Episode 99: Numbers Don’t Lie

Welcome to the Unstoppable Profit Podcast. 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. Greetings friends. This is Mike Stromso coming to you live from the Living Agency Laboratory and the next episode of the Unstoppable Profit podcast. I am excited to share with you today something that is not the sexiest of subjects according to many, but it's one of the very most important subjects that you need to pay attention to consistently on a daily basis. And ultimately, at the end of the day, the reason is because numbers don't lie. And what does this mean to you? If you don't, you're not going to have any control of your business. Because ultimately, at the end of the day, I learned in a very personal session in my life, my wife and I, we were in a marriage betterment situation. Not that we were having any issues, but we always looking to get better personally and professionally. So we went to this weekend getaway where couples were learning how to get better in their personal situations. And I learned something there that I will never ever forget. My response is my responsibility and I have transitioned that into my personal life as well. And it has just changed the way I continue to think forever with regard to business and personal life. But at the end of the day, numbers don't lie. And it is amazing to me, with all the people that I am privileged and honored to work with in our coaching business across North America, when we start digging into their business, when we start getting clear on where their business is at, how are things are going, where they want to go, what their goals are, how they want to grow their business, we start talking about the numbers and I asked them to fill out our famous numbers don't lie sheet, which is ultimately, at the end of the day, they're KPIs and they're not super clear. And when I get on the phone with people, when I get on the phone, I or a zoom zding with people and we start talking about KPIs and I will ask them to rip off their KPIs, they can't tell me, they cannot tell me off the top of their head. And to me that means that they're not, they don't have their finger on the complete pulse of their business. I mean, they might put their finger on their pulse, but they don't feel 100% of where everything is at. And I'm not saying spend a lot of time and grind on it on a daily basis. What I'm suggesting is that you need to create daily habits that support your business, that allow your business to be at least in your mind, so that you can make on the spot, instant decisions regarding your business every single day in every single way. Because at the end of the day, my friends, it is your responsibility and your response on how you handle your, your business functions is your responsibility. So I talk about it in my book, the Unstoppable Profit Producer, the Money Section, and it's called Watch youh Money because we're so quick to say in our industry that we serve our customers and that's what we do and everything else will take care of itself. Well, to an extent it will. But at the end of the day, if you don't measure the gauge that tells you how well you're taking care of your customers, how well you're bringing on new business and keeping the business that you already have earned, then you really don't know how well you're doing. It's a gauge, it's a measure. And the numbers don't lie. They don't lie, they're real. They change based on how you act, how you serve, how you react, and how you're proactive. It all goes together. So I learned in one of the greatest little books that was ever gifted to me that I've studied, that I've listened to, I'll bet you a thousand times the inspirational book by Earl Nightingale called the Strangest Secret. The only people that make money work in the Mint. The rest of us get to earn it. And at the end of the day, my friends, that's what it's all about. We, we earn the money. So thanks to the Internet and mobile banking and that kind of thing, we can check our numbers, we can find out where we are, numbers wise, at the drop of a hat. I was sitting with a customer just yesterday in the Living Agency Laboratory. We were talking about multiple insurance programs because all their insurance programs personally and professionally. And he pulled up his bank accounts. Boom, right there on the spot. He says, this is what's getting deducted out of my bank account for my personal insurance. This is what's getting deducted out of my bank account from my professional insurance, my business insurance. Boom. He added his fingertips. Good for him. You know, one other thing that happened yesterday for that particular business insurance customer, he presented paperwork for a brand new truck that he paid cash for.96k. Why? Because he's got his fingers on the pulse. And my friends, that's part of the importance that I want to encourage you today, to emphasize to you today. You've got to keep your fingers on the pulse. Looking at your business balances is as important, but it's almost as important as checking in. It's those daily habits. And let me tell you some of the reasons that, you know, I check my numbers every single day. I need to know where they are, like I said a couple of minutes ago, to make those on the spot business decisions that need to be made. And if I check in every single day