Episode 330: You Don't Have A Marketing Problem - You Have A Conversion Problem

Welcome back to the Scale Your Insurance Agency Podcast, the show built for independent agency owners who are done being the bottleneck in their own business. I'm Daniel Metcalf, and every week I'm joined by my co-host, Mike Stromso, one of the most respected operators in the independent agency world. Between the two of us, we bring you the real levers that move a $3 to $20 million agency from successful but maxed out to systemized, scalable, and running without you holding it all together. Here's what we focus on. Mike brings the people side, leadership, team development, niche sales mastery, and a three-piece system that helps agencies build a business worth owning. I bring the machine side. AI, automation, and workflow design that frees your team from the operational drag, eating your margin and your time. Together, we're building a framework that can grow an independent agency 4X to 9X without burning out your people or your checkbook. If you're an agency owner who's tired of growing by hiring, who knows you have a capacity sitting on the table but can't figure out how to unlock it, this is the show for you and your weekly edge.

Greetings, everyone. Welcome to the next episode of the Scale Your Insurance Agency podcast. I am here with my co-host, the one, the only, Mr. Daniel Metcalf. Daniel, how are you doing today? Wonderful to see you, Mike. Grateful to be seen. What another wild week in the industry. And there's some agencies out there that have had a wild week because they've had character building days, which is a new term that's come into my own life. And just for everybody, in case you haven't heard previous episodes of the scale your insurance agency podcast, those are tough days, difficult days, character building days. But we found Daniel, and this seems to be way too consistent, and we want everybody that's listening or watching this podcast to do something about this.

You don't have a marketing problem, you have a lead conversion problem.

And we find time and time and time again that everything that an agency wants is right beneath them in their own acre of diamonds, and their book of business, and their quotes not sold, they're not paying attention to the math of their closing ratio, their lost souls, and other opportunities generated by today's automation technology and AI environment. So, look, everything that you want is right beneath you. But we want to take a deep dive right now, today, specifically into let's take an agency that has an adequate number of leads coming in, right? They've done a lot of the right stuff, a lot of the stuff that we teach from a marketing perspective. They have all they can possibly handle. But they might have a conversion problem. So the leads. Danael, is it a people problem? Is it a follow-up capacity equation? What do you think it is?

Well, it's really the combination of people and technology together. And that's what we have uh, you know, is my mission is right, combining technology and people together in order to get the most out of their business. And let's start by defining leads just real quick. So many people always think that leads are just what are the either the inbound or outbound leads, right? Of hey, you know, someone raised their hand to say, hey, I'm interested in in buying insurance through through you. Leads can come, yes, they can come from inbound, right? Inbound leads are leads that come from your COIs, your referral partners, or anything that's coming into the agency from that standpoint. Um, then you have your cross-sell leads, right? So you have opportunities where people have purchased one type of insurance um from you and they, you know, they have other opportunities to have other of their precious assets being protected by insurance, right? Through insurance. And then you have those that are in the renewal side of it, right? So some type of increase or additions or whatever it may. So not just a different product, but also, you know, there's more more value to what's what's being um protected. And then that and that means that there needs to be a higher increase in the insurance to be able to protect that. And then we have what I'd call the outbound, right? So that is somebody outbound, you know, reaching out to I call them strangers, right? Um, to strangers on that might not know who the agency is or may have heard of it, that find out if they're looking for insurance services from that standpoint of it. So the leads just aren't from those outbound calls. And that's when we're talking about, hey, you have plenty of of leads at us agency of you know two to two million and plus, you already have plenty of leads. Does that mean we stop going to get outbound? No, those are included in there. Um, but at the same time that we want to make sure that we're maximizing each of the opportunities that are in front of us. And that is where we start to see it being a conversion problem. So when we're building out the dashboards and we start to, you know, list out, okay, what's our conversion rate when it comes to renewals, what's our cross-sell rate, what's our inbound conversion rate, our outbound conversion rate, that's where we start to look at, okay, if it's below a certain threshold and the dollars that come out of those conversions are below a certain threshold. That means that there needs to be action on what we need to do in order to close more deals and close larger deals if possible. Now, remember, we don't get to set the price. So it's not in the insurance world, right? We don't set the price. So that's why we always we mostly focus on conversion. What we can affect is our ability to respond, our ability to follow up, our ability to build trust and build null and likability that is within our control. And so that's when we're saying of well, how do we help scale? Can't there's a lot of things that are out of control, we can't control conversion.

