute, Russ. I'm sorry, but decision. You made a decision. Is that important?

Oh, huge. Huge. It's our business to decide how and what we want to do. So in that we've got to decide. At least I did as an agency owner. What do I want to do with my business? I'm not going to have the customers tell me what to do. I wanted to do it.

Back to the two things I know that seems so Silly and simple. But making a decision and implementing is such a key.

Very much so. That I think is my, as an owner, that is my biggest asset, that I can give direction to my employees. And here's our focus. Rather than just being reactive, we have to be proactive in that here's how we're going to run the agency, here's what we want to do, and here's what we want. Here's how we're going to lay it out. So that was very, very big and especially into your question just now. So we decided to focus on niches, being very much of a specific. Okay, we're going to focus on this. The example I give a lot of people is if a tow truck owner were to call me today and that's not one of our niches, I'm going to refer them somewhere else. I'm not going to take the time to go out and try and understand that policy, those coverages, etc. I know other companies, agencies and or direct writers that will do a better job at that. And I'm going to stay focused and committed on my niche. So that's one of the points that I would bring up, the second one, and it's one that I see more and more agency owners starting to do. But look at long term, what do you want out of the agency? Okay, five years from now, what do you want to be? And then work backwards. Okay, three years, one year quarterly. And so all of my employees know what our five year goals are. They know what our one year goals are. And then we can start to segment that back to monthly, quarterly, etc. So that hopefully we can get to those annual and five year goals. So those are probably the things that have really made the big spurt growth in our agency over the years.

Interesting. So knowing your destination is all you need to get there.

That's 90% of it. I mean, obviously it's a lot of hard work, but yet without that focus, we would just be, you know, reacting to whatever comes in. If we're focused, we can look at it and really start to commit to it and strive towards it.

And I think the important thing is, and I know you're going to touch on this in just a little bit, but when you have goals, when you get distracted, when you have your goals written down and, you know, available to you, once the distraction ends, you can jump right back to your goals and get right back to what you're doing, correct?

Very, very much so. Right. I'm sitting at my office desk right now and to the left on my wall are my one, three and five year goals. They're always there to give me back, keep me grounded and focused on them first and foremost.

Interesting. That doesn't sound too hard.

If I can do it, anybody can do it. I know that everybody says that, but I'm no rocket scientist.

Yeah, fantastic. So, interestingly enough, one of the things that we're doing currently is we're updating our list of people that we refer business out to when we do get a call in that we don't want to handle. We have a list of of other agents and other people outside of our office that we can refer business to quickly to get it off of our plate so that we can focus on just the things that we do well. Thank you for those great points, Russ.

No problem.

Next thought or question for you. Was it related to any specific thing or campaign that you launched at a given time.

That caused you to choose a particular niche? What were you looking at when?

Well, again, we looked at what we had already written and then not only what we'd written, but what did we have a passion for or were interested in. I don't want to write a niche where if I'm the salesperson or if one of my employees is that they're not really that energized about. So we looked at those first and then we tested. The key to me to all marketing is testing. And so we did the example of the residential rental market. I did my county. Then once we started going a little bit more, our license are for the entire state. You asked earlier if I do other states. No, California is big enough for me already in all the niches I do, but I market to the entire state. Over the years I've looked and there are certain counties I might not market to based on how much I spend on marketing versus how much I write, but I write to the entire state for all of our niches. And so that's really been.

Helped us in becoming more of a niche player rather than just our region. Go to the entire state.

And over time you've expanded to the entire state. But have you dialed in to specific areas and made decisions not to play in specific areas? Because you, I know you're really big on doing your math. Can you talk about that?

Yeah, very much so. Very much so. Because we have the data over the number of years that we've done certain niches, we've come back and looked at the county by county, how much we spend in marketing and all the different ways that we do it and then what we have as far as a return on investment or we refer to as an ROI of commission income. So we look and there are, and I'm going to get it wrong, I want to say almost 60 counties in the state, and I believe we market to 48 or 49 of them based on those that matrix over the years that we've done this. So, yeah, there are certain counties that we walk away from either, mostly because it's just not cost effective to do it.