and I know where my balances are at, I know where my lines are at, I know where every facet of my business is at, then I can make those decisions on the spot every single day. I want to learn because I instantly almost know if something is missing in our business, if some of the balances aren't right, if some of the deposits weren't made, if just something is off by creating that great daily habit of checking it out every single day. It is my responsibility, my response is my responsibility in doing that. There's no one more responsible for all of this than myself or the people that I direct to do that. But ultimately, at the end of the day, my great encouragement for you friends is you need to be the one. And once you get in the habit for me, it takes me less than a minute. I'll suggest every single day I know exactly what should be there. I know the time of the month it should be there. And if something is off, I can quickly take it, start taking a deeper dive into what should be there, what should not be there. And I will get to the bottom of it fairly quickly because I have created those great habits of keeping my finger on the pulse. You see, by creating these quality habits of entrepreneurship, by managing your financials, by keeping your fingers on the pulse of your numbers, the more you do it, the less time it will take. It is like riding a bike. I remember in the early days of riding my bicycle, I remember the early days of riding my bicycle out on the street here when I first got clip pedals. And clip pedals are something that if you ride road bicycles, you know exactly what I'm talking about. If you don't, then you may not be familiar with what I'm talking about. But clip pedals is they're on the bottom of your biking shoes and you push down on them and they clip into the pedal. It gives you more strength, it gives you more endurance. You don't have to think about your foot slipping off the pedal. It helps you when you're riding up hills and everything else associated with that. But at the end of the day, it is something that takes getting used to. And it took me some getting used to riding with clipped pedals. And so a Viking buddy of mine who taught me a lot about riding a bicycle said to me, said, mike, when you get clip pedals, just go right up and down your own street as many times as it takes until you feel totally comfortable and get in the habit of riding with cliff pedals. So I did. That was a great tip. Then, unfortunately, I learned right in upp, in our unstoppable nation circles, we talk about wins and lessons, right? Well, then I learned the lesson with clip pedals as well. I was out riding. By the way, clip pedals and the bottoms of the shoes need maintenance also. And sometimes you need to put new.

You know, inner workings on the bottom of the shoes. They need to be upgraded because they wear out. So I put new inner workings, and I'm sitting there doing it myself. And the thing is, you've got to make sure that you pay attention to the little L and the R that's tucked deep inside of it, and you can't really see it. And I just put them on. And so I was out riding by myself one day over in Oceanside, California, and. And I come up to a stop sign, and what you do is you push down and turn your foot sideways to unclip so you can put foot down when you come to the stop sign. Well, unfortunately, I didn't pay close enough attention to the little L and the R, and they were on the wrong foot, and I couldn't get them unclipped. It's the habits and the lessons and paying attention to those details. Big, big door swinging on little hinges, my friends. So consequently, the people, the experienced riders that came up to me at that stop sign, who were behind me, that watched me fall to the ground because I couldn't get my foot unclipped, were laughing. I will obviously never forget that. That was more than a decade ago. But at the end of the day, my friends, it's the little details. Big door swing on little hinges. You got to pay attention to. To the little details. It's so important. Okay? So when I work with business professionals across the country in our coaching programs, it just continues to amaze me. And, hey, that's why they enroll in coaching. That's why they invest in coaching, because they need to get better every single day. And they just need that guidance. They need that mentor along their sides who's been there, done that, and still doing it. So we help them with that. But we talk about the numbers, and I asked them about the numbers, and I say, hey, let's talk about your Numbers Don't Lie sheet. And I'll say, tell me about your KPIs. Tell me the last time you looked at your financials. Tell me how often you look at your financials. And then they have this blank stare on their face and they don't say anything. And that just hurts my heart. That's why I'm doing this podcast right now, because I don't want that to happen to you. Okay, so they have this blank stare on their face, and that means they don't know. They don't pay attention to their numbers. They don't have their finger on the pulse of their business.

I don't know what they're doing. But at the end of the day, we quickly write that aspect of their business so they get crystal clear on their business and every facet of their business and where they are in their business. And that just excites me so.

