The All Aboard Newsletter

Aloha from Hawaii! We’re here on the Allstate Pinnacle Elite Trip sending good vibes!

In today’s newsletter we’ll be covering our May Results, our Activity expectations, How we’re navigating a hard market, and share some resources that you might find valuable.

Lets take a ride!

May Results + Breakdown

Above: Established Books

Below: ECP Book

In May, we were expecting roughly 900 items based on our forecasts.

Instead, we put up:

• 993 Items

• $1,281,000 of Annualized Premium ($837,470 Written)

• 4,630 Quotes

That is a record in all three meaningful categories for us: Quotes, Items, Premium.

We were able to break 800 items in April on what I referred to as “brute force” aka high quote volume.

In May, we kept the momentum while working on close rates.

We know that Quotes and Sales are correlated at roughly 0.90 for our market. That means, if you increase Quotes by 100%, then sales should increase by about 90%

In this case, we increased quotes by 15% and increased sales by 17%

So how is that possible? Wouldn’t that be a correlation over over 100%?

The reason is that we drastically improved our quote volume on high close rate lines such as:

• Landlord

• Specialty Auto

• Boats

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.

So as you can remember we had three main goals for May:

1.) Hit 15% Close Rate on Homeowners - MISS

Our goal was 15% close on homeowners policy in May, but we fell just short landing at 14%.

We were able to increase our Homeowners quotes by 6% in May from April which allowed us to write more Home in May, than we did in April with a similar close rate.

15% remains the target. We left 13 items, $21,000 in premium, and $7,700 in revenue on the table.

2.) Add Platinum coverage to 50 Policies - MISS

We made a hard push for platinum in May.

We finished with 38 Platinum upgrades, and 14 Gold upgrades.

Some people think Platinum is amazing, some think its not so great.

While it might actually make our Loss Ratio challenge harder, we believe its the best thing for the customer.

This is because of the surcharges we’ve seen as we’ve analyzed our claims. We’ve seen instances of $350 Property Damage payouts causing $1,000+ surcharges every six months.

When your client could pay $180 for platinum or $1,000 for surcharge, the answer is pretty clear what we should do.

So as we see these surcharges come in, we’re sharing stories with the team about our clients.

As a result, belief in platinum is growing, and upgrades are rising.

3.) Write 100 “Extras” - HIT!

Hitting 100 extra’s (aka EBs) is something I’m incredibly proud of

While some agencies write 100 PUP in a month alone,

We’ve always been hyper-focused on property and auto

Coming into 2023, we wanted to instill a Three-Line mentality with our producers.

Last year it was all about increasing our bundle rate. We started 2022 at 60% bundle rate on NB, and finished over 90%.

This year, we wanted to go from getting three-lines roughly 5% of the time, to 35% of the time.

While we’re not there yet, we’ll continue to push for three-lines as often as possible.

It won’t happen overnight, but breaking 100 items in extra lines was exciting for us.

Just to put it in perspective, these extra items added over $15,000 in revenue for us that we wouldn’t have gotten otherwise this month.

What could an extra $5,000 to $40,000 of revenue do for your agency?

Activity Goals of our Team

We’ve gotten a lot of questions about our team’s daily expectations.

Last month, I covered the breakdown of our team size, management structure, marketing spend, and how we approach sales.

This month, we’ll give you a look at what we expect from our producers on a daily basis (Activity) and on a monthly basis (production)

Daily Expectations:

Daily expectation is all about Activity

But its important when viewing activity to look at the right activity metrics.

So how do we know what the right metrics are?

Two ways:

1.) Focus on Leading Indicators NOT Lagging Indicators

2.) Focus on Leading Indicators that have high correlation to the results you ultimately want to land on.

While we don’t actively use a graphic like this in our agency, its a visualization of how we approach activity expectations.

Something important you might notice: Sales are nowhere on this graphic

Why?

Because Sales are not activity, they are a result.

So what is the problem with having sales on the activity calendar?

Isn’t that what we are ultimately after?

The reason is simple: A sale only helps you today, not tomorrow.

Our daily expectations exist to create a predicable and consistent flow of sales.