Right, Right. So you're doing your math. One of the key things that you just said that I also wanted to reemphasize is the fact that, and I admire this about you and I talk about this to other people as well, is the fact that this has evolved over a number of years. This did not just happen overnight, right, Russ?

No, no. We made the decision to become a niche player 2000, 2001, and I would say it really didn't take off until.

I might be off by a year. But 2005, 2004. So it is a commitment and a long term of, okay, where do we want to be in five years or 10 years? Well, not 10 years. We didn't really think that far out, but we are 10 years later, 15 years later, and now we can see where all of our hard work has paid off.

And if I'm not mistaken, your primary niche and one of your primary companies, you are the largest niche player with that company. Is that accurate?

That is accurate. And in that largest niche, there are three people. That's it. And to come back, I don't want to sound arrogant at all. I would hope that people that know me think that I'm not. But I'm very proud that only three people represent the largest volume in that largest niche, in that one carrier. So it's not this big sales force.

So the message that I really wanted to share is, would you continue to encourage people if they select a niche and they get going after six months and things aren't meeting the numbers that they had in mind, would you encourage them to stick with it? If it makes sense, it definitely does.

And that's why you test. When we first start each niche, we're not spending thousands. We are now. My marketing budget is six figures. But in the beginning, it didn't start that way. And it did take us the testing and the tweaking from even little things like the color of ink or the type of mailing you do or the headline. There's so many different variables tested. What I call the Ab split test one to the other, which one pulls better and then keep tweaking it. And we continue to test and we've been doing some of these niches, like I say, for over a decade. So it's something that you keep working on. Just because it works today doesn't mean it's going to work a year from now. And you've got to continue to improve it.

You got to keep your eye on the moving ball, moving target.

Exactly. Exactly. Fantastic.

Thank you so much, Russ. So when was it, I mean, you just mentioned your marketing budget. You seem to have that at the tip of your tongue. When was it that you changed your focus to be more of a sales driven organization and the complete mindset and everything?

Right around early 2000s.

We've always been a service. We pride our. I mean, I think every agency principal prides himself in being the best in service. But without sales, we're nowhere. I mean, everybody knows what their retention. Hopefully everybody knows what their retention number is. Well, in a good agency, let's use an easy number of 90% for retention. Well, there's 10% that you have to replace year after year. Well, without sales, you're going backwards. Well, always we want to be. And I can go around to my office today. Our number one goal, our number one purpose and every employee knows it, is sales. Equally is service. But without sales, we're not going to get anywhere. They're not going to get raises. We're not going to continue to do the things that we want to do.

And again, that culture just continues to grow. And I know you have built in rewards and incentives and everything else. Hopefully we can get a little bit about that. Well, let's just go ahead and jump in now. Can you think of like last year, didn't you do something special for your team if you met a goal?

Yes. So the beginning of last year I said, okay, I want to do something special for all of us if we do a sales number. So if we hit our sales target for the year. And I had kind of done my homework before. Everybody loved all the employees in my office, love Las Vegas. So I said, okay, if we hit our sales goal, we're going to go to Vegas. Well, we hit our sales goal in August, so we definitely did Vegas. We went in January. Everybody brought their spouses or significant others, had a blast and it was a great outing and it was a good focus for everyone for the entire year. Now I've switched this year in that not everybody always wants to go on vacation with their fellow employees. So each employee has an individual goal for this year, and if they hit it at the end of the year, then obviously there will be rewards for that.

Hey, great stuff. Thank you. So back to the culture for just a second. Was it a mindset shift that you made to take your agency in an altogether different direction? What else was it?