And what excites me even more is when we get super clear on their numbers so we can foundationally help them build their business, to grow their business, to create wealth, so they can have more freedom to live life on their own terms. You need to look at your financial situation every single day. You need to know your numbers every single day so that you can grow and scale your business. As Ben Franklin once said, if you're failing to plan, you're planning to fail. And failure is not an option within Unstoppable Nation. So we need to make sure that we are paying attention to our financial picture all of the time, because we want you to reach as high as you want to reach and to get there. We've got to be clear on that. So at the end of the day, what is on our Numbers Don't Lie sheet? Well, allow me to share you if I. If I may. Okay, so at the end of the day, it's not. Not super complicated. It's got 1, 2, 3, 4, 5, 6, 7, 8 quadrants on the Numbers Don't Lie sheet. It is the internal KPI measuring of our business. Now, depending on where you stand in the insurance agency business, you might look at the first quadrant a couple of different ways, because I talk to people all the time. If you're an owner, entrepreneur of an insurance agency business, I will say, tell me about your volume. Say, I write and I had a discovery call with somebody, three people yesterday actually, who were interested in our coaching program. They wanted to learn more. So they were discovering what's going, you know, what our coaching program is all about, how it works, the inner workings, etc. Etc. And I will say to them, I say, tell me a little bit about your business. That. And they say, well, you know, I write two and a half million and I say $2 million in revenue. Fantastic. They go, oh no, that's premium. So what we need to be thinking about as agency entrepreneurs is our revenue volume. My friends, you cannot deposit premium in the bank. Yes, you may want to know your premium volume for various reasons, but the number you must know is your revenue number. You can only deposit revenue in the bank and it's your bank account that matters. So know your revenue number. In addition to that, the reason you need to know your revenue number is because of the fact that.

There is a number, an equation of the amount of revenue that you should be generating per team member, whether it be a full time team member or a part time team member. And if you're not generating adequate revenue per team member, then you're not in the right place financially and you need to get your financial house in order. You know, one of the things that I do at the end of every month is I take a deeper dive into my financials, my P and L, my balance sheet, my goals and everything else that's inner working within the business. I sit there and I take a 15 to 30 minute, really deep, quiet look into what's going on. Because that keeps my finger on the pulse, my friends. You've got to be doing that if you want to get crystal clear on where you're going and what you're able to do. I mean, in today's world, you never know when the next acquisition is going to come along. I mean, we have a coaching member who just recently closed an acquisition that it's my opinion, if everything goes well with the acquisition, and we did a lot of coaching before it closed, that this will change the future of that agency. But that was able to happen because that agent has been in our coaching program for about five years and knows their numbers. They know exactly what all the numbers mean. They know what their latitude is, their longitude and everything else surrounding their numbers. Because they knew where they were at, they were able to make the right decisions to be able to grow and scale their business. So you've got to know your revenue per employee the best agencies out there as far as revenue per employee run about $150,000 in revenue per team member. If you're not there yet, don't worry about it. Let us help you get there. We will help you get there. The next thing that you need to look about, look at on your numbers don't lie sheet is your number of in force clients. Your number of in force clients. Yes.

I believe it's 3951 clients is what we've got. Okay, so you need to know how many in force clients you've got. So at the end of the day, those in force clients divided by the number of in force policies equals your policies per client count. And that's one of the first things that I look at when we start working with people in the coaching programs. And I asked them to fill the sheet out and I look at that and I say, all right, let's just take a round number like 1,000 enforced clients. They have a thousand in force clients and let's say they have 1,300 in force policies. They've only got 1.3 policies per client. Not that that's a super negative, but at the end of the day, my friends, that is huge opportunity. Huge opportunity for them to grow from within their own acre of diamonds. That's why that number is so important. It is a rare day, a rare day when I encounter somebody who's got three policies per client. That means they have their auto, home and life. That means they have their business workers, comp, business, auto, add on epli, add on cyber, it does not matter. But at the end of the day, three policies per client should be the goal of every high performing agency. And you might say to me, mike, are you there yet? Not yet, but we're on our way. We're working on it. It's part of our scorecard within our leadership circles and our agency team. So at the end of the day, you got to be clear on that. The next quadrant in our numbers don't lie sheet is retention. You've got to know your retention numbers all of the time. So the first question a lot of people say to me when we start talking about retention, they say, well, how am I measuring retention? Is it client, is it policy, is it premium, is it revenue? Well, my greatest encouragement is start with the one that's the simplest. Start with the one that's the simplest. If your agency management system, as an example, automatically measures client retention, start there. But start getting in the habit of measuring your retention or religiously Religiously, you've got to know what that retention number is. And if your retention number is not high enough, then we need to start working on it together. I am so privileged that our agency retention recently has been running in the mid-90s, and we are so grateful