Agency Transformation

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Welcome to the Agent Leader podcast. My name is Brent Kelly, your host. Thanks so much for joining me on another episode. I hope all is well in your world. I have a very special and reoccurring guest again on today's podcast. I think we'll be hearing more and more from this special guest. Roger Sitkins is with me to talk about a very important idea and concept and we're going to go deeper in this area of trust transformation. So transformation is going to be the focus. How can you transform your agency to, from, from X, from whatever place you are now to why this kind of end result? We're going to talk about some areas of what that looks like. So before we get into that, Roger Sitkins, welcome to the podcast. How are you?

I'm doing great, Brett, and as always, it's a pleasure to be with you and share some information that will lead to, we hope, transformation of your listeners.

Absolutely. Well, thanks again, Roger for being with me and taking the time. Before we get into specific the specific content of transformation on this podcast episode, I do want to send a reminder that if you've not looked@sitkins.com and some of the programs and resources that we have out there, go check it out. We're doing some really, really neat things with agencies across the country as part of our Sitkins Network. So go to sitkins.com programs to learn about some things that we're doing. Also, sitkins.com aim for all and inclusive membership. If you want to be one of our network members and have all inclusive access to our programs and our resources and our coaches, go learn more about that there. We'd love to help your agency move forward. So with that, a way to do that is to do some of the things that Roger is going to share today, which is around transformation. And you know, Roger, we started talking about this idea, this concept and then more action items within this idea and concept sometime, you know, last year, throughout the pandemic year about man, there's a lot of information out there. Why aren't more insurance agencies doing something about it? And you had shared with me, you know, let's, let's stop the information and start the transformation. And you know, I followed up with this idea of, you know, when as an agency leader, and I say this with all love and respect, but when, as an agency leader are you going to stop talking about some of the things that you want to do or could do or should do and when are you actually going to do at least one of these things? A concept that I have shared before on this podcast, but I want to share it before I lead into Roger and get his feedback on this is there's a really powerful law called the law of diminishing intent. And the law of diminishing intent is simple but powerful. It says the longer you wait to do something you know you should do, the less likely it is that you'll ever actually do it. And we see this with. In life and business, right? I mean, in certain parts of life, you know, I. I really should do this. I knew it would be important if I got my financial matters in order. I knew it would be important if I got in better shape, right? I knew it would be important if I, you know, had a better relationship with my spouse or loved one, whatever the case may be. And then a day or two or three or weeks go by and we don't do it. And guess what? We never really commit to it. And then we always have regrets. Right? I wish I would have done that. I should have done that. And so the same thing is true with insurance agencies. I'll hear agencies say, you know, we really need to do this. You know, we really need to focus on that. And then I'll talk to them later because they never did anything go, yeah, we're still kind of thinking about that, and there's no action. So Roger has challenged me and our agencies about let's talk about transformation. So I want to start off with just a very basic question, Roger, but how do you see the difference between information, which is everywhere, and true transformation?

I think it's the analogy we've used before about a fire hose. That information is like just getting a fire hose. Whether you're listening to a podcast like this, but you don't do anything about it, or you attend an online event or maybe a live in person event again, hopefully soon. And it's information, information, information. It's the fire hose. And the real key to transformation is how you can take that fire hose of information filter down to that which you agree with, because, as we say all the time, you won't agree with 100% of the things we recommend. We've never had anybody implement 100% of what we talk about because, number one, they don't like it all. And number two, there are hopefully always more great ideas than there is time or capacity to implement. So you have to take that fire hose of information filter down to get manageable chunks of information, and think of that as the garden hose. And then from the garden hose, once we get it in there, how do we constantly remind people? And that's like a sprinkler time sprinkler system. And then finally, how do you get the soaker hose where you're constantly removing, reminding and keeping things wet enough, if you will, that they're going to grow and really flourish? So to me, the big difference is I can take all this information in the world and I can talk, talk, talk about it. And if you know anything about Colby profiles, our listeners here, if they know about Colby, they know what Quick Start is. And a quick start with us. And I want to hear one. Once we say it, it's already done. And then we've got to move on to a couple of new ideas. And so rather than just chasing a whole bunch of things, let's get down to what are the vital few things we're really committed to. And that to me, is when transformation happens, when you filter down, you love these ideas. You can see your future agency operating that way. You get buy in. And then as a leader, you're making sure that everybody in the agency does at least 80% of everything they say. And when we see that the results are, I mean, you know, industry leading, world class results when they get to that point. But not many do.