Yes, I referred to it as a paradigm shift. Up until, like I say, roughly early 2000s, it was all about reacting to the phone about service. I would only do sales if I had enough time. Now it's become sales is the top priority. Service is key. But we've also redefined our staff in that we have salespeople. Excuse me. And we have service people not doing both. So we're able to accomplish both and keep both of those sales and service as our top objectives.

And you keep your goals and your objectives, both short term and long term, right there in front of you, like you just mentioned, right?

Yes, sir.

So you always have your eyes on the target, so to speak.

Yep.

Fantastic. Thanks, Russ. Hey, as agency entrepreneurs, because that's what we consider ourselves, we just happen to work in the insurance agency business. We have many challenges, obstacles today and certainly tomorrow. What is your number one challenge or obstacle in leading your team and continuing to grow your agency in your chosen niches?

Basically, keeping the staff energized, as we were just talking about with the 30 year big goal and continuing that. You come up with a great idea, everybody gets energized. We were energized. Obviously, we hit our goal in eight months, and then, okay, what happens next? How do you keep them energized again? That's a constant battle that I have of how can I continue to improve the agency culture, sales, service, what have you, and keep everybody energized again. It's a moving target. So hopefully we're doing a good job. Some years we do better than others.

Yeah, well, at a certain point, we all get to a door that says, all right, hey, I'm doing really well. What do I do next to experience that fulfillment? Russ, throughout your career and certainly since I have met you, are and always have been a giver first, how has that impacted your business and your life?

Well, I think I mentioned it, and I did mention it at the beginning. My main, I guess, core belief is you give what you get. Whether it's work, whether it's personal, whether it's spiritual, whatever it might be, whatever you do, helping others comes back to you in spades. I believe.

I try to give back in the community. In fact, I Even have told my staff, other than the ones with young kids, I will pay you up to a certain number of days a year. It's usually five if you want to volunteer in the community. You know, the mom going to the kids, you know, grammar school and helping out, that's not. To me, that's what a parent does. I'm talking about going and helping out. So we do that. I just started being a mentor to another insurance principal. Somebody's done that for me in the past. And so that's probably, you know, what's really helped. And so we go from there.

Fantastic. That just brings joy to my heart. That's a perfect opportunity. Russ, you and I were talking before the call started. You were asking me about why I do what I do, and you were mentioning something about an event that we have coming up right now might be a good time to bring up a little bit about that. I do it for the same reason I've been so fortunate to have what we have to create what we've created. And, and I too agree with you as much as I can say that there's no greater gift than being able to give back to others for the things that we receive. And that's one of the greatest things that I think we share with others is we're still doing this stuff. It's not something we used to do or we don't have an experience in. We still do it and we share everything that mostly works. Some of the things that have been challenges for us so that people can continue to create the agencies that support the life of their dreams. So thank you, Russ.

Perfect. I did think of something else. Back to your last question when you were talking too. You and I have gone round and round on this because when I started with going to the niche side, I'm big on goals. In fact, people that know me kind of laugh going, you know, get out of the way if he's got a goal because you know he's going to do everything he can. Well, I wanted that huge goal when I first started. And back in 2000, my kids were 4 and 8 and my wife, like I think most moms, wanted to be home. So I set out a five year goal that I would have her home well within less than three years. It was two years and seven months she was able to be home. That was huge. In fact, even when we got to the point where we could afford to have her home, I had to go to a good friend of mine that's a financial planner and sit her down and and have him explain it because I didn't think she would believe me that, okay, we've gotten to a point where you can now be home. And so that was huge. And so back to your point from before of things throughout the career that have helped, I think by me helping others, that's helped me in getting her home. So that was really huge.

I mean, think about that for just a second. What has that done for your family?

Mm, very much so.

I mean, short term and long term. I mean, she was able to raise your kids and that's fantastic.

Very much so. So again, I don't say it to brag. I say it more of give back. Whatever you might be, anybody listening on the call, whatever your passions are, help others, because it's going to come back to you in spades.

