Exit Barriers featuring Roger Sitkins

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Welcome to the Agent Leader Podcast. My name is Brent Kelly, your host. I am honored and humbled you are with me on today's episode and always excited about the Agent Leader Podcast episodes, but super excited today because I have a very special guest who I'll introduce just in a few moments. But first of all, I want to give an overview. What is this podcast all about? If you're a new listener, a returning listener? Well, this podcast is about helping you and your agency gain clarity, build consistency, and then make a commitment to become your best version possible. Over the past few episodes, I've been sharing some of the Sitkins core strategies. I'm the vice president of the Sitkins Group and we have some core strategies that we believe in, that we preach and we teach and we know that simply work for agencies to get great results. And I've talked a little bit over the past few weeks about high performance teams, so working with sales and service together. Talked on the most recent episodes about Building Me, Inc. Which is personal accountability and how to do that. And today we're going to talk about exit barriers. And one of the the calls to action that I want to share with you because this is so important and impactful to me and for agencies that I tend is that upcoming on March 11th through the 13th. So not that far away if you're listening here, as I'm recording this sometime in January, but coming up the next few weeks, March 11th through the 13th, our profit net event. This is our premier event for the Sitkins Group and I will tell you this will be the last time if you are not a private member, a private client member of the Sitkins Network that you'll be able to attend. So I want to make sure I extend that offer, that invitation to you. We've had so many attendees, you know, that have attended this particular event. Even last year we had it that said, this was the best, best event that I've ever attended. And of course I'm saying that sounds like I'm bragging and maybe I am, but that comes from the mouth of those attendees and I just really want you to take advantage of that opportunity if you can make it to Cape Coral, Florida, that beautiful cape Coral, Florida, March 11th through the 13th. So with that, I want to talk about exit barriers. But before we can talk about exit barriers, I should probably introduce our very special guest I mentioned. I'm the vice president of the Sitkins Group. So you may want to know who is the president of the Sitkins Group. Well, it's Roger Sitkins And I've got Roger Sitkins on the call with me today. So, Roger, welcome to the Agent Leader podcast.

Thanks, Brent. It's really a pleasure to be here. And it's kind of fun to do a podcast with the two of us, sending our message out to more and more agency leaders.

Yeah, it's. We obviously do a lot of training camps together and go back and forth and we're in a room. But to be able to have these conversations and, you know, have the whole audience, whoever wants to click the button on the podcast listen is pretty exciting. So. Well, I brought Roger in and one of the things that Roger has talked about for years and has helped educate me and agencies is this idea of exit barriers.

Exactly.

And so, Roger, if you could just kick things off and use the term exit barriers, some agencies may have some idea what that means, but I'm sure many have no idea. So what is an exit barrier?

Well, at the end of the day, it's all about retaining and obtaining ideal clients as we talk about. And the key there, the first one, is retaining. What do we have to do to keep clients and provide such a great experience for them that they never want to leave us? And quite frankly, it might even be too cumbersome for. For them to leave us for them in their business or their personal life. So we wanna be able to put these exit barriers in that say, you know what, you really should stay with us because at the end of the day, the most profitable customers we have are longtime clients where we write really all of their coverages. So that's where it started, building retention.

Yeah, it's an important concept and we talk about all the time. And again, most agencies know this, but do we really take it to heart that it's certainly easier and more profitable to keep a current client, at least a good, good client, than it is to obtain a new one? And so they're both important, we want to retain and obtain, but I think sometimes retention we take for granted because in this business, as you know, Roger, you can be pretty average and still have a decent retention. God bless this business. But what, what if we were able to take that up a few more notches? And, you know, I think of exit bears and this may be a good or bad analogy, I don't know. You know, I just think of exit barriers as down the interstate. You know, a client gets on the on ramp and they become part of the agency experience. And one of the things that we. To keep them on that, you know, that. That interstate, so to speak, without getting off at a stop, which would be another agency. Roger, in your experience of, you know, the many years you've been doing coaching and consulting, what Just you know, in a general sense. But we're going to dive into some of the specifics here in a second. But in a general sense, what have some of your best agencies done? Maybe just from a philosophical or mindset to help client retention and you know, have these exit barriers in place.

