Stop Wanting What You Don't Want

If you don't know what you want in life, there's a good chance that you may just get it. Today I'm going to talk about intentional focus for your agency on the Agent Leader Podcast. The Agent Leader Podcast is sponsored by the Sitkins Network, home of the Pro Fit Experience. Sell more, retain more, and earn more. You can learn more@sitkins.com that's Sitkins. Well, hello there, and welcome to another episode of the Agent Leader Podcast. My name is Brent Kelly. I'm super excited that you're here and really excited about some of the content that I'm going to share with you today that really revolves around keeping your mind, keeping your agency focused on the right thing. You know, one of the things that we talk about as coaches when I work with agencies across the country is, is, you know, there are a hundred things you could do, hundreds of things you could do, but what are the most important things and how do you focus in on that? How do you filter out some of the noise and get really intentional on the main thing? That's why at the opening of this podcast, I said, you know, if you don't know what you want in life, you're likely going to get it. And I think a lot of insurance agencies are kind of just floating through, and oftentimes being busy just feels good. I don't know if we're getting results or not. In fact, I'm frustrated. I feel overwhelmed sometimes, and I feel like I'm just always running a race and not sure if I'm even going anywhere. But darn it, I'm busy. I'm busy. One of the most vital aspects of insurance agency growth, when agencies say, we want to grow, we want to grow, there's a lot of ways you can grow your agency. Certainly you can have acquisitions or mergers, but for most agencies at the core, we want to grow organically. We want to internally with what we have. How do we grow? How do we get more coming in the front door? We have less leaving out the back door, and we have good, consistent, organic growth. Well, the first thing is you have to know what you want, and then you've got to have the focus, the consistency, and the persistence to go get it. Because it's very easy with shiny object syndrome to say, oh, we'll go do this and we'll go try that, and we'll go do that. So one of the favorite resources that we use with our Sitkins Network members, we work with exclusive members across the country, is we really dive into the 8020 analysis now, I'm guessing when I say 80 20, the 8020 rule, the 8020 principle, that you're probably at least vaguely familiar with this idea of the 8020 rule. It's commonly known as the Pareto principles, named after Vilfredo Pareto, and he discovered this principle when he was studying land ownership over a hundred years ago. You know, the 8020 principle. It's true in many areas in life and business. Here's just a few examples. 20% of the roads produce 80% of the traffic jams. 20% of the drinkers consume 80% of the beer. 20% of students generate 80% of classroom discussions. 20% of your clothes are worn 80% of the time. 20% of employees create 80% of the problems. 20% of the sales producers generate 80% of the sales. 20% of your results come from 20% of your time and effort. You know, when we conduct an 8020 analysis on an insurance agency's book of business, there's a lot of ways you can look at 80 twenties. But on an agency's book of business, we commonly see this principle play out exactly as you think it would. When we look at a book of business, 20% of your clients, and this is for the vast majority of insurance agencies, 20% of your clients create 80% of the profits. And I'm going to talk about some ways you can do that, really simply to look at your book of business, analyze this. But just for the moment, if you buy into that principle, which, by the way, we have done analysis for many, many, many insurance agencies, and it's not always perfect, but I'll tell you, it's pretty close. 20% of your clients create 80% of the profits. Think about that. Just for a second, think about this concept. Your top 20% of clients are 16 times as profitable as your bottom 80%. 16 times. So the question I ask is, where are you spending your time? Where are you exerting your energy? When agencies ask, how do I improve organic growth? How do we grow the agency, the solution is often found in determining where they are currently spending time and energy. Let's analyze that. Where are you spending your time? Where are you spending your energy? Because not only do your bottom 80% of clients only produce 20% of your agency's revenue, but they're also more likely to move their business elsewhere. They're not as loyal, typically. Now, the bottom 80% of your clients, they typically require more time, attention, energy, and drain resources. This is very common, all while producing only 20% of your revenue. So here's what I want to help you with today, at least to think about it. And I don't expect if the first time you've ever heard this, you're going to suddenly go, oh my gosh, we've got to change everything today. That's obviously not going to happen. But I want you to think about this and really put some time in analyzing your own book of business, your own agency. Then of course, obviously, the actions you need to take. See, the problem is that most agencies don't focus on investing enough time and energy to create a wow experience for their ideal clients. The top 20%. We don't have time to do the extra stuff for those 20% of clients that are producing 80% of the revenue. Why? Because, well, we're too busy trying to Service the bottom 80%. To maximize your organic growth, your agency must be committed to understanding, understanding first the 8020 principle and then taking some kind of action. Right? You've got to take action on this. I was doing some research as I was preparing this podcast and one of my mentors and I've done a lot of work with the John Maxwell team in the past still associated with that organization about leadership. I was looking at the 21 irrefutable laws of leadership. In this book, author and speaker John