Absolutely. And creating the agency that supports the life of your dreams, that's what we mean when we say that we want to help people create the life of their dreams. And a dream in your life was to have your wife there to help raise your kids. That's fantastic. Joy to my heart, Russ. So in your opinion, Russ, and kind of an outside the box question, what is the difference between success and failure in your mind?

Well, you got to look at what your goal for your business is. I've, especially in the last few years, I've had a friend of mine tell me to do it this way. Look at your business more from the 10,000 foot level, looking outside and what do you want as a big picture? Do you want certain dollar amount? Do you want a lifestyle? What do you want for me personally when I die? And this is something that I've always thought about, okay, what's on my gravestone, what's on my obituary. I probably will have very little, if anything about owning an insurance agency. It's about my family and friends. So for me, my business provides the lifestyle. For me to be able to do that, to be able to see the kids little league games when they were younger, to hopefully have my staff do the same. So, yes, we've had success in the business, but that's only there to provide the lifestyle for what the people that are working for me and myself to be able to do in life.

So start with hand in mind. Yeah, absolutely right, Russ. In life and in business. And it's many ways how we start, how do you plan your day?

Well, I'm fortunate enough I have what I refer to as an accountability partner. It's another agency principal owner that owns an agency out in the valley and we have A standing appointment every Friday at 2 o' clock that we talk to each other and help each other in moving our businesses forward. And what that Friday call does is we back up to a Monday and Monday, today or yesterday, excuse me. He and I email each other what our goals for the week are. And on that email, it's a form that we've set up for ourselves that shows our annual goals, our top three. No more. Too many goals, you get too distracted. Then it's quarterly and then it's weekly. So on Monday, each of us are holding each other accountable to, okay, what's your priorities for the week? And then on Friday, we go through it. Now, we don't spend the time and go through every line. Did you get them all done? Great. If you didn't, why didn't you? Or where were your hurdles? Where were your issues? Two agency owners. We're not competitors. We have this to be able to help each other because we don't have partners. You know, it's our. It's each of our individual agency. I have my father who's retired, but it's a different, you know, mindset with him. So I have this.

The different relationship.

Be accountable. Yeah, very much so. Very much so. And that is huge. He and I, we've been doing this for, I think it was 2000, mid 2000s, 2005. I mean, so we've been doing this for years. And it's very much helped us each improve our own game. You know, we help each other because obviously we're friends, but we're not competitors. So, okay, how can we push the other one? So that's probably been the biggest help in planning my day, my week, or even longer than that to month and quarter.

So, Russ, my quick thought is, as successful as you are and have been in growing your business, you still have somebody kicking your butt every week.

Very much so. Very much so. And here's a perfect example. If either one of us puts something on our list on Monday and it's been there for, say, two or three weeks, tell the other one. Not rudely, but in so many words, either do something about it or get it off the list. It shouldn't be here longer than that. We're putting things on this list that we want to get done, not that we want to sit there and keep bothering us. You know, every week you can't get everything done you want to do. So, okay, it could stay for another week because you got other priorities. But if it's still there after two or three weeks, what are you doing with this? Let's get it done.

Right. Well, you care about each other's mutual success.

Exactly, Exactly.

It's the bottom line. And you understand that paradigm. You know, one of the things that I learned early on, and I'll just say more than 15 years ago, is that there's so much business out there. I mean, so much business. We could write business every single day until our last day, and we still wouldn't put a dent in the marketplace. I find people out there are worried about other competitors in the marketplace and so forth. That's not a concern, is it, Russ?

Not at all. They don't implement. I mean, even if I were to lay out my biggest niche and how I do it, 9 out of 10 people in the room are not going to implement it or not going to follow through. And we talked about it a little before in the laying it out and being committed to it. I consistently mark it. I have on the calendar and I don't do the mailings. I have a mailhouse do it because we have such high numbers on it. But they know on this day every month they're going to get the next mailing piece for me. And, and I spread it out over that month. So I know, for example, every Monday they're dropping this mailing piece or whatever it might be. So it's consistent. Yeah.