If a producer writes 10 Items in a day, but quotes one household, how do you think we feel about that?

If you answered good - Your answer would be wrong.

Hear me out

Have you ever had a sales person, or a sales team have an amazing sales month, only for the next month to be lackluster?

When you’re selling, you’re feeling great.

You’re riding those waves of Dopamine.

Cashing checks!

But meanwhile, you’re not quoting anyone. The pipeline is drying up.

So you get to next month and what happens?

The pipeline is empty.

The sales are slow.

So what do you do? You quote like a fiend!

The next month you pop off again, followed by another down month.

You’re on a sales roller coaster going up and down, and up and down.

The remedy to fix this is Consistent Activity every single day, regardless of sales numbers.

What we expect from our producers daily:

• 8 HH Quoted OR 14 Lines Quoted

• 75% Quoted Bundle Rate

• 100 Activity Score

• 5+ Hours of Connected Talk-Time

• 50-100 Outbound Calls (If quotes aren’t hit)

These should all look pretty familiar with Activity Score being the exception.

Activity Score is a metric that we created ourself using a blend of:

• Quotes - 50% Weight

• Talk-Time - 40% Weight

• Outbound Calls - 10% Weight

We weigh the metrics appropriately. Meaning, if you get your Quote Volume and Talk-Time, outbound calls ultimately don’t really matter.

We only care about outbound call #s if Quotes aren’t hit.

Truly though - If quotes are where they are supposed to be (14+) - Nothing else really matters for us day to day.

# of Quotes per person, per day is the single most important metric that we monitor on a daily basis.

Every morning, I look at one metric in Dash.

Quotes

Because if you get that right, the rest of it pretty much falls into place.

Producer Examples

Here is an example of the daily average of our top three producers in May so you can see what their activity looks like:

Producer 1:

• Items = 94 Items

• Premium = $120,000 Annualized/$75k Written

• Talk Time Avg/Day = 4 hours, 41 minutes

• Quote/Day = 14 Quotes

• Close Rate = 37%

• Sold Bundling % = 97%

Producer 2: Hunter

• Items = 85

• Premium = $122,000 Annual/$82k Written

• Talk Time Avg/Day = 4 hours, 21 minutes

• Quote/Day = 12 Quotes

• Close Rate = 30%

• Sold Bundling % = 94%

Producer 3: Lilly

• Items = 88

• Premium = $111,000 Annual/$75k Written

• Talk Time Avg/Day = 4 hours, 5 minutes

• Quote/Day = 14

• Close Rate = 28%

• Sold Bundling % = 82%

Note: We calculate these as a snapshot in a given month. Sometimes sales come from quotes in previous months etc.

How to deal w/ a Hard Insurance Market (Rates/RMPs)

For many of us across the country we’re dealing with what we call a hard market.

Companies are taking rate increases (All of them)

Underwriting guidelines are getting tightened

And customers are experiencing inflationary pressures in all aspects of their life.

So when we ask people “What has you shopping around?” the answer is obvious right?

Its price

But that doesn’t help as agents to sell policies if we aren’t the lowest priced offering.

So how do you win in spite of price?

Here are the three ways that we as an agency handle this challenge

1.) Find Secondary Motive

The secondary motive is absolutely KEY to winning in a tough market.

We always ask in a way that goes something like this:

“We of course know that price is important to you. Times are tough right now, and everything seems so expensive. We’re going to do everything we can on price. Other than price, what else is important to you in an insurance company?”

This question works for a couple reasons.

First - We acknowledge that price is important. We don’t act like it isn’t.

If someone is struggling to buy groceries, they’re not going to care much about higher limits or better claims experiences. We need to know our prospect and the challenges they’re facing.

Second - While it doesn’t remove price from the equation, it does neutralize it. We acknowledge it, put it over to the side and now we can have a conversation on what else matters.

Price is a driving factor, but rarely do people only cancel because of price. How many times has Netflix raised your price? How about Amazon Prime?

Yearly right?

Most of us aren’t cancelling these services because of a slight price increase.

The reality is that the value we get from those two services justify the increase in price of 10%-20% per year for most people.