Maxwell discusses three key areas when he talks about prioritization. And here are three key aspects. Number one, he says this, that busyness does not equal productivity. That goes back to the idea that, man, I don't know what I did today, but I sure was busy, so it must have been good. Number two, prioritizing requires you to have a clear vision and always be thinking ahead. See, the great agency leaders that we work with that we see, they have a very clear vision. They know where they want to go. They may not be there today, but they know where they've got to go. And they're thinking ahead. They're always one step ahead. They're not living in the past. They're not trying to recreate something that can't happen again. But they're looking ahead. And number three, this is a huge one. This is where most agencies typically stop. Prioritizing causes us to do things that are uncomfortable and sometimes don't downright painful. When you prioritize, when you say we're going to do this, guess what that means? It means that you're not going to do something else. We all have the same amount of time in every single day. And when you say yes to something, you're saying no to something else. And so that's why it's so important for agency leaders to look at where they're spending their time. All right, so let's get a little bit practical for a second. What does the 8020 principle mean for your agency? Well, the first step in understanding how the 8020 principle affects your agency is to run a report on your entire agency's book of business. It's pretty simple. Just get your whole book of business, run, entire report, list all of your accounts from largest to smallest, and then simply categorize your accounts into three areas. The very top, top 5% of your accounts are your A accounts. Those are your big ones. Right. Typically, the next 15% are your B accounts. And obviously 5 and 15 equal 20. So those would be your top 20%. The remaining 80% are your C accounts. So obviously, again, the top 20 are your A's and B's. The bottom 80 are your C's. And then when you do that, calculate the gross revenues, the percentage of revenues and revenue per relationship for your A's, B's and C's. So again, look at your A's, your B's and your C's. Calculate the total gross revenues, the percentage of revenues, and the revenue per relationship. Now, I can tell you right now before you even do this and look at this, I know many of you won't do it. But those that do it, if you're like many agencies, you will soon discover key patterns. They'll jump out at you off the page, and it's going to paint a clear picture of your agency's financial health. This is where we work with agencies and we start to dive into this, they go, ahaha, right? There's an aha moment. And they realize that the agency is not only wasting a good portion of time and energy in unprofitable accounts, but they're also really vulnerable. And I'll talk about why in just a second why they're so vulnerable. But while I don't suggest that any agency simply begin to eliminate the bottom 80%, what do I do? Now I've got my A's, B's and C's. And there's the bottom 80%. Is she telling me just to get rid of them? They're no good? They're not worth anything? Of course not. Of course not. That wouldn't be financially feasible or smart or fair to your clients. But I do suggest that every agency, when you run this report, begin to discuss as a group, as an agency leadership team, a game plan of how this account should be handled moving forward. Remember when I said earlier, prioritizing causes us to do things that are uncomfortable and sometimes downright painful. Well, here's a few ideas of this, right? Here are some examples of what some successful agencies have implemented in looking at the 80 20. Sometimes they've traded down their C accounts to newer producers. If you have a larger team, this is something you can do. You've got newer producers coming in, they're learning, they're working on stuff, they're getting their feet wet. For example, one idea would be to simply have your producers that have bigger books of business then trade down their C accounts to newer producers. And by the way, you can do an agency 80 20. You should. And also producers should all do their own 8020 analysis on their personal book of business. Okay, so trade down the C accounts. Secondly is move the C accounts from producer controlled accounts that you're paying commission on to house controlled accounts. Now I can tell you right now, some of you are thinking, my producers would never accept that. And maybe so until they understand what it could mean and should mean for their book of business. Because I can tell you, many producers, I've been there in the past, you get to a point and you can't grow anymore because you're spending all this time on accounts. And if you're willing to give up a little bit to go up, this will make sense. So again, you can move accounts from producer controlled accounts to house control accounts. And lastly, this can be the big taboo out there, sometimes utilizing insurance carrier service centers to handle the C accounts. Now some of you are thinking, oh, they don't do a good job, not willing to give a point or two. Again, look at the big picture here. I'm not saying this is all right for everybody. Everybody's got their own book of business, their own. I know you're all in different geographies and different areas, but think about some of these ideas of what you could do so you could free up your time to focus on the A's and B's. See, I know some of you right now are still thinking, well, listen, we pride ourselves in great service. The producer gives the service or our service team does. We could never give it to a carrier service center. We could never make it a house account. We will lose relationships. Well, let me ask a question. Now, every agency is different, so you obviously have different answers. But for you personally, how many of your current C accounts are currently getting proactive service today? Proactive meaning outside of maybe basic policy changes, handling