I would agree the Pareto principle is always in effect as well as the law of reciprocity. But the Pareto principle, for those who are not Familiar, is the 8020 rule. Would you agree, Russ, that 80% of people are sitting on their hands and they're not going to implement. It's just the top 20%, which I certainly consider you to be in, are the ones that do implement and are able to obtain the success that you've had.

Well, thank you very much. I definitely, I see it in so many different areas of life, 80, 20, all the way around. But yeah, over the years of doing different. And I'm a big believer in investing in yourself in education, sales, marketing, etc. And when I go to some of these events, like what you're going to have, I look around the room and I'm like, okay, this is great. These people are doing this. Hopefully all of them are that 20% that are going to implement it. But then when you look at how many, let's say just in our business, how many agency owners there are in my state, let's just take that number. Well, it's 80, 20. Again, how many are in the rooms trying to improve themselves.

And going to implement versus those that don't even go or that do go and then don't implement it. I mean, I could go on for quite a while. I won't bore your listeners with all that.

Well, that leads me to another question and we'll support that. You found out about a different style of marketing. How has this helped you and your team? Well, you and I, you figured out There's a top 20% and you figured out it had to do with marketing. So what's happened since then?

Yeah, well, you and I have talked about this at length over many years. I try and go after my niches in many different ways. But probably the most predominant way is what I refer to as high impact marketing. It's the consistent on a certain schedule going back to them, whether it's week after week, month after month or year after year, depending on the frequency that you've set up for, depending on which niche and which customers. But it's that high impact marketing that's getting their attention and getting them to call. I said this to a few people. One of my mailings is basically a single piece of paper that's folded in thirds. I refer to it as a trifold. And I will have a prospect call every now and then and say, hey, I got your junk mail. I don't care what the prospect wants to call it. He picked up the phone and called me. But it's that high impact marketing. It's that message that got across to them and they picked up the phone and called. Now it's up to me to close the deal after that. But by doing it consistently and continuing, as I said before, to have that a B test, to have that tweak, to have that improvement, to be able to get the most return on your investment, that's what's the key. And I look at it also when I'm doing this different style of marketing, I look at it of how long am I going to have that customer. So if I'm going to make, let's say $1,000 in commission, that's just one year. How many multiple years on average am I going to keep them so that I can look at this as an investment? There's a lot of times I will spend the entire first year commission to get the customer because I know I'm going to have them for seven, eight, 10 years. But that's just the way I've gotten my marketing to be, but started small, then expanded out and then continue to test. So that's the different type of style of marketing that's the most effective for what we do in our niches.

So just to make sure everybody understands this, you're looking at the lifetime value of a potential client when you start marketing to them, knowing that you're going to keep them seven, eight years or maybe beyond that. So that if the income first year is $1,000, you're going to make seven or eight. So you're not afraid to invest in the marketing to attract the type of clients that you want in your particular niches? Yes.

What my general rule of thumb is, I will spend dollar for dollar, I will spend on marketing as much as I will make in first year commission on the entire niche if it's warranted, if I know I'm going to keep that client for that long and I can cash flow it. It's not a matter of just looking at that first year commission because what happens next year? What are you really doing to continue to service that customer? Not much. I mean, you have to do some, but nowhere near the energy or the expense to get them on the books the first year. So definitely.

Well, you had talked previously about doing your math and obviously since you have your finger on the pulse at that particular point, you know exactly what dollars you're investing in particular pieces and so forth and so on.

Yep, exactly.

Russ, you are a very savvy marketer. Without question, I put you at the top of the list. Can you expand a little bit on list creation, on tweaking your lists? I know you told me sometime in the last couple of years that you invested a lot of money in a list for a new sub niche that you were focusing on off of your primary top niche. And then also you have lots of direct mail going on. You invest heavily in, in direct mail. Why does direct mail work for your niche and why might people need to be thinking about other things to reach a certain niche, like associations? Go to attend events, talk about all that and I'll help you with some more questions on staying focused on that. So let's talk first because you mentioned a B test and that directly. Well, we'll talk about that on direct mail.

