The All Aboard Newsletter

In today’s newsletter we’re going to be covering the agency’s growth results for May, we’ll teach you about how we deal with an underperforming rep, and we’ll talk a little bit about why I’m maniacal about quotes.

Lets take a ride!

Growth Update!

We’re coming off our best month ever, and hot off a three-month tear on NB where we finished with 865, 843, and 994 items respectively.

After April, we were roughly 75% of the way to maxing our P.G Points needed for 4.0 on Y.E Bonus.

However, oddly enough, none of those points came from Auto insurance as we we had 0 variance .vs. Prior Year End.

That all changed after May when we wrote 994 items.

We are happy to say that we have officially passed our 14k Point Goal by hitting 20,274 points to the positive through 5 months.

From April to May, we grew by $790,417! Woah!

Our expectation is that we continue to grow by about $500,000 per month for the rest of the year and (hopefully) continue to build the sales team towards 24 LSPs actively selling to accelerate that growth.

But, as usual for us in 2023, we’re not truly on pace for a bonus due to one thing: Loss Ratio

I’ve been hearing about agents Loss ratio’s creeping up increasingly as the years go by.

Ours has risen every month in 2023 and is still going up. We’re starting to realize that if we have one or two more months with high losses, we won’t have a path forward for bonus.

Ouch

We’ll see if our tactics we’ve put into place work to help reduce loss ratio, but there are some things we just won’t do to get below the 68% mark.

Things like writing lower limits so the attorney’s have less to take.

Things like writing a $2,000 deductible to lower the amount of claims

Thinks like not offering Platinum coverage because it keeps “bad business” on the books.

We want to hit our bonus, but we’re not going to do it at the expense of giving our customers bad advice.

Hopefully it works out for us, or hopefully the company changes something.

Either way - We’ll keep doing what’s best for the client.

How to deal with an underperforming employee

We’ve all been there

Someone on our team who has been a top performer isn’t producing or performing like they used to.

Maybe, its someone new who got off to a solid start, but hasn’t built on it.

Its frustrating right?

So what to do?

There are a lot of ways to handle this type of situation.

Unfortunately, many of the easy things to do, are also the wrong things to do.

There is a quote that I absolutely love that says:

“Do the right hard thing, not the easy wrong thing”

It is easy to micromanage that person in hopes they get their numbers up.

It is easy to be frustrated with that person because you’re relying on them and they’re not hitting your expectations.

Its easy to just fire the person and start over so you don’t have to deal with it anymore.

But those are the wrong things to do in this type of situation. Those have long-lasting consequences on the business, not just for the employee in question, but everyone else and the culture too.

But don’t get me wrong - I’m not underestimating how much underperformance hurts the business.

Our goal should be to operate the business in a profitable and sustainable way. People underperforming actively contradict that goal.

Most of us have built our compensation plans and expectations around employees hitting goals that allow us do to just that.

So when someone isn’t hitting goals, we know it hurts our bottom line.

We also know that it hurts the culture of the business because if Sally can get away with not hitting goals, maybe its ok for everyone else to miss goals too.

Negativity is contagious but so is positivity

Mediocrity is contagious but so is excellence

Low energy is contagious, but so is high energy.

So if we’re going to build a culture - we need to have the right people, with the right attitude, the right skills, and the right work ethic.

So what to do about the problem?

Many people don’t have a standardized process for dealing with underperformance.

But why does that matter?

Think about all the emotions your feel when someone isn’t hitting goals, has a bad attitude, isn’t doing what you ask, or anything else that doesn’t fit with your culture.

Frustration, Anxiety, Disrespect, Anger, Helplessness, and Disappointment are just a few that might come to mind.

When you’re feeling those things you might be too impulsive and just fire the person, or maybe you fall into paralysis by analysis and do nothing. Or even worse, maybe you’re passive aggressive or pick at them until they quit because you’re avoiding the issue.

These tactics are not the answer.

So, we need to find a win-win scenario, and we do that through a formal Coaching Plan or Performance Improvement Plan.

Look - Nobody wants to put someone out.

Times are hard, money is tight for everyone, and these are real people that are part of our team that have families and needs to provide for.

Using this type of process gives the employee very clear expectations and time to get things back on track.

For you, it gives you something in writing that you can refer back to and an opportunity to collaborate on how you and the employee will work together moving forward.

The best part about the plans?

They’re fully customizable for anything you need to use it for.

Someone not hitting goals? Great - use a plan.