Yeah. You know, Roger, all the things you said there, I wrote down, you know, as you were talking about areas of transformation, I mean, what hit me, and this is simple, but, but it's meaningful, is that basically what I heard you say is we're taking ideas and we're turning them into execution. And how do we take ideas to execution? And it hit me already of going, well, why don't more agencies do that? And of course you alluded to that and I are both quick starts is because there's always another great idea, we should do this. And boy, you know, that would be neat. And what if we did that? And certainly we see it with agencies all the time and, you know, with agencies that I work with specifically in our private client group where I get a coach one on one, I always tell agency leaders up front, I said, this is going to be about doing more things. Right? It's not, oh, let's do more things. It's about doing the right things more often. And I think it's just scaling back, as you said, let's filter down to the vital few. There's a lot of things we can do. What are the things that we must do? And are we willing to stay focused and consistent around that? So with that thought in mind, you know, we've kind of talked about ideas and transformation and turn those into execution. What would be some areas, Roger, that you would see specifically, you know, if I'm an insurance agency leader listening and I go, okay, well that sounds great, I want to transform. Where would be some specific areas that you would see where agencies really need to have this transformation process?

Well, if we had three hours, we could probably cover half of them. But getting down to the vital few, in my mind, the things that we see when our agency members, our private clients really just transform and the results are again, world class. Something we talked about recently in the podcast, the concept of the red zone versus the green zone. And how do we get producers in the green zone doing those four key money making activities 80% of the time Time. So when they transform and everybody in the organization understands we have to have our producers become, no longer allow them to become part time producers, but let's get them full time producers, let's get them in the green zone 80% of the time. Now a big part of that, of course, is pipelines. And I've got to guess that 99.9% of the agencies that reach out to us for help, you know, they have these frustrations to one degree or another. It always, pipelines are always in the middle of that. I think you'd agree with it.

Absolutely.

And so just the fact of not just getting a pipeline and it's a bunch of suspects and prospects, as, as we've shared on this podcast before, pipeline should be really be future ideal clients only. So filling up the pipeline with future ideal clients only. I mean, right there, you've got a leg up. It's not suspects or prospects, it's people you've identified. A huge part of that then is, okay, let's say we have this great prospect list, this future ideal client pipeline, and we've got it all set up. Well, what's our unique story? What's that unique selling proposition, those unique and appealing ideas and things that will separate your agency from everybody else. And as we talked about in our super bowl follow up, was, you know, is there a set offense? Huge part of it, Brent. And I know you're going to pick through these, but a huge part of this also is just the concept of reverse performance management. Holding people accountable to do what they said they were going to do. Another big part is what's the financial model that the agency is operating under? The values are so high right now on agencies, but just keeping in mind that we have to have a financial model that we go to. And in our model, we want at least a 30% operating profit. I'm sure the listeners know that means no investment income, no contingency profit sharing income. It's operating income, operating expenses. Are we making at least 30%? Another area that truly is transformational is when people understand, again, vital few versus trivial many. But then they learn how to go deep on that. Deep, as you and I talk about now, is Delivering excellence in every process. Gee, another acronym from us, but Delivering excellence in every Process. So get down to those four or five key processes we have to have in place in the agency, whether it's the set offense, you know, the selling system, whether it's a continuation process, not a renewal process, whether it's pipeline building, whatever it may be. But then how do we deliver excellence in every one of them? A big part of it, and this is one of the things that holds people back. Brent, from true transformation and true success, is they really don't have to do much of what we say and they're going to be semi successful. Compared to the world, they're doing pretty darn good. But you mentioned a term earlier, regrets. Later on in their career, they're going to have regrets. They're going to wish they could have done more. So rather than getting rich slow, let's transform to at least accelerating our financial growth and getting to financial freedom. And then one of the pet peeves I have, and you've talked about this several times already in the podcast, it would be great if every agency would finally, number one, know what their 8020 numbers are, realize that, yeah, the top 5% of my customers are 50% of my revenue and the next 15% of my customers are 30% of my revenue, thus the top 20% are 80% of the revenue. And then how are you going to treat them? So if they would admit, first of all, know the numbers and then secondly, admit, you know, if that's real now, how do we use that to grow our business exponentially? How do we get to three times, four times the national growth rate, the average growth rate? So those are some areas that I say, if you can get your hands around a few of these and just say, what does transformation look like? What's what you said it's executing. It's doing what you said you were going to do.