But talk about list creation this week, please. Yes, I was going to say start with list. So let's pick a niche. My fire protection niche. What I did is I interviewed a couple of fire protection prospective customers, called them up, said I don't want to sell them a policy and just went and asked them a bunch of questions. Primarily what I was looking at was what do they belong to in their trade That I could get lists from, whether it's contractors in the state license board, depending on the state, whether it's the attorneys and their organizations, etc. And then from there, once I'm able to get that information, it's important to find out how much I can get. I just don't want a name and an address. I want to know as much as I can about that particular potential customer. And so finding different vendors is not just going in. And a big list vendor that a lot of people know that do direct mail is infousa. Infousa is a great list vendor, but depending on the niche you're looking at, they might not give you enough information. I can look at for example in my fire protection niche and see how many employees. So my niche goes from five or excuse me, from one to 20 employees. I'm not competitive if they're a big fire protection contractor because everybody wants them. Well, the list I bought told me how many employees. So I'm not mailing to a guy that has 50 employees. I don't want to waste the marketing on that. So list creation, finding the right source, finding the right information and then scrubbing that list to fit what you're trying to market to is key. So that would be the main thing in looking at the list and tweaking it. And I think honestly, probably 70% of the success is in the list. The rest is marketing and closing the deal.

70% of your success is in the list?

Very much so. And lists aren't cheap, but again, you're looking at the return on investment.

Fantastic. Can you give us some more nuts and bolts on scrubbing the list? How does that happen in your agency?

In my agency, depending on the list and how many, it's basically for people that are familiar with Excel, it dumps into Excel. So I've got all these different variables by customer, so their name, their address, phone. Because obviously we could be doing a phone campaign. Email really doesn't work. Website might, but it's more sales, number of employees, list characteristics. So if it's residential rental, you know, does it say is it a house, is it a 10 unit apartment, is it a 20 unit apartment, et cetera. So you want to get as develop as much. Well, we're insurance agents, so underwriting criteria that you can and then from there figure out, okay, for my market, for my carrier or multiple carriers, what's their sweet spot, what are we going to market to?

My biggest list has a potential of over 300,000 prospects, but I only market to 110,000 of them. So one out of three, because I've gone in and scrubbed out the ones that won't fit the underwriting criteria. So you look at it and say, okay, can I find a vendor that has all this information or enough information to. That I'm not mailing pieces that are going to go automatically in the round file in the garbage because even if they were to call me, I can't write them. So that, I think is the biggest piece of getting a list is doing your homework, talking to a prospect, finding out what and where they subscribe to so that you can go to those sources and then hopefully be able. Most of them are going to want to sell you the list anyhow because they're looking for revenue. And then depending on what information they provide is whether you use that list.

Or not, 110,000 on the list. I'm envious. But Russ, how does it get scrubbed? Who scrubs it in your office?

It depends on the list. I actually, because of the quantity that I do, I sub out some of it to get scrubbed based on certain particular information. Or more importantly, the list you were talking about last year, I had the vendor scrub it, which cost me more. But here's the particulars. That's what I need. And the math penciled out. So they scrubbed it and then from there. Honestly, a lot of it is either my high school or college son or myself. But I've gotten familiar enough with Excel and I trust me scrubbing when it gets to that kind of information better than I do hiring a college kid. But some things I do. So I guess to answer your question is depending on what we're scrubbing, is who does the scrubbing. So it could be anywhere from an outside vendor to a high school or college kid, one of your employees, or even myself.

And you mentioned that you had the receptionist or director of welcome from time to time also helping you with scrubbing the list.

Very much so. And for the list that we do in house, that's exactly who processes it all. A lot of our lists are done by mail houses because the quantities are such. But when we're doing a small enough list that we do it in house, that's exactly who does it.