Someone out of pattern on compliance? Awesome - Plan

Bad attitude or Gossiping in the office? Plan!

From an HR perspective, this also has the added benefit of covering your ass and ensures that you’re doing everything you can to be fair to the employee in question.

The only difference between a Coaching Plan and a Performance Improvement Plan in our agency is that the latter equates to a job-in-jeopardy situation. A coaching plan will turn into a PIP at the end of 30 days if goals are not hit.

How to lay out the Coaching or Performance Improvement Plan

The first and most important aspect of the coaching/performance plan is how you handle the delivery.

The person being put on the plan is likely to be fearful that you’re just going through the motions to fire them. For most of us, we’re in at-will states.

So its important to tell them that we’re not putting them on this plan so we can fire them. Quite the contrary.

We’re putting them on a plan because we want them to improve, succeed, and continue growing within the company.

So once you get that out of the way there are four parts to the plan:

• Expectations vs Actual Performance

• What you need to see from them

• What they want from you to help them be successful

• A set duration of the plan, check-in frequency, and automatic thresholds that if triggered end employment

Part 1: Expectations

This is the reason they’re going on the plan in the first place.

They’ve fallen short of your expectations and they need to be remedied.

So before you put someone on a plan, ensure that expectations are clear and understandable. If you hadn’t made them clear, it may not be fair to hold performance against them.

Review the expectations, show them where they fell short, and get alignment.

Part 2: What you need from them

This is your turn to tell them the types of behaviors or actions that you want to see from them.

Whether it’s changing a process or method that they’re performing, or adding new requirements around activity or talk-paths as ways to hit the goal - this is where you define those needs.

What your role should be as the leader in this portion is to lay out activities and behaviors that if done properly, lead to the results you expect.

Build the road for them to go down, and then hold them accountable to do it

Part 3: What they want from you

So you might be thinking - Wait a minute, why do they get to ask anything of me?

Well, because if the exercise is collaborative, you’re more likely to get buy-in.

Nobody likes to be dictated to. Not you, not them.

So express to them, that you’re willing to do what it takes (within reason) to help them succeed. This is you putting your money where your mouth is.

Ideally they ask for help on something that slows them down, asks for more training, or more insights on where they can improve.

Do your part and let them hold you accountable too.

Part 4: Duration, Check-ins, and Thresholds

No Performance or Coaching plan is worth anything if it doesn’t have a time-frame established.

We typically recommend a 30 day plan with weekly check-ins for “on-pace” progress towards goals.

Additionally, you want to put thresholds in that result in automatic termination.

For instance, if its a salesperson you could say:

“In any day that salesperson does not hit 10 quotes or 150 outbound calls for the next thirty days, that will be the last day of their employment.”

This is you establishing a boundary and expectation to change.

Final Thoughts on Performance or Coaching Plans

When you put people on performance/coaching plans, you’re going to get a few persons who quit shortly there after.

Thats ok. They were never going to do what you asked anyways.

But more importantly, you’re going to get a few people who put their head down, ask for help, buy into the plan, and get back on track.

We’ve seen it a bunch of times. Its a wake up call for them - Get serious, or get out.

Its us saying “We like you, we see your potential, but you have to do the work to succeed.”

True story, one of my top producers went on a PIP for compliance. Our Sales managers were nervous to even do it.

“We don’t want to upset our top producer” they said.

Guess what? The producer took the plan seriously, changed their process, and haven’t had a compliance issue in the 22 months since.

When this happens, its an amazing example for everyone on your team that nobody is above expectations and/or the rules.

It also shows that we don’t use plans as an excuse to fire someone. It serves as a wake-up call and a chance to get extra help from their leader.

So a few quick tips when using PIPs:

• Put automatic PIP thresholds in relation to Goals in writing. Get the producer to acknowledge it in their new-hire paperwork, and when they actively start their role.

• PIPs should never be a surprise. Everyone should know where they are .vs. where they should be throughout the month.

• If it comes as a surprise, you’re failing as their leader and on their 1:1s/Check-ins. Accountability is a daily thing, not a first of the month thing.

• Make sure the PIP’s address the root cause of the problem, not the symptoms. Its our job as leaders to help them get where they need to go.

If you’re interested in our PIP Template, shoot me an email as a reply and I’ll happily share it!

On my mind this week:

Quotes, Quotes, Quotes

If you’ve been following anything I’ve written over the last few months, you know that Quotes are always on my mind.