for that. Why? Because we have taken steps to keep our fingers on the pulse, to keep pushing that number, to keep pushing it higher all of the time. And I am grateful and privileged for that. So at the end of the day, you want to be paying attention to that at the end of the day. And one of the things that is a great privilege as well. When we identify that people in our coaching program, they want to start working on retention, we implement the things that need to be done to drive that retention up. I remember a coaching member who I was working with last year who has been in our program for. I think they're on their third year. And the first two years, we got a lot of foundational work done. We got their first P right, we got their processes right. And then they really wanted to dig in and start working on their numbers. And we started working on retention because their retention was a lot lower than they really wanted to be, and they were missing that. And I said, tell me about your retention and why it's down at that number. And they said, we never really thought about it. I said, let's work on that. So we worked on that. Automatically we up their retention five points in just one year without doing anything else. You know what that means to their numbers, especially on a lifetime value basis. That's huge. That's why that number is so vitally important. The next number in the Numbers Don't Lie sheet is your number of annual referrals. And I get. A lot of times when people fill this out, they give me a question mark. They don't know. For me, that hurts my heart. But at the end of the day, the good news is we help them with that. We help them get clear on how many referrals they're actually getting. We get clear on what you're actually doing after the referral comes in. We help them get clear on all the steps they can do to earn even more referrals. Because at the end of the day, you can't. You can't help anything if you have an unidentified target. You can't hit an unidentified target. So you've got to know the foundation of that target before you can begin to hit it. So you've got to know how many annual referrals you're earning. And Then so we can set a goal of earning even more. Because that's our goal for everybody, to help them grow their business, create wealth so they can have more freedom to live life on their own terms. And then the number of full time employees. Now full time employees are full time employees. It's that simple. Now you as the agency, principal or owner, if you are working in the business the majority of the time, you are a full time employee and you count against that revenue number. So get clear on that. All right then, next is the part time employees, Part time employees are a half and count against that revenue number. So you, if you've got five full time employees, two part time employees, those part time employees count as one or a total of six divided by your revenue number equals that revenue per employee. So at the end of the day, like I said, your immediate goal should be $150,000 revenue per employee. Next is the percentage of commercial business, personal business life and health. So it just gives us a broad picture of where everything's at and more importantly, where we can help people grow their business. My friends, at the end of the day, that's why we exist, that's why we're here. We want to help people grow their business, create wealth so they can have more freedom to live life on their own terms and do cool stuff like cousins can. So I have another coaching client, a longtime coaching client who not only has taken this so seriously, has been taking it seriously for a long, long time, and has an Excel sheet that dials in all of these KPIs and more over a decade. And I am so proud of that coaching member. Every time I want to know the numbers, they just pull up their coaching members. She's got it all laid out right there. So super proud. She knows exactly where she's at. She's got her finger on the pulse of her business all the time and there's no wonder she's so successful. One of our other coaching clients, who I have not encountered, an agency and agency principal in North America who has as high a revenue per employee per team member, is this particular agent. It is off the charts. That number that I mentioned, it's more than double that. So at the end of the day, that's what happens when you know your numbers, when you're clear on your numbers, because they do not lie. And all of these agents, so uber proud to be able to stand by their side, to work with them, to continue to push the envelope and help them get better, to grow their business, to create wealth so they can live life on their own terms. And that's all we want for you. My friends. My friends, I hope this has helped you in this episode of the Unstoppable Profit Podcast. And if you've learned something today, just one or two things, please stop what you're, stop what you're doing, write them down and go implement, execute and take action on what you learned today. Keep your finger on the pulse. Get, get into those great daily habits to help you create the business that you're trying to create. And all the hard work you're doing, you're doing great stuff. We just want to help you do even more. And you've got greatness within you. We just get to pull it out of you. If you ever have any questions about what we do in the Unstoppable Profit Producer program, check us out online. Unstoppableprofitproducer.com or you can get started very fast. We have a brand new program that was recently born. Upfastart.com uppfaststart.com Check that out as well. And if you enjoyed what you heard on the podcast today, Unstoppable Profit podcast.com that's unstoppableprofitpodcast.com make sure you go there and subscribe so you don't miss a single episode of everything that we have for you on the Unstoppable Profit podcast. And we're out there on all the channels. Stitcher, Apple, Google Play and all the channels. We're there bringing you key information that you need for your business every single week. Until next time, my friends. This is Mike Somso coming to you live from the Leaving Agency Laboratory. I will see you on the next episode. Until then, get out there, make a difference. Be unstoppable and leave no regrets. We'll talk to you soon, my friends. Take care. 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.com. now go out and make a difference. Be unstoppable and leave no regrets.