THE INSURANCE AGENT’S BLUEPRINT TO INCREASING SALES BY 1000% (GUARANTEED)
Posted By Johnathan Peters
The average player in the NFL makes about 2.1 million per year. A decent QB brings home around 5 million a year. The Chiefs QB Patrick Mahomes brings home $45 million a year…
Two starting quarterbacks, in the same league, playing the same game, and one makes 800% more than the other. How is that possible? Does Mahomes train 800% harder? Does he throw 800% better?
This is called a “Power Law” of distribution; it’s also known as a “long tail.” It indicates that people are not equally distributed by talent & pay. In the NFL there are a small number of people who are “hyper high performers,” a broad group of people who are “good performers” and a smaller number of people who are “low performers.”
The pay difference between “low” and “good” players is somewhat marginal. Yet, when you look at the top 1% of NFL performers, they make 800% more than the “good” players and 8,900% more than the “low” performing players. Why is this? This happens because there is exponentially more value in being 1% better than the good players in comparison to the good players being 25% better than the low performing players.
To go from good to excellent is just the difference of a few percentages. Take a look at their stats, they need to throw a few more yards, a few less interceptions all of these minor improvements over the “good” players is what gets them into ‘hyper high performers section’.
All NFL players put in tremendous amounts of time training (input). Yet they perform on totally different levels (output). Whether its focus, strategy, genetics, or witchcraft, something makes Tom Brady 1% better at a lot of different things that other QB’s are decent at. That extra 1% he squeezes out is the difference between 6 Super Bowl wins and 0. Its the difference between 45 million/year and 5 million/year.
If you’re in insurance sales, you are no stranger to hard work, in fact, you could probably be the poster boy/girl for hard work. However, I’m sure you see other agents/agencies that are doing 100-1,000x the revenue you’re doing and may think, “what’s so special about them? I work harder and provide a better experience for my clients!”. The fact of the matter is that your success is directly correlated to the results of the equations below and the numbers don’t lie.
Competency – Value is provided through solving problems. Those who have expansive knowledge on a particular subject are likely to be able to offer better solutions. People want to deal with an expert that specializes in fulfilling their need/problem.
Intentions – People want to know what’s driving you to do what you do. They want to know if you prioritize their best interest. Do you really care about getting them their desired result? Or are you looking to make a quick sale? This is especially important in service-based industries because clients have a genuine need for an expert to assist them through this process. If their “expert” just signs the deal and walks away, they could find themselves in a tough position with no help.
These things are traditionally proven through name recognition & referrals. When someones longtime attorney or CPA refers them to you, the trust they have for that referral source is passed on to you. You still may have to prove yourself, but you get an opportunity to do so, simply because you were referred by someone they have a preexisting relationship with.
SUCCESS METRICS
SUCCESS = (SCALE X EFFICIENCY)
EFFICIENCY = (INPUT / OUTPUT)
OUTPUT = (SALES X RENEWALS – RETENTION)
INPUT = (HOURS X PRODUCTIVITY)
Hours
Time spent getting your output. This could be time at the office, sales calls, client events, dinners, emails, etc.
Productivity
How much are you getting done with that time? Spending 8 hours a day browsing Facebook at the office is obviously less productive than 8 hours at the office on back to back sales calls..
Output = (Sales x Renewals – Retention)
Sales: How much money is coming in for new business? After commission splits, how much are you profiting each month in new business sales?
Renewal Sales
Do you get paid again if you keep a client? If so, how much money are you making just off of renewal sales each month?
Retention
How long do you keep a client on average? 1 year, 5 years, 15 years? What percentage of your monthly revenue do you lose per month due to cancellations (churn)?
Bonus
If you combine the total annual commission from all the policies of a typical client and multiply it by the average number of years you keep your client, you get your Customer Lifetime Value (LTV). This allows you to know how valuable acquiring a new client is.
Example: If for an average small business client, I write their BOP, WC, umbrella, home, auto, life & health which combined pays me $5,000/year in commission, and I know I keep those clients on average for 5 years, that shows me a small business client is worth $25,000 to me.
Efficiency = (Input / Output)
So now take all the work you put in and divide it by the amount of money you are making. That will tell you how efficient you are. Spoiler, this is the biggest hurdle out of this entire equation.?
Side note:
For those who are thinking, “I do pretty well for the amount of time I work”. Jeff Bezos makes 6.5 billion dollars a month and works no more than you or I. There is always room to become more efficient.
Success = Scale x (Efficiency / Innovation)
Success is simply scaling up and improving the efficiency of your existing system. At certain levels, you will have to step back and redesign the wheel as every system suffers from the law of diminishing returns. Meaning, when you first start refining something and making it more efficient the returns are HUGE. Over time the returns from continuous improvement are marginal. Hence the why in the NFL example the players who are 1% & 5% better than the good players are making close to the same amount of money. Once you break out from the masses, you have to continuously innovate to stay on that intense upwards trajectory.
If you want to achieve hyper-success, you must become more efficient so you can generate more of an output with less of an input. I.e. more sales and renewals with less time spent working on them.
THE #1 PROBLEM AGENTS HAVE
How are you currently prospecting for new clients? Referrals, events, associations, outings? All of these things are incredibly time consuming and inefficient. Sure, they may work but so does walking, yet we find its a bit more efficient to drive a car. The fact of the matter is there are only so many hours is a day and you will only be able to go to so many events and meet so many people. You are confined by this no matter how many sales you are making or what the value of those sales are. Maybe you’re booked solid. You feel like you’re signing new business left and right and barley have time for anything. Perfect, now you know where you’re ceiling is. It’s going to be impossible to improve from where you’re at without becoming more efficient.
To make more money, you need to:
Shorten/automate the sales process
Increase the number of sales opportunities
Increase the value of the sale
CONCLUSION
With a system like this, you will get dozens of people booking sales appointments with you non-stop, forget 1% improvement, we’re talking 1,000% + improvement out of the gate.
The equivalent of Patrick Mahomes’s “edge” for Insurance Agents isn’t passing yards or completions, it’s revenue generated & the number of clients you retain.
Mahomes practices his passing, studies other teams, and perfects his technique so he can perform a fraction better on game day. For Insurance Agents, thats building out robust client acquisition systems and refining your sales process so you can be the most effective.
By drastically increasing your input (work x productivity) to give you a much better output (sales x renewals – churn) this allows you to increase your efficiency rate exponentially. The more efficient you are the more sales you will make and subsequently the more money you’ll make.
Step 5). Calendar Booking
After a prospect submits an application, they will be prompted to schedule a time for a call with you. We do this by using “live” calendars that sync with your existing calendar and look for time availabilities. You can customize and adjust these settings however you’d like but its a great way to lock in a call without having to go back and forth to confirm a time.
For me, the best part of having robust systems and processes in place isn’t even the cash. Having a system like this in place creates structure and certainty in everything you do. You know what it costs you to acquire a new customer, you know what your ROI is per hour of your time, you know where your shortcomings are, you know exactly what the status of your business is. With this kind of structure, I see some people kickback. They hit 6 figures a month, hire a few agents beneath them, and spend their time in Hawaii. Whatever your goals are, having a lean well-structured business will help you get there.
Conclusion
Johnathan Peters
Johnathan Peters helps agents start and grow successful insurance businesses. He is an expert at helping people get clients using online methods and making things super simple to understand. If you’re interested in improving your sales, starting an agency, or scaling your agency to 8 figures, then definitely reach out and request a free strategy session today.