Why?

Simple!

They are the #1 activity that leads to an increase in sales volume.

Putting on my math hat, we’ve seen that Quotes correlate to sales at roughly 93%

So what does that mean?

If you increase Quotes by 100%, then sales will increase by 93%

So if I currently do 100 quotes a month, and run a 20% item close rate, I’ll get 20 items.

So, using the math, if I increase quotes 100%, from 100 quotes to 200 quotes in a month. I can expect my item sales to increase from 20 to 38 (20 × (1 + 0.93).

Phone calls, and talk-time are great, but they just don’t move the needle the same way. Don’t get me wrong, I use those metrics too, but they ultimately don’t matter much to me if the team is hitting the quote goal.

I think most of us are focusing on leading indicators, just make sure you’re focusing on the right leading indicator.

But how do we think about doubling or even trippling our quotes?

Well, the cheapest, easiest, AND fastest way to do it is through quoting more lines per HH aka bundling.

Lets check out this scenario for a minute:

Lets assume you primarily market with Direct Mail, and it costs about $100 to make the phone ring. Thats about $100 per quoted HH.

• Quote 1 Line —> Cost Per Quote = $100

• Quote 2 Lines —> Cost Per Quote = $50

• Quote 3 Lines —> Cost Per Quote = $33

So you can quickly see how bundling can help you achieve greater economic efficiency.

But time is also a factor that we can’t ignore.

If I want my agents to perform 14 quotes per day, is it realistic for them to get 14 people on the phone and quote all 14 properly in an 8 hour day?

I’m not so sure.

How about 7 people quoting 2 lines each? Sounds more hittable.

What about 5 household with 3 lines quoted each? Easily.

You get the point I’m making.

So not only does a focus on increasing quotes per HH:

• Increase the amount of sales you get (Increase Quotes + Correlation)

• Decrease your cost per quote (Higher ROI)

But it also gives you vision into the future.

The future? Huh?!

What I mean is thatt the quotes you’re doing today, will most likely affect you more in 3-4 weeks than it will this week.

We’ve seen that the sales cycle (the time from quote to buying decision) sits around a median of 21 days.

We get plenty of people who buy on the first call or first day, and plenty of people who buy 180 days down the line. But these are largely outliers.

A 21 day sales cycle means that a bad quoting week today, will lead to a rough sales week next month.

My team has slowed down on quotes considerably this month (We’re down 15% - EEK!).

Thats concerning because while we’re trending for 800+ items this month, I’m afraid July might not be so hot.

But the question is “Why have they slowed down?”

A few factors have had very small effects, but combined, cause some turmoil in the overall marketing and sales plan.

We’re seeing:

• Summer PTO from families going on trips

• Burnout from three hard charging sales months where we wrote roughly 2,700 items.

• Low “extra” quotes compared to other months are dragging down item production without affecting premium much.

• Less internet lead availability due to greater market conditions (Lead providers have slowed their efforts due to carrier pullback in multiple states).

So, we’ve got some work to do.

We’ll be re-focusing our team on a three-line-mentality again.

That mentality means that we always quote Property + Auto and then add a third line. That third line can be an Allstate product, and Ivantage Product, Pet Insurance, or Life Insurance.

There is almost never a situation where someone doesn’t have at least one opportunity for a third line.

But I’ll leave you with this math.

Here is the compound effect of bundling and an increase in quotes.

We generate about 120 Live transfers (1 Transfer = 1 HH) from our SDR team to our sales people every day. Here is what the item projection looks like at 1, 2, and 3 lines quoted respectively every time on a 21 day month, and a 20% baseline close rate.

1 Line = 504 Items

2 Lines = 937 Items

3 Lines = 1,300 Items

So, yea….

Increase your quotes. Even when your close rate drops (It will), you’re going to get more than you had before.

Andrew’s Picks

This week, I don’t have any picks. Between getting back from Hawaii last week, and a few presentations and projects that were on deadlines this week, I didn’t have time to scour the internet for some gems to share.

However, I will put a link below to a presentation I did in conjunction with Everquote this week.

In it I talk about some of the best-practices I recommend with Internet Leads, I do some myth busting, and I give you a few things to think about to take your Internet Lead process to the next level.

Its about 40 minutes, and works well as something you can listen to, though there is a deck involved that I’d be happy to share with you.

Just reply to the email if you’d like it

Here is the link: Scaling with Internet Leads

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

See you in two weeks!