Yeah, that word execution is funny. I was thinking back, Roger, as you're going through all those, one of our private client members, this has been a couple years ago, but we were going through just our coaching calls and the process and different things. And it was fun as I said at the beginning of this podcast, I asked him a similar question. I said, when are you going to stop talking about all this stuff and actually do one of them? And quite honestly, that was certainly a little jab in there. That was a pretty difficult question. But he got it and he's like, you're right. And I said, well, which one? And you know, where are we going to start here? And kind of helping him through that and all those things, Roger, that you said, obviously looking at pipelines and set office and accountability and, you know, going deeper in those areas. The last part, 8020, are all impactful. But let me just. We'll start with 80 20, because I've done podcasts in 80 20. So if you've listened to this, it's nothing new, but it always amazes me, maybe it shouldn't anymore at this point, the fact that I think a lot of agencies are kind of shooting in the dark because they really haven't thought about where the revenue comes from. They really haven't thought about commonalities from their best clients and what they do best, which obviously helps them differentiate. So let's just back up a second. 80 20. Why, Roger, do agencies not grasp this? And what's one thing they could begin to do? And I guess even a third question, what prevents them from doing some things in 80 20? Love to get your feedback on that.

Let's start with the prevent. It takes work. It takes work. And all too often we've seen through the years where people say, well, that's not my agency, or a producer will say, that's not my book of business. And yet, you know, 99 point whatever percent of the time, it is true, it's real. And so one of the things we did a long time ago in our producer program is rather than talk about the 80 20, then say, go look at your numbers. We now, as you know, say, get your numbers ahead of time. So before we go through that lesson, you have your real number. So you realize it is real for you. Now, occasionally it's not, but the vast, vast, vast majority of the time it is. So just admitting to yourself that, hey, look at where you are. And then a big part's vulnerability, which we've talked about, the average agency and the average producer, you lose the top 5% of your customers, you're basically out of business. You're vulnerable from a profitability perspective, okay? So it's having that awareness and then having an attitude of, okay, I'm going to replicate something. What do I want to replicate? Why wouldn't I just replicate my A and B customers? By the way, I know this is going to sound like I don't like C customers. What I don't like, Brent, are unprofitable accounts. As long as we can prove we can make a profit and we can, when they're handled properly, then basically almost every account is a great account. All right, that you know, the notary bonds, probably not, but other than that they're great accounts. But, but just get a handle on within your agency and within your book of business. What are my A's and B's look like? What's, what are the common traits? How did I get them in the first place? And what am I doing to really create raving fans? You, you talked about this one of the previous podcasts. How all too often people just, they think they got lucky on them versus saying, well, how do I replicate them? How do I go out there and see them and just ask them for help? Because they do want to help you. So if you could just know your numbers and the best producers we work with, especially the ones in our elite 50, the mastery program, not all of them, but certainly I would say the majority of them know their numbers on a quarterly basis where every quarter they're doing a 12 month trailing run. What does my 8020 look like? And then something else which we've talked about recently is that you have well over 90%, 95% of your A's and B's continue with your every year renew. Okay. And yet way less than 10% refer. Why? Because we, as simple as it is, we don't know how to ask for a referral. We're not conversational and conflict. Everybody listening right now. Just stop this for a second and do low risk practice with yourself. What would it sound like if you were in front of a great client and you wanted to ask them for a referral right now? How would you sound? Probably pretty bad. And so we look at this and we have this fear to ask because some of it's head trash, some of it's self limiting beliefs. Well, they're going to say no. Well, if you don't ask them, they've said no. And by the way, if they do say no, what does that say about your relationship? So just jumping on this and realizing the power of it, the power of it, those, those A customers you have, you didn't get lucky. I talked about this recently in the podcast. One of my new favorite sayings, the person at the top of the mountain didn't fall There. Okay, let's make sure we just know our numbers and then say, how do we replicate these? How do we replicate these? One of the things that always hits people, too, when we look at revenue per relationship, which, of course, is crucial. Well, if you do your average A versus your average B, the A's are five times higher. And then if you do your average B versus your average C, the Bs are eight times higher. That means that your average a account is 40 times higher than your average C account. What does that tell you? You know, what's your return on time, working on A's, B's, or C's? So the transformation starts with awareness and acceptance of, yeah, this is real. Now, how can I use this to gain unfair advantages in my marketplace? That's transformation.