Well, you said an important word there, mindset. It's part of the culture, it's the belief system of the agency. What's it really all about? Well, the first one is pretty obvious. It's a full time client. So think to yourself what percent of your customers today buy all of their insurance and risk management needs from your agency. So a full time client is really important because number one, I firmly believe that if nobody else is in, nobody else can get, in other words, if they're not dealing with any other agency that they're going to stay with us. So we want every single thing they can possibly buy in insurance related business that they buy from us. And that's going to do a couple of things for us. Number one, it's going to make it tougher for them to leave. You know, if they only have one or two policies with you, they can leave pretty easily. But if they have all of their coverages with us, let's take a business owner that has all of their business coverage, their VIP personal, their benefits, their life insurance and if you do investments too, they've got everything. It would really be a hassle for them to leave. Secondly, what this does, it drives one of the most important KPI key performance indicator for an agency. It's your revenue per relationship. Let's face it, the size of the agency, the size of the individual books of business are always driven by the average revenue per customer. So a full time client says we write all of their coverage, we of course have make more money on them, we earn more money on them coming in the door and thus we're going to earn a better profit on each and every one of them. So getting to the point where we simply do not accept part time clients, we just say that if we're going to handle this client we have to handle all of their coverage. And they're obviously a ton of systems and training behind that. But it starts with that mindset of full time clients only.

Yeah, the mindset is, you know I mentioned, and then you alluded to as well, it is so important. I mean it's, it's it's one thing to say, well, we're going to have this process, but what's the philosophy behind the process? And I guess this may seem like a silly question, but you think of agencies and again, you've talked and consulted with many, many agencies over the years. I think most of them would agree that if we were to have full time clients, we would not only retain at a higher percentage, but we'd also make more money in the idea that rounded out accounts. So what's the roadblock? Roger, that you see, why do agencies not do that?

What happens, it never gets reinforced. It's never part of the culture. There's no accountability around it. Every account's a great account. Let's just write it. Let's confuse activity with results. And what it really comes down to, I think all of that is number one, agency leaders, and that's what we're talking to today. Just decide, you know what, this is our agency's way of doing business. We write full time clients only or a commitment to write full time when the rest of the account comes due, that we're going to at least get an opportunity to get in there to perform and that everybody on the team realizes, hey, the more clients, the more revenue we have per client, the better we improve our retention, the more money we make and the only way everybody's going to make more money in the agency is if the agency makes more money. It's pretty simple, but. And then finally it just comes down to, is there a culture of accountability? Are people being held accountable to do what they said they were going to do? And as you well know, our best members, members of our private network, the Sitkins Network, the culture and cadence of accountability is crucial. That's why they get great results. So that's the starting point for me.

Fantastic. As you know, Roger, we've had many discussions and when I hear a leadership talk, so many things reflect back to my kiddos since I have five of them and they're different ages. But it just, I mean, some of it's just so obvious and simple. But it's true in family and in business. And I just think, you know, if I tell my daughter, like, hey, you know, when you get a chance or if you feel like it, could you wash the dishes? Versus this is what we do. There's obviously a difference because we all want to do, we all navigate to what's easy. And so when you think about full time clients, in many cases it's easier not to ask or easier not to prepare or, you know, Easier not to ask a question, but long term, it makes everything else harder. And I think that's just a really important point that you shared. So full time clients would be one of the exit barriers. What else, Roger, what are some other exit barriers an agency could begin to look at, review and put in place for their agency?

