The All Aboard Newsletter

In today’s newsletter we’ll be covering our April Results, What we’re working on in the Agency, and share some resources that you might find valuable.

Lets take a ride!

April Results + Breakdown

Above: Established Books

Below: ECP Book

March was our 2nd highest producing month of all time.

Going into April, we expected a slight backslide.

Its easy to set records in a 23 day month.

Not so easy in a 20 day month

But set new records we did!

In the end, we finished with:

• 845 Items

• $1,096,000 of Annualized Premium

• 4,019 Quotes

So how did we do it?

To be honest, less finesse and more brute force. We quoted like fiends! Close rate was just OK, and its clear we still have some work to do!

In the image above, you can see production, quotes, and close ratio by line of business. It is important to note that we use Item Close (Items/Quotes) for auto insurance, rather than policy close.

We do this because we feel it is a better predictor of future outcomes. We want to know how many items we get for every 10 quotes we do.

Our blended Item Close rate across all lines finished at 21% for the month of April.

So, how do we quote and bind so much?

We have an amazing team, with incredible talent at every level.

Our Sales Organization is made up of 30 people.

• 1 Sales Director

• 2 Trainers

• 4 Managers (3 Sales and 1 for SDRs)

• 6 SDRs (Outbound Call Reps)

• 17 Sales People

We look at our sales organization in a holistic way. We don’t ask how a trainer pays for their seat, or how a manager justifies their existence.

Instead we look at where we’re trying to go from a production standpoint, understand the revenue that production generates, figure out our optimal break-even time frame, then work backwards on staff from there.

Having trainers has been invaluable.

Is it easier to find two salespeople who can sell 100 items?

Or is it easier to have two trainers get 17 salespeople to increase their production by 15 items each?

For us, the answer is easily the latter.

While we’re slightly overstaffed on the management front, it is with a goal in mind.

We aim to be at 25 Salespeople by the end of the year. That means each manager will be responsible for roughly 8 people.

Sometimes, you need to take one step backwards to go three steps forward. That is why we added the third manager BEFORE we needed them, not when we needed them.

Growth can happen all at once, and we’re rather lay the groundwork and build into it, than have to forego growth because our managers didn’t have capacity or got burned out.

Marketing

April marketing was focused on efficiency.

Throughout the year we’ve been trying to take an “omnichannel” approach.

What that means in simple terms was that we were trying to find prospects and customers wherever they were.

However, given our recent rate increases, and subsequent drops in retention, we’ve had a slight strain on cashflow.

So, we stuck with what we excel at: Internet Leads

We had been sending mail, buying live transfers, running FB and Google ads, and while they were working, the Cost Per Acquisition was nowhere as good as what we could achieve through internet leads.

So we put everything else on pause and as a result, our spend looked something like this:

• $40,000 in Internet Leads

• $5,000 in Direct Mail to our Monoline Customers and Prospects with companies that have recently taken rates

• $5,000 to DRIPS for their follow-up help

As a result, we wrote 845 Items and did it at a Cost Per Item of $71.56

May Goals:

Every month, our main goals remain the same: Write 800+ Items for $1mil+ in Annualized Premium.

However, we like to set some secondary goals that help feed into the overall directive of the team. So for April, we set these goals to help us continue growth and improve our overall book-health.

Goal 1: Sell at least 100 Items that fall into the “Extra’s Category”

Goal 2: Improve Home Closing Rate from 13% to 15%

Goal 3: Add Platinum to 50 Current Client Policies

While we bundle Property and Auto at roughly 90%, we have a lot of work that can be done on finding everything else. We are taking a “Three Line Mentality” this year, and are spreading a ton of awareness around all the products we sell. While I’d love to tell you we crush these extra lines, we have been averaging around 60 items in this category per month. I know some agencies that do 50+ PUP alone!

Our second goal is focused on improving efficiency around Home Insurance. The 37% commission we get on a NB bundle home policy is no joke at all, and the more homes we get, the more money we make. While we closed Home’s at 15% in April, we’re around 13% on the year. Given our quote volume, a 2% lift would have resulted in:

• 100 More Home Policies

• $156,000 More Premium

• $57,000 more Revenue

Last, the Platinum goal is there to improve the overall Lifetime Value of our customers. You can increase Lifetime Value by increasing how much a customer pays, how long they stay with you, or both. We’ve noticed that our surcharges in GA are especially high, and following a claim, many customers leave. This is a pure Retention/LTV play that we hope pays off for us.

On my mind this week:

Loss Ratio

We’re four months into the year… wow!

Where does the time go?

Unfortunately for us, we missed our quarterly bonus (OUCH).

And…. we missed it on a technicality aka LOSS RATIO!

So naturally, thats what is on my mind this week.

I’m digging in with our team to find out what we can do (if anything) to improve our loss ratio moving forward.

We’ve heard things like “Just grow and it will be fine” or “Write higher limits and it will be low”

Except neither of those things are true.

We write high limits, and are growing. If anything, we think higher limits could actually make it WORSE because its expanding the amount of $ that can be paid out.

But, there is no use complaining about it. We have to focus on the actions we can take to fix it moving forward.

Here is where we’re starting:

• We’re visualizing our Loss Ratio Detail Reports to see what is falling off, and what is being added each month. This lets us forecast if we can “outrun the loss” by growing.

• Changing our claims process to encourage customers to always call the agency first if possible, and giving more guidance around whether or not to file a claim. Admittedly, we have been just sending people directly to claims.

• Pulling every single Cat event for the last two years, and checking our losses against those dates to ensure nothing has been misclassified as non-cat (Cat losses don’t count against Loss Ratio!)

• Looking at our biggest losses to see if we can noticed a trend around IS score, Homeowner vs Renters, More cars than drivers and more.

I believe that the losses are largely fueled by inflation due to rising costs of parts and labor.

Something I DON’T believe:

That internet lead customers are the ones driving the loss ratio up.

Check your own data, because it might be true for you, however….

We have never had a loss ratio over 68% in our five year history until this month

And 90% of our growth has been fueled by leads.

Rather, I believe that inflation and our lack of our internal agency processes around claims are why we’re in this situation.

So we’re going to keep researching, and look inward on where WE can improve as an agency to fix this.

Given its importance to our Y.E Bonus, Loss Ratio is something that will garnish a lot of my attention in the coming months.

Andrew’s Picks

How confident are you in your interview process? Here is something to think about: Link

Are you trying to develop a manager? If so, consider talking about the 6 levels of delegation with them: Link

Do you struggle to make decisions? Being Decisive is a super power. Tony Robbins says its even the #1 key to success: Link

Have a question you want me to answer in the next newsletter? Submit a question here: Link

What did you think of this week’s newsletter?