Well said. I mean, Daniel lined that up very well as far as what we want to dive into in this podcast. But, you know, at the crux of it, it's all about relationships. Daniel said, like and trust. I say no like and trust, same thing, right? Through the follow-up and the consistent follow-up, right? The number one reason that people don't achieve what they want to achieve, either personally or professionally, is lack of consistency. And that's where Daniel and his team are so very powerful in today's environment because they build in the automation and technology powered by AI to do a lot of that communication and the consistent follow-up, even while we're sleeping or on vacation. And how wonderful is that? Or taking your daughter to college or whatever they're doing.

Yeah, right.

I said that because I know Daniel was doing that this week. So congratulations. So, but let's get back to the follow-up capacity equation. So let's just take a talking example for everybody here, and and it's our goal that this piques your interest in a big, big way. Because Daniel, I've heard you say this multiple times. I lost count. You're looking at an agency and the ecosystem and the infrastructure and the book of business, and you're you get all excited. You go, I could turn that two million, three million dollar agency into a seven to ten million dollar agency pretty quickly. And I'm going, woo, please do tell me more, right? So it's it's all of this, right? By you know, fixing the leaks in some of those buckets and you know, building in the entire infrastructure so it works together, meaning the agency operating system and so much more. But again, it's super, super important that we fix the follow-up capacity equation. So it's one of the most expensive leaks that we find in growing insurance agencies, not the lead generation, but the actual follow-up. It's the follow-up capacity. The capacity, the ability to follow up. So here's a typical agency flow for your consideration. And let's talk about each of the four areas at once, Daniel. I mean, each each individually, okay. So we've got 300 inbound opportunities. So these are inbound leads coming into the agency. It might be a new inbound lead for however they found out about us or a referral opportunity. Okay, so 300 inbound opportunities per month.

Okay, but how many of those inbound opportunities receive timely, consistent, documented follow-up? And how can we help agencies improve this?

So in general, we see about a 50% uh in the timely consistent documented follow-up of inbound opportunities. See right around 50% a typical agency right now. And in many instances, that and you're gonna see 50% when we go through all of them, right? Um on average. So if you look at it, so let's let's put the math together for it, right, Mike? So let's you know here, I'll write it down here. So let's let's call it 300 inbound a month, 150 cross-sells, 100 renewals, and 50 producer prospecting. So my my Can American Math makes that about 600 meaningful revenue opportunities per month. Typically, we see about 50% of them that are actually getting that timely, consistent, documented follow-up. Where the gaps come in is each one of those different leads usually comes in the discovery portion of it, right? So that initial discovery, getting the necessary information, gathering the data, the analysis, what's necessary in order to be able to help them in any of those different, it's always gathering that information. That's that data from somewhere, whether it's internally or externally, it's gathering that data, putting it in a meaningful way. Nobody, and I in I'm I'm sure the agencies could put their own consumers hat on. Nobody likes to be reached out to two or three times, be like, oh, I forgot I needed to get this from you. Oh, I forgot I need to get this from you, oh, I forgot to ask you that, right? And then what happens? You get ghosted, right? So, yes, you might have reached out to them and okay, you want to make it really easy for them to either have a discovery session with you or have it, you know, have something with you uh with them to be and you want to be able to gather everything that you need to know at that particular time. So if you look in your CRM and oh no, it's not there, right? Or your AMS and all and all the information is not there, right? And you've already told them that you're gonna get back to them in the next, you know, 48 hours or whatever it is, and now you got to ask them for more information, doing this back and forth. Maybe you sent them a canopy connect and they gotta teach you all the information, then you're following up with them. All that roundabout, you time kills all deals. So the longer that it takes for you to do all that, and the more often you have to have them do work on their end to buy something from you, the the less likely you're actually gonna get a conversion from some of that. So that is where we're talking about putting in the AN automation to help on the discovery side, on the data analysis, making sure that the follow-ups are timely so that it automatically creates the next step on their calendar or whatever it might be, things like that. That's that's what we're we're talking about, fixing that capacity equation.

Yep. Great, great stuff. I mean, nothing but opportunity. And and I learned years ago, and this is the base in my mind, and it always has been there. 48% of salespeople, 48% never follow up with a prospect. So don't let that be you. And 80% of sales are made on the 5th to the 12th touch. And in today's world, possibly a lot more. So let's take that same thought process over to cross-sell opportunities. And Daniel, I know this is where you also get super, super excited when you look at Book of Business saying that whole book is ripe for picking, as they say, right? I mean, it's a rare day that we see 3.0 policies, three policies per client in an agency. So we'll add that on. 300 inbound opportunities and then 150 cross-sell opportunities, existing clients ready for expanded coverage, because every phone call is an opportunity, right? Correct. So how can we put to use automation of technology? Like I'm on the phone with Daniel Metcalf and I'm talking to Daniel, and I say, Daniel, I noticed that you and Janelle don't have an umbrella. And I also noticed, because today's technology lets me know that you have other things like a boat and a motorcycle and maybe a rental property and that type of thing. So we would love to have the opportunity, but building the consistent follow-up for that, because we we can use automation and technology to assist with the quote preparation process, the proposal process. And I know you deal in technology that does all that. Tell me your thoughts on that.