Fantastic. Well, I go back to what you previously mentioned. 70% of your success is the list. So people might be thinking, well, how am I going to invest so much time in this? Well, how can you not invest so.

Much time in this? Well, do round numbers. We're in the high $0.40 range now on postage, so do easy math. $0.50. So if you're going to mail 10,000 pieces, or let's go small list. When I did my first counting, it was 1,000 pieces. So if I'm going to spend $500, why am I going to waste 100 or more of it if it's not? Even if those prospects were to call me and they don't fit into my underwriting, so if I can find the information out ahead of time and disqualify them, I'd rather do that up front so that I'm not mailing to them. And again, you're mailing to them not once, but multiple times, whether it's once a week, once a month, once, once a quarter, whatever your frequency is. So that 50 cents gets multiplied out, it's worth the extra to scrub them in the beginning.

Absolutely.

And they're not wasting your time.

In your opinion, how many times do you need to direct mail somebody before you get a response from them?

I've always been told it's 8 to 11, but I can honestly say that I've done mailing campaigns where the first probably two or three cycles have not hit the number I needed, but it took that much. In fact, I have people now that I've been mailing to for multiple years. I've been getting your mailing piece for years, and I finally decided to call you. Perfect. That's all I'm looking for. Pick up the phone. Because then it's up to my staff and me if I'm the one doing the sales to close the deal. The mailing piece is what's getting the phone to ring.

But there's something to be said for continual touches which builds credibility over time. Is that accurate?

Very much so. I don't know if they're nationwide and I know some of your callers are outside the state, but Bed Bath and Beyond has a postcard we get every month. Same postcard, hasn't changed in years. Now, a company that's that big obviously knows their numbers and that card works for them. And I can tell you that my wife keeps them because they'll actually, if what she told me is correct, that 10% off they will let you stack. So you can bring in two postcards and get 20% off. I'm not sure if that's all accurate, but the point is, if they're going to mail to all these households every single month, they know their numbers. So again, it's not just one mailing and done. You've got to make that commitment if.

You want to reach 100% of the marketplace, you've got to reach them. And 100% of the way is 100% of the time. Would you agree with?

I would. And I would also add, I keep talking about direct mail. That's probably 90% of the way I reach out. But you do it in every way. I've got associations, I've got endorsements, I've done commercials. One of my niches just asked me to do a radio spot, you know, an interview, kind of open forum thing. So I go to all of them. I've done trade shows. You know, some of them you look at and you value what your time worth. I don't do as many trade shows as I used to, but hey, you got to look at it and say, okay, again, how are you going to reach out to them? That person that you might see at the trade show or might know you from an association also gets it in the mail. What's it going to take to pick up the phone? That's all that matters.

And you said 70% of the success is the list. So that's what you're working on when you're out there meeting at trade shows or meeting people and that kind of stuff, you're building your list. Russ, we got to keep moving because of time. Thank you so much. So, Russia, how have these changes affected your business and your life and the lives of the people on your team? You mentioned the story with getting your wife home and what it's done for your kids. Anything else?

Just in a nutshell, I'd say probably in the last 10 years, our staff in the office has gone. I'm not a big office, so we've gone from.

Doubling our income and not even doubling our staff. So I have no complaints. Things are moving and I'm very happy.

I'm looking at some notes that we had made on our pre call the other day. You said, more importantly, our systems.

Let the staff be the experts. How important are systems?

That's the backbone of our office, especially being so specialized in niches. We have systems that we do it the same way over and over. And we can process things so much faster because we have it down to a system you call as a fire protection contractor. Here's the questions we ask. It's already templated in my management system to get you a proposal. I can be on and off the phone with you if you answer my certain amount of questions in a couple of minutes. And you can have the proposal in 10 minutes. We're not waiting. I mean, depending on the size of the policies, we have to wait for quotes. But a lot of it, we've done these niches because we can do it internally and without those systems, we couldn't do that. And if one of my employees is sick and the other one's filling in, here's the system. It doesn't take a rocket scientist to come back and fill in the gaps.

