To Get Profit You Must Get ProFit

Welcome, welcome, welcome to the Agent Leader podcast. My name is Brent Kelly. I am your host. I am honored. I am delighted that you are with me on today's episode and really excited to dive into very tangible material, tangible content that you as an agency leader can use. And I want to share some things today with the podcast listener. You, the podcast listener, some things and ideas that we work directly with our private client group at the Sitkins Network around. And the idea and the concept is that for your agency to earn profit, which, by the way, profit's a really good thing. Profit is not just what you make. It's not just the revenue that you bring in. It's what you keep, not what you make, what you keep. It's the profit to earn a great profit. And by the way, profit provides what freedom, it provides opportunity, it provides all kinds of things. But to get more profit, you need to become profit. And profit is a short phrase that we use for professional fitness. And if you've watched any of my LinkedIn videos or things that we throw out there, I always talk about having a profit tip, and people are like, is it profit? Is it profit? Well, it's both. That's kind of what we do. It's a play on words. And to get profit, which is pro capital, F I T. Right? When you get profit, you get profit, which is typically just the word profit, P R O, F I T. And so I don't want to confuse you with that, but I do want to share some of the main ideas and principles that we use with our private clients to help them get professionally fit. You know, just like any athlete, if you think of. We always think of fitness as in physical fitness, but there's mental fitness and there's agency fitness. As I'm going to talk about today, it's about, you know, coaching and training and building those right type of habits and routines and just being focused in the right areas. And just like physical fitness is that if we allow bad habits to get in the way, if we're not focused with an end in mind, if we're not doing the right things, we need to do well, we get out of shape. We get out of shape, and we don't perform at the highest level that we could and we should perform at. And so on today's podcast episode, I'm going to talk about again, the different areas of professional fitness to help your agency gain more profit. So, hopefully, if you're listening to this and you're an agency leader of any capacity, remember, leadership is influence. But if you're an agency leader. Listen to this. And you say, you know, I would kind of like some more profit. Well, this is probably worth another, I don't know, 10, 15 minutes of your time that I'm gonna go through in today's episode. So let's start from the beginning. We talk about professional fitness. There was a really good TED Talk years ago, and I'm sure you know the smart listeners of this podcast, so many of you agency leaders out there follow things and always trying to learn and grow. You may have seen a TED Talk by Simon Sinek that was called the Golden Circle, which really was around Starting with why, which became a book and a movement of Start with why. So obviously this is an audio podcast, but I want you to visualize when I get into this, three concentric circles, right? So you got your circle in the middle and then a circle around it and then a circle around that. And that's what Simon drew on the, on his little flip flip folder or whatever that he had for his TED Talk. Because I think it works much the same way in professional fitness for agencies. I think it's very easy for agencies to start, in many cases with the wrong things. So all the things I'm going to talk about today are important, but I think it is really impactful to understand that there is a heartbeat, there's a center, there's a why that I think every agency must really identify, understand and apply, or everything else around it just doesn't carry that much weight. It's not very impactful. So let's start with the middle circle. And again, you could draw this. If you're sitting on a table, just draw a circle. And if you're not, if you're driving, just imagine a circle in the middle and write why on that. What's your agency's why? Simon Sinek said so great in his TED Talk is why do you get out of bed every morning? Why should anybody else care? And to us, when we look at professional fitness for agencies, one of the first things we're going to talk with agencies about with your why is what really is the agency's vision? What really is the agency's mission? What do you really want to accomplish? What are you all about? What is impactful? What is your purpose? What is important to you and what is not important to you? Because when you understand that, the heartbeat of every agency, and if you've got enough room on your circle, you've got written Y below that or somewhere, I want you to write C of a, C of A and that stands for culture of accountability. Having a culture of accountability. I don't care what systems your agency has in place, what technology, what processes, all those are important, don't get me wrong. And I'm going to talk about some of those on today's episode. But if you don't have a center circle, that's a true why, a vision, mission critical success factors that we're going to have as an agency that revolve around having a culture of accountability. And by the way, culture of accountability is two words, right? Actually it's three, but two main words. Culture, which are just the normal language and behaviors of your agency. Culture is one of those things that's hard to define, but it's