Yeah, the second one is formal relationship management. You know, do you want to have clients, do you want to have customers, or do you want to have raving fans? And do you want to provide such a great client experience for them that they are the raving fans, they would never think of leaving you, and they absolutely want to send you referrals and introductions. So a huge part of this and understanding where we are in digital disruption and everything is that agencies have got to pivot from transactions to relationships. Matter of fact, some of the studying I've done recently says that with the big movement towards digital, that relationships, and I think this will surprise some people, relationships are gonna be more important than they ever were. So we've gotta get in there and really get to know our clients. We should certainly, certainly on the A and B clients. And I know you've talked about this in the past, we talk about it all the time. We know the 8020 rule is real, top 20% of the customers are 80% of the commission income. There's no doubt about it. 99.9% of the agencies we've looked at. That's true. And so when we look at that, Certainly the top 20%, we've got to start doing a personal profile. And we have to know what some people can say, oh, this is silly and old fashioned. Well, what about birthday cards? Do we know their birthdays? Do we know what teams they support? Do we know drink, don't drink, you know, do we know that they like theater or music or whatever it may be? Do we know the charities they support the most? Do we know what's most important to them? Do we know anything about their family? Just finding out things about them. Because relationships at the end of the day are all about deposits and withdrawals. And what I see happening all too often is because agents and the agency staff are not purposefully making deposits, but then they turn around and ask for a withdrawal and there's nothing in the account. And you know, this could be just little things. Like I mentioned birthday. Okay, what about birthday cards? I already said that. What about thank you notes when someone has continued the relationship with you? What about thank yous for a referral? Okay, what about just reaching out to them with A random call to see how things are going. So just a purposeful look at, hey, relationships are what it's all about. And we are a relationship based agency that provides an outstanding client experience that leads to very high retention because we've got a personal relationship with them and we're not going to get fired quickly. And again, they're going to send us referrals. So it's a total focus on relationships. That's what really matters.

Fantastic. I just, I was making some notes as you were, you were speaking there, Roger. And obviously, you know, we talk with producers that are camps, we go pretty deep into this area, different things you can do and it's always fascinating to me, at least it has been in the last couple years that of all the things that we go through and you know, we'll go through some details and it's typically the most simple things that have the largest effect. Yeah. And you mentioned birthday cards and thank you cards and you know, one of my phrases and we use this is that, you know, silent gratitude is no gratitude at all. And it's always funny because we think about emails and technology and all those things are good and should support the business. But we joke and you'll probably get a chuck on this, Roger. We say, how many people don't open a thank you card or don't appreciate a thank you card? So just think about some of the simple things you can do. You don't have to do everything, you just have to do more. So that's fantastic. I love that concept of relationship management. How about one more, Roger? I know we've got several that we talk with the agencies about, but what would be one more exit barrier that an agent, agency leader today could, could understand and maybe start to, to execute in their agency?

Well, God, there's so many of them. But, but certainly I would jump all over a continuation process because it comes back to relationships. We don't renew accounts, we continue relationships. And certainly on the A and B customers and the VIP personal lines customers, we need to start understanding exactly what they want from us. You've, you've heard me talk about this several times in a producer camp, but I think it's worth sharing here today. I always get a kick out of it when someone says, well, what we do that makes us unique is we exceed our client expectations. We exceed their expectations. And the one time that producer walked into one of our sessions, first session, the producer Fit program and you could tell the golf shirt he had on was brand new and it had the ANC logo On it and underneath it it said exceeding your expectations. And I looked at him, I said, wow, that's a really nice shirt. Oh, thank you. Exceeding expectations. Yeah, that's what we do. Really? Yep. Cool. What's the name of your largest account? He looked at me and said, what's the name of your largest account? And I don't remember what it was. Let's say it was ABC Construction. I said, what are their expectations? And I just looked at them and you've seen me do this several times. And he got real silent. All of a sudden he realized, I guess I don't know. And so part of the continuation process at quote unquote policy delivery meeting where we're putting it all to bed, we're sitting there and we're just asking them flat out, what do you expect from us this year? And some form of basically what happen over the next 12 months for you to guarantee me we'll continue the relationship again next year. And so we get the client to communicate back to us exactly what they expect. Now here's a great litmus test. If you've done everything right and if you have a service calendar and a formal risk management plan that you've documented that you're going to be delivering and you've given it to them as part of the delivery appointment, what's really going to work, you're going to know. The litmus test again is when the client says, I expect you to do exactly what you said you were going to do. You do that. We're in great shape. So there's the rules of the game. We would then send them a letter saying thank you for choosing us or thank you for continuing the relationship. As we agreed, here's what has to happen during the policy year. And then of course the continuation process includes again, we're talking to larger accounts here. It includes a six month anniversary visit where we do. Whether you want to call it a stewardship report, we prefer to call it a promise report because I think it is all about keeping promises. And at that six month anniversary we, we're starting the renewal discussion with them, in other words, marketplace discussion. We've got you with company A now, they still love you, but we're going to be taking a look at company B and C also because they have an interest in your type of account. We want them to know that we're going to market for them. One of the most important positioning lines a producer can use is please understand we. In other words, my agency represents you to the marketplace, not the other way around. We don't represent the marketplace to you. We. We take you to the marketplace. So it's all part of this continuation process. Again, policy delivery, asking the question, documenting it, and a thank you. Having the promise report, starting the renewal process way early. And when you think about it, also, it gets back to relationship management and everything else. And you mentioned what a great business it is. Most agencies have at least a 90 to 93% retention rate. But what percent of the clients give you a referral? Well, it's way less than 10%. For most agencies, it's way less than 5. It's because we're not doing some of the things we've just talked about that provide a great client experience and a raving fan. And just ask yourself this question. Why aren't more of our customers giving us referrals? Well, a big part is you're not asking because you've never practiced how. And secondly, you're not making enough deposits to earn a referral. So I think it's crucial. In fact, it's foundational to everything that we teach.