Roger, how many 80, 20 reports? Just in that. That's one aspect. Right. Of the many areas of transformation you mentioned, this is just one. How many 80, 20 reports have you looked at or gone through in your career?

Oh, boy. As a firm, if I look at all the, you know, we've had over 3,500 producers go through our program, over a thousand agencies that we've actually done a study for through the years. You know, four or five thousand, maybe now.

Right. I mean, I. I've had an idea of that. I wasn't sure the exact number, but just an idea of how many. I mean, thousands of these. And tell you what, you learn a lot. And as you were saying all that, I wrote one big thing on a piece of paper. Roger, you ready? The truth shall set you free. And, you know, but you're talking about that. Even the fact of, you know, if you had to ask yourself, or if you recorded yourself asking for referral, how would you feel about it? And I think a big part of this, as you were saying this, the first part of transformation is probably the hardest part, which is I have to acknowledge that I stink in a lot of areas. I mean, you know, and that's true for all of us. It's like, boy, you know, I've got to be real. And, you know, we both love the phrase from Dan Sullivan. All progress starts by telling the truth. A lot of agencies, producers, professionals, don't really want to tell themselves the truth because it's easier to kind of lie to yourself. And, Roger, what's the great saying by our good buddy Matt at EHD as part of our elite program about lying to yourself?

Yeah, we were talking about the fact that you've got to be true to yourself. Stop lying to yourself. And he said, the minute you tell yourself that you're being 100% honest with yourself, that's your first lie.

I love that. That was the end of one of our sessions together again. This is our elite program, high level producers. And he said that and the whole room kind of looked at us and I was like, wow, you're right, you're right. And you know, it just, it makes me laugh too, Roger. It makes me think way back in high school and I was in basketball, we had a guy on our team who really thought he was doing pretty darn well. And you know, he could play the part, he didn't always act the part, but could pretend the part pretty well. And he sat down with one of the assistant coach. I remember I could overhear it because I couldn't help it. And he's like, I'm doing pretty good. I, I, I'm doing pretty well in this, I'm pretty good player. And he looked down, he goes, you have a 2 to 5 assist to turnover ratio. That is not good. Right? This is the truth. The truth is you turn the ball over too much. And you know, I say all that just because as an agency, it's not always fun. But ask yourself hard questions and go, am I really doing the things that I should be doing? Am I really facing the truth? And you know, that one area just in 8020 is so powerful because you're right, Roger. So many people say, oh, you know, it's about this. And I think it's right. And I think this is good. But when producers and agencies look at it and go, wow, now I see this and the fact that I've been telling myself that all of these C customers, and again, it's not to bash C customers, it's about being honest of what they represent. Oh, all these C customers are the bread and butter. They keep the lights on, as you said. The truth of it is is they're the ones that cause the bills. Certainly, if we're not careful, if we don't understand what that process looks like and we can't have too many touches in those areas, whatever it may be. So that to me is number one, is just to tell yourself the truth. I want to bring up one more and this maybe get to more action. So with that, you know, part of 80:22 is being honest of who you work well with. Right. You mentioned retention and also leads into pipeline development, which I think you said that maybe every agency is worried about this, Roger. Is that right? Every single agency probably worries about their pipeline.