Russ, before we jump to the last question, you just said doubling your agency, but systems is a key. Did I hear that correctly? And to boot, you do the same thing over and over and over again. And to reiterate, it doubled your business.

Correct. Because you can do it. You get to the point where you almost don't need the worksheet because you've done it so many times like anything else you do in life. But you also know, okay, let's cut all the fat out of this. Yes, I don't want to be rude to a prospect or a customer on the phone, but the sooner I can go through and process it, I can move on to the next one.

Well, I know one thing I'm going to do after this call, Russ, I'm going to pass this on and I'm going to pull out that little segment of what you just said and I'm going to give it to my own team members and I'm going to let them listen to that over and over and over again. And I would recommend that anybody that's in our program already make sure you share that because that's a key point. It's so simple. So simple. Thank you, Russia. Russ, last question for you. Based on what you've learned so far about business and about life, would you recommend something like a mastermind concept to other entrepreneurs? And why?

Very much so or why not? I would definitely recommend the mastermind. I'm a big proponent in what I said earlier about educating and continuing to help you improve. And Napoleon Hill, think and Grow Rich had a comment about, and I'm going to summarize it because I can't remember it exactly, but my ideas might be great. You and I together might be a little bit better. But a mastermind group, a group of two or three or more are going to go exponentially better ideas. I belong to one mastermind group that's really helped me probably in the last.

I don't know, I think it's almost 10 years now in a lot of my success because I'm able to, again, much like my accountability partner on my Friday call, help me in what's important to me. And they have similar likes similar interests and they're all similar backgrounds because in my particular Mastermind group, they are all agency owners. So we speak the same language, we speak the same trials, tribulations and successes. So definitely Mastermind is a no brainer to me. So much so that I travel three to four times a year to meet with this group at my own expense.

So you got face to face in addition to everything else that's going on. It's not just the quasi out there.

Keeping connection and they're spread out all over the country actually. Well used to be one from Canada, so it's all from one coast to the other and we do emails, conference calls and then face to face time too.

So definitely it's another butt kicking. But to reiterate, you who have gained some incredible success in your own business life and ultimately in your life.

Still to this day are held accountable and remain accountable.

So Russ, I can't thank you enough. So I want to help others so very much.

Great. We've covered so much today, Russ, if you had to sum it up and share just one or two last bullet points for our listeners today, can you think of what those might be?

First is do the 10,000 foot. Where do you want to be in one, three or five years? And then work backwards a segment at a time. One of the books I read a while back by Brian Tracy was How to Eat a Frog A Bite at a Time. Well, in your five year goal it might be something huge, but the only way you're going to get there is by segmenting it and bringing it back to smaller components. So that would be one. And then secondly, what I said earlier about stay true to what your values are and your purpose. My purpose isn't to make tons of money in my business. Yes, that's a byproduct of what we've done. But my purpose is for my family and friends and you know, thanks to your type of systems and what we've talked about over the years, Mike, I'm able to get that success, that control of my life. And I just want to publicly thank you and you know, hey, people like you that have helped me get where I am. So thank you very much, Russ.

I can't thank you enough and I'm just going to reiterate that because I made sure I wrote that down. Number one, make sure you elevate yourself up to the 10,000 foot level. Create a one, a three and a five year plan. Put it somewhere where you can see it all of the time, probably right next to your phone. I've got a bunch of stuff on my wall that I look at all of the time. You mentioned the book by Brian Tracy, how to Eat a Frog, as something that would help with that. And number two, most importantly, stay true to your purpose and your values. Yep. All right, buddy, thank you so much for your time today. And thank you for sharing with everybody out there in the unstoppable world. And remember, make a difference, be unstoppable, and above all, leave no regrets. Thank you for listening. If you would like to listen to more episodes or share this podcast with someone you care about, please visit www.unstoppableprofitpodcast.

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