easy to see. You can walk in somewhere and go, that's probably a good culture. And that's probably not a good culture. If you spend some time in places and I can tell you in talking to agencies and going inside of agencies, you can see it pretty quickly. So what are the normal language and behaviors of your agency? That's the culture. That's the way that you do things. And the second part is accountability, which says, are you going to do what you said you were going to do? And by the way, accountability works both ways. People think accountability is, well, okay, I'm the leader and I tell the people what to do and they should be accountable. Well, yeah, that's one aspect. But you also need to understand as a leader what you do and your team needs to hold you accountable. Leadership is influence. And every person in your agency in some capacity is a leader because we all have influence and we have to be accountable to each other to have greater influence. So this centerpiece, this culture of accountability is one of the first things that we work with our private client group on to really identify how is the culture of accountability, what do we need to do? Because here's the reality of a culture of accountability. This is not an event, is a process, and this is a never ending process. Culture and accountability never end. But you do need to start and understand that we've got to start somewhere. We've got to figure out what that really is, what our agency is all about. And we have to consistently communicate that to our team over and over and over and over and over again. I have never seen an agency, I've really never seen a business that over communicates. Oh, they know it, they've heard it before. No, you got to say it again. Your job as a leader is to say, this is who we are, what we represent. These are the normal behaviors. And this is not going to go away because if you try to introduce a new process, if you try to introduce a new way of doing whatever it is, I'm guessing that most people freak out in your agency, but they also probably say, ah, don't worry, this too shall pass. They'll forget, they'll move on to something else. They'll be a new shiny object. So that's why in the center circle that, why that culture of accountability is absolutely essential for your agency. You've got to know exactly who you are, what you stand for, what you're going to communicate, because everything else around it just becomes really noisy if you don't have that centerpiece. So at the very center is culture of accountability. Now, the next circle around it is, I would say is the how, which we look at in professional fitness for your agency to professional fitness to be professionally fit, first of all, you got to have that center heartbeat. That why the next is, well, how are we going to do this? What's going to be the structure? What's going to be the model? What are some models that we can use? Now, two models that we work with our agencies in depth on, number one is 80 20. And if you've heard me speak anywhere or some of these previous podcasts, you've probably heard me talk about the power of 80 20. It goes back 100 years and I'm sure many of you have heard this, that 20% of something leads to 80% of something else. It's Pareto's principle. We look at agencies. There are a lot of areas of 80 20, because here's the thing, there's a lot of things you can do as an agency. There's a lot of things that you probably are doing as an agency. The question is, are most of them actually getting you results or are they just making you busy and frustrated and tired? So to understand what are the vital few things that our agency must focus on to get the best bang for our buck? Right? Our time, our energy, our money, all the things that we're looking to do. Let me just give you three really quick examples of 80 20. Number one, I can tell you with most agencies, and again, depending on the size of your sales team, but one example is I can tell you that 20% of your insurance sales producers produce 80% of your agency's revenue. And oftentimes we get stuck in working with those non performers. The squeaky wheel gets the grease. And not focusing on how to empower and coach our best performers that are already doing stuff they just even want more. I can tell you that 20% of your insurance carriers produce 80% of your revenue. It's a good chance. If you don't believe it, just go run the numbers. You have all these insurance carriers, we've got all these companies, yet you've got so many carriers that you probably have 1, 2, 3 accounts with that aren't producing much. Think about the contingency opportunities that are there, just the relationships that go with that. I can also tell you, this is one we stress a lot, is that 20% of your clients produce 80% of your revenue. So how do we build better relationships to 20%? How do we replicate that top 20%? But when you find that 20% that drives the revenue, again, it gets you very focused on doing the right things. I would much rather have you do less of the right things. Right. Do less of the right things than do more of the wrong things. But that's what happens with most agencies. Well, this is how we have to do it. No, it isn't. Look at your 80, 20 and be honest with yourself because that's going to determine where you really want to go. And again, it's about being more, not just more consistent, but more intentional with your time, your money and your energy. The other model that I want to share, the other how is 30, 40, 30, 30, 40, 30. Now you don't have to necessarily agree with this, but this is a model that we use. And I can tell you agencies can achieve this model. And maybe for you, you're close, maybe for you, you're way off. But it's something that we look at and go, boy, if you can get to this model and again, you can, it can be extremely powerful for your agency's long term future and just give you freedom and opportunity. 