I Can't think of very many. We have some of the producers now that have really bought in at the elite level. And some of our private clients are there. It's a long journey, but they're getting to the point where they have a problem and they have more referrals than they can follow up on. So they're not worrying about the clicks, pings, dings and rings. They're just filling their pipeline up with the best possible way out there. So they're doing well. But agencies that are struggling, I mean, you know, even if they have a bad closing ratio, even if their closing ratio is way less than 50%, at least with more opportunities, they've got a chance of growing. Now, that's not acceptable, that 50% closing ratio. But it just gets to the point of, you know, stop fooling yourself. You need more opportunities, period. And the better these opportunities, certainly future ideal clients, the better your results are going to be. And then again, think in mind, you're going to replicate something. What do you want to replicate?

Yeah, I think you used the right phrase. I don't know that every agency. I probably said that wrong. Worries about it because some are doing a pretty good job with it, but they're all very aware of it, that's for sure. Right? Yeah. You have to be where most people, you know, it's going to be okay. I think we're all right. And as you said earlier, just one thing to think about is if you looked at your pipeline right now as a listener, whether you're an agency leader with your entire team or you're a producer with your own personal book, is it a pipeline built on suspects prospects or future ideal clients? I mean, it's, you know, suspects are those that breathe air. Prospects are someone that maybe wrote down somewhere, it's in a database. And future ideal clients are those that you've defined. You understand where your competitive advantage is. You have an action plan, right? We have something we work with our clients called a target account strategy plan, that you really go deep, you know, back to that acronym you use, Roger, to say, what are we going to do in this specific area? How do we have a competitive advantage? What are the questions we need to ask? Who are the people that are the influencers? All those things that require more thought. But when you do that, it's amazing. People are like, wow, you know what? I was able to open a conversation because I got more intentional. So anything you want to add to future Ideal clients, Roger?

I mean, that says it all. Just figure out, who do you want to write. I've heard you say this before and I love it. If you market to everybody, you market to no one. And so just you've got to figure out what do you really want in your pipeline. If you can't do that, then it's just the random approach of a whole bunch of practice quoting, unpaid consulting. And at the end of the day, every once in a while, you'll get lucky and you'll sell a few and you'll be semi successful, but later on you'll have regrets. So how's that for a summary?

Well, and you know, as far as transformation, I mean, as you were saying that I'm like, it's, it's in one aspect of moving from, moving from a full service independent insurance agency or agent. Right. Which says what? I don't know, you're one of 30,000 to, you know, we are the agency or professional known for X. Right. And how we, how we do this in this particular market, because you've said it a million times, Roger, and I agree. Specialists make more than generalists for a reason. And you know, a big part of that is identifying a future ideal client and have a strategy around it. I mean, it's just being proactive, being intentional with where you want to go, who you want to work with and all those different factors around that. So again, this is all part of transformation. Hopefully this is ringing some bells for some of you listening, like, wow, you know what? I've been talking about certain areas. It's time for me to dig in and go deep in these. I want to give just a, just a couple of high level thoughts on this, Roger, then give you some final thoughts on transformation. It's crazy to think we've already been doing this for 25 minutes here. It's been a good conversation, important conversation. Just some thoughts on agency transformation. And I'm preparing for a workshop I'll be delivering. In fact, I'll put some notes here on the podcast. Notes. But there are three areas that stand out to me on transformation. We've talked about these in different ways, but number one is mindset. And I think a big part of transformation is many agencies, I don't think they think big enough. They just succumb to the fact that this is who we are and this is what we're always going to be. And I always ask them, well, who told you that? Well, nobody, but that's just the way it is. Right? And we'll see this a lot in family agencies for sure. It's like, well, what is it that you really want. Now, everybody has a different want and need and where they want to go. But you have to ask yourself, is my mindset filled with truth or head trash? You know what, what is it? Number two is the skill set. And we talked about some of these. Whether it's pipelines or accountability or positioning in your agency, what are the skills that you and your agency need to transform in? I mean, you know, the most obvious skill is the skill of communication. I always ask the producers and I've asked the service team, Roger, and the agency leaders on our recent programs, on a scale of 1 to 10, 10 being the most important, how important is communication for your success as an agency? What do they always say, Roger?

10.