Insurance is no different. Most of the time people won’t change soley because of a price increase.

In the insurance industry, people buy on price, and retain on indifference.

When the price goes up, that indifference turns into something worse.

We as agents can help manage those expectations and create value that they won’t get otherwise.

Finding that second motive is key to not only getting the sale, but keeping the customer for the long-term.

2.) Know what your competitors are doing (rates)

Sales is a long-term game.

We generally have a short sales cycle in the insurance industry (roughly 21 days)

People aren’t always a good fit for your policy, ready to buy, or interested right now.

Don’t take a “no” as “never” - Instead take that no as a “not right now.”

So if you know what your competitors are doing..aka taking rates, tightening RMPs, non-renewing customers - you can set yourself up to win if you use tact.

For example, in January, February, and March we were still dealing with a massive rate increase (25% Average) from the previous quarter.

Nobody else had taken rates.

We were struggling to close business at an acceptable rate.

Our competitors were crushing our rates.

However, we knew that the winds were turning.

Every major company in our market was taking a double digit rate increase in March, April, or May.

We educated our salespeople on these rates, both the dates and the amounts.

When we weren’t competitive, we’d remind our prospects: “A rate of x% is being taken by your company on [date]. Save my number in your phone, if you get a rate increase give me a call. This price is good for 90 days.”

You would not believe how many people called us in April and May that weren’t competitive in Q1 that experienced a rate increase, and then bought our product.

Seemingly every day, someone is calling us that was quoted in the early months of the year ready to switch.

Know whats going on in your market, set expectations with your prospects, and then wait to steal the business when your competitor takes rates.

3.) Value Bomb Them

What does this mean?

It means finding a way to add as much value as possible to the client in a way that only you can.

What makes your company unique from other insurance companies?

What makes YOU unique from the other agents around you?

For us, we focus on a few things like:

• Platinum

• $10,000 Death Indemnity on every policy

• $0 Comprehensive Deductibles

• Motor Club Policies

• Lifetime Referral Program

These are just some examples, but we’ve created a “1-pager” we give to all our agents with 12-15 so value points that we can offer our clients.

Price is always going to be important, but the other things you can add will really add up.

Platinum or the Death Indemnity on their own might not make a customer feel like they’re getting insane value.

Combine them with 5-10 other value propositions?

Well, you’re off to the races.

If you want a copy of our 1-pager, shoot me a response to this email and I’ll send it over!

On my mind this week:

Pinnacle Elite Trip + Deciding which game you want to play

Sitting here in Hawaii reflecting on 2023, I’m both looking back at 2022, and forwards to the rest of 2023.

And as we deal with changing goals, rates, technology, and more

Its important to remember which game you’re playing

Are you playing the game of the the company?

Or are you playing a game to maximize profit, flexibility, or something else?

To earn an award trip or a bonus, you often have to hit metrics that you normally wouldn’t.

Goals around Life/ALR, Loss Ratio, Retention, Item count and more.

You play the company’s game to max your scorecard.

Sometimes it makes sense to chase bonuses, trips, and incentives.

And other times, foregoing all those incentives to focus on profit is the better strategy.

Going into a new year, its important to know which game you’re playing.

Because you can’t win the game, if you don’t understand it.

Its important to know if the amount of money required to hit a bonus is more lucrative than running your agency for profit.

In 2023, we’re playing for bonus in our agency.

In 2024, we might play for profit, we might play for bonus.

Sometimes we get fortunate and can play for both high-profit and a Y.E bonus.

Often times though, growth and profit are trade-offs.

Its hard to have both.

So whatever game you decide to play

Always look at both the cost, and the opportunity cost of foregoing profit to chase a Y.E bonus and vice versa.

Andrew’s Picks

Looking for some great music to help increase focus for deep work? This is my favorite playlist when going deep on a project: Link

Some perspective on Happiness - Bonus points for the Earnest Shackleton reference (the book Endurance is amazing): Link

Success looks different for different people. Run your own race, not someone else’s: 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 - Shoot me a reply with a comment, question, feedback, or something else!

I’d love to hear from you!