30, 40, 30 looks like this. We want to see agencies have a 30% profit and some of you are going 30% profit. How do you get a 30% profit? Well, I'm going to share a secret that my mentor and CEO of Sitkins shared many times. And by the way, this is tongue in cheek and a little humor. How do you earn a 30% profit? Well, here's the secret. You only spend 70%. You only spend 70%. And so how do you spend the 70%? Well, there's a few different ways you could do it, but the model we use 30, 40, 30 is 30% profit. 40% of service expenses, overhead, lights, heat, you name it, all that stuff is out there. And the last 30% of your expense is in sales. Right. In sales. Now, I don't have time to dive deep in how we do all that, but the idea is, what's your financial model? I guess that's my question for you. We have a financial model we help agencies with. What's your financial model? Do you have one? Are you aspiring to something? Because remember, at the very middle of the circle is who we are, right. And our why and our purpose and our culture of accountability. The next one is what are the models we're going to develop to get to that which leads to the last circle. And this is where most people start is on all the what we have to do. And they flail around and they've never realized a model to achieve to. So they can't measure or monitor anything. They don't really have a culture of accountability. So even if they try stuff, it doesn't really hold. It doesn't stick. But let's talk about that. So you've talked about culture, about culture of accountability. You've looked at some financial models, models for your agency. Now it's what do we have to do? And I'm going to talk about just four things. And again, with the time today, I don't have time to dive into all of these, but let me just give you an overview so you can begin to think about maybe your agency. How are you performing in these areas? Number one, let me just use an acronym, tss, Time Spent Selling. The problem with most agencies is that they're sales producers, which, by the way, the definition of a producer is one who produces. Now, I know we get caught up and, well, we call them risk advisors or account executives. Great. You can give them whatever name you want. Love it. But at the end of the day, their job is to go out and build relationships with future ideal clients and make them become clients. That's really what it's about, right? We can't have a sales agency if we don't have salespeople doing sales things. And we could talk a lot about sales and the reality of what sales is, but we all know it's helping people, right? It's doing the right stuff. But we've got to get in the game. And that's why one of the first things we look at is what is the time spent selling? And are we having our salespeople do sales stuff and our service people doing service stuff? And are we having our salespeople empower and equip our service team and vice versa? Because again, that goes back to accountability both ways. Sales is not better than service. Service Is not better than sales. We are a team, but we've got to get our salespeople out. And time spent selling. I can tell you most agencies we look at, at least we start to talk with, are spending way less than 12% a week. Now you look at 168 hours in a week, are spending less than 12% of their week in actual sales or sales related activities. So we've got to really understand how do we move our sales team from being busy and activity based to results based. So number one is time spent selling. Number two. And this is pretty broad, this can be generic. But let me just spend a couple minutes on this. The customer experience, the client relationships, have we defined what that really is? Now to go back to the 80, 20 and we look at the top 20% at a minimum, our agency better have a true client experience. It's defined in our top 20% because it produces a lot of revenue for our agency. And most agencies I initially speak with go well, yeah, you know, we start working the renewal 90 days out. I want you to remember this. It's really important your agency gets rid of the mindset. The idea of renewing accounts. I want you to stop renewing accounts and start continuing relationships. And that begins on day zero. In fact, it probably begins on day negative, whatever it is. When you start the initial conversation with a new client. Have we defined their expectations for you and the agency? Then from there, are we gonna proactively and intentionally meet those expectations? And we go very deep with our clients in a continuation process and relationship management. We talk about five exit barriers to put together. But we've gotta have something defined. So that really is all about the client experience. So time spent selling is one of the. What's client experience is another one. Next is the complaint we hear all the time or we've gotta build our pipelines. Yeah, one of the best things to do is build your pipelines. I believe that revenue doesn't solve all your problems, just most of them. So one of the first things we have to do is let's talk about our pipeline. Do we have an agency pipeline? Do we have a producer pipeline? What does that look like? And our, you know, when you dive deeper from a model into our what and some of