renewal, processing, other reactive services, meaning we call the agency And I need something done. How are you currently adding service or how are you adding service and how are you serving these accounts? Through risk advice, through other value added services? How are you making emotional deposits into these accounts? Because people say we couldn't afford to do that. I can tell you. This is what Sitkin CEO, my mentor Roger Sitkin says, typically the C accounts are treated with benign neglect. Anyway, if you really look at it in most insurance agencies, why not find a way to begin to transfer those to places that may even serve them better while you can free up your time and your producers time to work on the better profit profiting accounts. So most agencies don't do much. And at the same time, think about this. How much more time and energy could your producers service, your producers and your service teams do? How much more time could they have if they were just focused on the A and B accounts to build relationships, provide true risk advice and they weren't so darn busy maybe putting out fires and doing some of the other things? See, when you begin to spend much of your agency's time and energy on your top clients, oh, by the way, your top clients, you know those ones that pay the most premium dollars, guess what they expect and deserve. They deserve your excellence. They deserve your very best. They deserve the best proactive service plan, which by the way, most agencies don't have a proactive service plan. But when you do begin to focus on the top 20%, you can begin to really key in on these three areas. Number one, round out. Go to your current book of business. How many of your top clients are, we call full time clients, meaning you have all lines of their business. There's often a gold mine of profitable business with accounts that you already have solid relationships with. So don't miss that opportunity. The first thing you can do is start rounding out those accounts that are profitable accounts, the A and B accounts, and make them full time clients. Number two, retention. Duh. Now, if you remember earlier I said when you run an 8020 book of business, especially when you look at the top 5%, you'll realize most agencies are really vulnerable. You will quickly realize the importance of having a true retention process for your top clients. Because I can tell you, for many agencies who run these reports, the top 5%. If you look at a book of business, the top 5% of your accounts represent 50% of your revenue. 5% of the top counts represent half of your agency revenue. So if you're not giving them great proactive risk advice and service, what's going to happen if and when you lose that top 5%, can you afford to lose half your revenue? Of course the answer is no. Number three is to replicate. So round out, retain and replicate. You know, we often hear agencies that will say, well, you know, those A accounts and maybe even some of the B accounts. We just got lucky. You know what I mean? We had an opportunity, went in there, we quoted the business. I hate when they use that term. You know, we did a presentation, all that kind of stuff, and, man, we just happened to get it. We got lucky. Happens once in a while. So how about instead of hoping and wishing that you might get lucky to get another A account or even an upper B account, why not make the effort to replicate your wins? Have time to focus on, wait a second, how do we get this account? What do we actually do? What do we offer? Maybe we can analyze and think through this process. Maybe we can replicate this and do this again. Maybe there's a niche business that we should work on. Maybe we have some opportunities that we've been missing. So again, round out, retain, and replicate are three things you can begin to do very proactively when you start to look at focusing on the top 20% of your client base. So here's the bottom line of all of this. It's been said that insanity is doing the same thing over and over and expecting a different result. I'm sure you've heard that many times. I have as well. But I can tell you, too many insurance agencies are struggling to grow organically, yet they continue to do the same things they have done for years, and they expect the results to improve. Now, in today's world of digital disruption, we hear that all the time, all the tech companies are coming, right? They're already here. We know that they're already disrupting the marketplace. So with digital disruption and the whole world of commoditization, right, it becomes a commodity for many people. Why? Well, because they don't do anything. And also, client expectations have changed. Clients expect more from you. So with digital disruption, commoditization, and high client expectations, your agency must become laser focused. Laser focused. Because if you don't become laser focused and understand your profitable accounts and what you need to do to work with them back to round out, retain, and replicate, you're going to feel like a hamster on a wheel, and you're going to keep working faster and harder and more and more and more, and you're to keep spinning that hamster wheel. And just like the hamster, guess what? You're going to be in the exact same place. What's going to happen in the next year, two, three, five years is you're going to continue to work harder and harder and harder just to keep pace where you're at. And by the way, you can't grow your agency organically by standing in the same place. So here's my challenge to you know what you want, be very clear on what you want. Go get it. I hope you enjoyed today's podcast again. My name is Brent Kelly. I'm an executive coach with the Sitkins Group. And if your agency is looking for more, you're looking to sell more, you're looking to retain more, you're looking to earn more, we have a plethora of resources and programs at our disposal to help your agency seat do just those things. Find us at sitkins. Com. That's S I t k I n S com Sitkins. Com. We hope to hear from you soon. All the best in your.