Yeah, there's, as you were saying that, Roger, several things come to mind and we could, we could probably spend two hours talking about this at least. And we certainly dive deeper, you know, in our, in our programs and give further processes and tools and resources to help the agency succeed in this area. But I think sometimes, again, going back to what I said earlier, it's about simplicity and, you know, what you just said, it's alarming to think that again, how great of a business this is that, you know, 90% plus will stay with our agency, yet less than 10% will refer another piece of business. And, you know, people say, well, you know, I don't ask, I don't ask. Well, that certainly is part of it. But I think when you get to the depths of it, it's because I think internally we realize that we really haven't earned it. And it's really hard to ask for something that we don't feel, whether it's our feeling or the client's feeling that we've earned. And some of the things that you've just talked about, Roger, are very important steps to say, listen, we're going to be proactive in this. And you know, I can, I always like to simplify things, and I talked about this with you just last week, but saying really it's about three things. Defining your expectations. Document on what the client says and wants and they need and delivering on the promises we agreed to. And that's, you know, A huge part of it. But back to what I've talked about in this podcast before and in our events. One of the big reasons why agencies don't do it is because they don't make the time to do it because we're in hysterical activity. So, good discussion, Roger. Say we could go on forever and exit barriers. But any, any final thoughts just in general to come to mind? I'm glad to have you on the podcast. It's a pleasure and I know the listeners will, will gain much from it. So, anything else you want to add? Closing thoughts?

Well, I think a final thought is, is, are you really getting yourself positioned as a trusted advisor with your client or are you a vendor of a commodity? And as you know, we, we teach. It's a pretty simple litmus test, another litmus test. It's all based on when the client calls you. If they call you before they're going to do anything that has insurance or risk management tied to it, you're a trusted advisor. If they call you after the fact, you're a vendor. So they call you and say, oh, I forgot to tell you. Three months ago we entered into a new lease. It has some insurance requirements on it. I guess you should look at it. That's a, that's a vendor, that's a commodity, versus the trusted advisor, where they say, you know, we've got a lease, we're thinking of signing, and so we just have got to get ourselves positioned as. Hey, before you do anything, call me because we want to be positioned as the trusted advisor. And you're going to get there by doing the things we've talked about today. It's certainly a starting point.

Wonderful. I think it's great advice. I'm going to leave it at that because we keep these podcasts relatively short for agency leaders that are between meetings and commuting and whatever they're doing. But I do want to again have one final call to action. And you know our Profit Net event, one of my favorite phrases, I love to share this, that if you're the smartest person in the room, it's probably time to find a new room. And I can, I'll guarantee you that if you attend Profit Net, you won't be the smartest person in the room. There's going to be some really bright agency leaders. We've got some great speakers coming in in different specific areas and we really treat this as a workshop. You know, we want you to lead this event, not just excited and, and you're going to have some laughs and have some great food and, and meet some great people, but you can walk out and go, you know what? I I feel really good about a plan that we're going forth in 2020 and beyond. So profit net, Cape Coral, Florida, March 11th through the 13th, just go to sitkins.coms I t K-I-N s.com or you can also go to sitkins.com profit net if you want to go directly to the link, or just reach out to me or our team, we'll be happy to answer more questions and help you with that. So with that, thanks again for being a listener of the Agent Leader podcast. We continue to go through more core strategies in the coming weeks. And Roger, again, thanks for being off me today. I appreciate it.

My pleasure.

All right. All the best. Take care.