the strategies is that I believe that if you market to all, you market to none. And to go back to that center circle, that culture of accountability, what does your agency really stand for? And then you go into the 80, 20 and the top 20%. What do our best clients look like? And what do they do and why do we get business with them and what's resonating then we can start to identify within that and I truly believe in specialties and niches is have we identified our future ideal client? Not suspects, not prospects, but future ideal client. Speak their language, become the expert in their lives and in their world to be able to communicate not on your terms, but their terms. They expect you to know insurance and risk management, but you've got to understand their business or their lifestyle, whatever it is in the business, or personal insurance, whatever one you work in. But we've got to understand the future ideal client. In fact, we work with our clients very closely in developing a top 20 list, specifically who they would be and having an account strategy plan around that. But that's one of the big what's and the last what is an agency selling system? So now we've got, we've talked about time spent selling, which is productivity. We've talked about a client experience because if you're not, by the way, before you develop a really cool sales process, you should probably take care of the clients you already have with the client experience. We've talked about, you know the next what it's okay how our pipelines looking, what are we doing there? And lastly is what's our agency sales process, our agency selling system, do we have one? Or is our process like many agencies which is look, copy, quote, pray, look at your policies, copy what you have. We're going to go out and get some quotes because you know, we got all these companies and then we're going to pray that you don't take it back to your current agent. So we've got to have some defined agency selling system that's unique, that allows for flexibility with your people, but without delusion that we don't lose who we are to change the conversation from transaction and quoting to risk advice and relationships because it's a relationship and risk advice business. The problem is most agencies and producers don't take the time to figure out how to have a compelling message, ask the right questions and have a process around that actually does truly change that conversation. And they fall back into quoting and transactions. And then we say well it's just a commodity business, you know, it's just a tough game. We gotta do our best. So those are the four what's agency selling system, pipeline, customer experience and time spent selling. And you move inward on the circles. The next is what is your model, what is your how? Well two that I shared is 80, 20 really understanding where is the most impact in your agency and also having a financial model that you can look at and figure out, are we going the right direction? I mentioned the 30, 40, 30 model. And at the absolute center of the heartbeat is your culture of accountability. All those things put together, that's professional fitness. And it's no different than physical fitness. We've got to have a why and a purpose. We've got to have a how. How are we actually going to do that? And what do we actually have to do? Because to me, every agency look at fitness, physical fitness, professional fitness, agency fitness. It's really about intentionality. Where do we want to go with this thing? What are the consistent habits and behaviors we need to instill to do that? And then what's the environment? How are we going to be accountable to actually getting that stuff done? If I have some intention to go do something, I start to figure out habits, but I have no accountability partner. Guess what? I'll quit. And that's the problem that happens in most agencies. So that is professional fitness. If you do those things, profit comes. What does profit give you? Freedom, opportunity. And you avoid the traps that hold most agencies back. Now, I'll tell you this. If you're an agency that's committed to growth, if you want to take some of these concepts, if what I've shared today with you makes sense, and you go, you know, there's something there. Now we have a limited opportunity and we have a private client group, you'd have to apply to this. But if you're interested in your agency kind of taking to that next level and really taking advantage of some of these things and having resources and tools and coaches to go with that, to help you execute, to get you where you want to go. Love to hear from you. You can go to sitkins.com is our website. You can reach out to me directly. Brentidkins.com is my email. Love to hear from you, but we just really want to help you. And that's my belief on this podcast. Whether you ever do business with us or not, I'm hoping today there's value here that you gain, that you go, you know what? There's something there that I need to do. And again, if you want to take it to the next level and work really closely with us, be surrounded by other agencies that are committed to growth and there's a mastermind and networking around that I would love to hear from you. So one last favor. I always ask if this podcast has added value to you. I hope it has. Please go to itunes or wherever you're listening. Leave a review. We appreciate that allows us to spread our message, help more agencies get better results. So with that, thanks for listening to the Agent Leader podcast. My name is Brent Kelly, and I wish you all the best in your success.