10. In fact, you just say 30. Yeah, 12, 30, whatever the case is. And then I ask the follow up question, how are you proactively working, deliberately practicing your communication skills every week? Well, I don't know about that. Well, you just said it's a 10. If you're going to transform, you best be a better communicator. There's a lot of things in that. And of course, last is your environment. Are you transforming by surrounding yourself with people and resources that are going to help you?

Right.

If you surround yourself with junk, guess what turns out junk. Right? If you surround yourself with people that are thinking bigger and will challenge you, will encourage you, and you're filling your, your tool bucket with resources that are going to help you. It's a different type of game that you play. And again, it's all part of the transformation. So with all that being said, Roger, again I want to get you on this podcast because I know how you see transformation. I know that you've helped agencies through this transformation process. What are some final thoughts that you have on the subject?

When I really get deep in discussions with people on information versus transformation, I tell them there are really two different islands you can live on. One of them is Someday Isle, which we've talked about before. Someday I'll do this and someday I'll do that. But right now I'm too busy and I got a lot going on and I'm already semi successful and so some. But someday I'll do this. Someday I'll do it. And then the other island, whether we, I kiddingly call it Sitkins island, with our best clients and friends, but it's the best version possible island. That's where the agency has said, okay, we're going to stop talking about information and talking about what we're going to do. As my friends here in the south say, we're fixing to do this and we're fixing to do that. Okay? But they stop talking about it, and they put together a plan, an execution plan that, you know, delivering excellence in every process, and they hold themselves accountable to this best version possible. Okay? And when they do that, the cool thing is that they have a big enough why. And we've talked about this both independently and together on podcasts, but I heard this the other day that really hit home with me. It said, if you're going to transform, your why has to be so big, it could make you cry. I thought, wow, what's so big, so powerful that I'd want to accomplish that? If I don't do it, I guess I'm probably going to cry. But if I do it, there are tears of joy. So just think about that. What's the why that would make you cry? And then figure out exactly what you're going to do and just move off that someday island to aisle to the best version possible. That's what happens.

Love that. Love that. Well, I'm going to give one action item to all the listeners here. So I think it wouldn't be fair, Roger, if we talked about transformation, taking action. I didn't give a call to action at the end. So, again, for your agency, it may be a number of different things that come to your mind, but just like I would tell you, you know, we do this on all of our programs in a process ongoing, to have continual movement forward. Right. This transformation. But I want you as an agency leader, whatever your position is, specifically your roles, your duties. But I want you right now, unless you're driving. And if you're driving, you can do this later. But I want you to write down what's one item that you've been talking about for too long that it's time to take action on. What's one item that you've been talking again? It could be, why aren't my. Why isn't my team more accountable? Or why is our pipeline empty? Or why do we have no positioning statement or competitive advantage? Or we don't have any differentiators out there that we're talking about, or why aren't we practicing the things that we should be doing? I don't know, I'm just naming some stuff off. It could be a number of things. But what's your one thing that you need to stop talking about and start taking action. And next to that, I want you to write when you're going to do that. Right? Because it's another thing too. You could. It just continues to lead into something else where you write it down and you stick it in a drawer or whatever and you're off to the next. When is the item or, you know, when are you going to do that and put it in your calendar? Right now. Put in your calendar. I'm going to address this issue. Maybe it's the first step, maybe it's the third step. I don't know where you're at, but what's the thing you got to stop talking about and start doing so. Roger, thanks for, thanks for being part of this podcast today. Appreciate as always. Hopefully everyone's taking notes. So, Roger, thanks again for being here and one final mention, too. I mentioned this on the beginning that if you're an agency and you really are looking for transformation, you need resources and help and peers and training and a proven process that's been, you know, Roger mentioned he's done thousands of 80 twenties. But we'll also work with thousands of agencies over the years at Sitkins. If you're looking to take that transformational step to really move yourself in the right direction, we would love an opportunity to work with you and your agency and help you make those proper improvements, those necessary improvements to get you to where you want to go. Whatever that. Why is that makes you want to cry that you're so you want so bad? We want to help you achieve that. So go to sitkins.com aim for all inclusive membership. Learn more about how we're helping agencies transform every single day. And with that, I want to wish you all the best in your success. Thanks for listening.