Yeah, absolutely. I mean, um, having before, again, if it happens to be while they're, you know, calling you for some service work or calling calling for some reason and that cross-sell opportunity and all your data is not already um up to date with all their information, because you could use AN automation to help you enrich that data, look at public, you know, look at public records, look at public things that are out there, to be able to say, oh yeah, they do have, you know, they registered for a boat, they register for a car, whatever it might be, that be able to get that information, right? Um, making sure that everything's up to date, uh, age changes, whatever that might look like. If all that's in there and prepared, when someone calls in, you can that person can always say, Hey, do you have an extra minute? I want to look here. I noticed that we haven't uh you have you know you're not covered for these couple of things. Can we schedule? Can I schedule a time with uh, you know, to have somebody bring a quote with you, right? And then, well, when can we schedule for the next two days? I'm available or tomorrow or whatever. Do we have the technology in place to be able to get them a quote on that really fast? So we're actually pre, you know, and we're not just having another discovery meeting. We actually can come with a proposal. Now, do we show the quote? Maybe we maybe we do, maybe we don't, but at least we have it that if as the buying signals go through there, you could then say, well, I have a quote right here prepared for you. Can we walk through it and see if this might be a bit, you know, if this will fit your budget, whatever it might look like. I'm sure I'm butchering that as not being the insurance salesperson, but at the same time, that's kind of the idea of having all that, all the data and all the technology available to be able to get to service the person in the in the exact way that they want to be serviced at that particular time, especially if there's a buying signal. If you have to hang up the phone and hope to get them back on the phone again after a buying signal, Mike, you know the chances of that converting or how long it's gonna take to convert goes um goes awry fast.

Well, in addition to that, like we've been talking about a lot lately, um, you know, once they hang up, if they don't feel that this is the right fit or the right opportunity based on their consistent and ongoing needs, they're gonna look somewhere else. So, anyway, that's where you need to make sure that you have done your roadmap, which is the base foundation for building technology within your agency, and done the base roadmap to design things for maximum ability to convert, which is the goal. So when you add inbound opportunities and cross-sale opportunities, and then start thinking about renewal conversions on a monthly basis. So we have 300 inbound opportunities, and I'm gonna tie this up with some math here in a minute. 300 inbound opportunities, 150 cross-sale opportunities, 100 renewal conversions, and we talk a lot about this uh with independent insurance agencies, Daniel, uh, as far as making sure that they have the proper automation of technology built in, powered by AI and their agency. And we I know that I was just working with an agency yesterday based on your influence with that agency. Thank you very much. I saw what they have built, and I'm going, how awesome is that? They built a renewal system, and it's now starting in there mostly commercial, mostly in one singular niche, habitational real estate. And they are now starting 120 days out with an automation piece, and they've got the follow-up map built in, and they know exactly most importantly, who's gonna do it and how it's gonna get done. But you know, back to the automation piece, and and we were talking about this in a recent podcast, Daniel. You were talking about the proactive outreach each month and systematizing, right? And so the dashboard talks about the conversion rate and gives you the math.

So we know exactly where we're at and we where we can potentially improve. Anything else to add on to that one?

No, no, that's again.

Yeah, fabulous. So 300 inbound opportunities, 150 cross-sell opportunities, 100 renewal conversions, and then full-time producers. Yes, full-time producers are out there prospecting on their own. So let's say 50 producer prospecting opportunities, outbound opportunities that are in the pipeline. All right. So that's 600 meaningful conversations. And that's what we wanted to share with you today. 600 meaningful conversations going on, 300 inbound opportunities, 150 cross-sells, 100 renewal conversions or conversations, I should say, and then 50 prospecting opportunities in the pipeline. So that's 600 meaningful opportunities per month. But again, how many receive timely, consistent, documented follow-up? And how are you using automation technology and AI to support that effort? And the honest answer that Daniel mentioned uh in the beginning, about 50%, right, Daniel? So let's take that 600, and if you have meaningful conversations going on with 300 of them, what about the other 300? So I did some quick math. Let's say that 300 that is not having a meaningful conversation, which is a huge opportunity, let's call it 100. And for the math here, so you have 100 opportunities that are warm enough that you could convert, but it's just not getting done because you don't have the right agency operating system. So let's say it's 100, and let's say the average premium is conservatively $2,500. Okay. So that's $250,000 in total premium times, we'll say 13% average commission. So you're leaving a minimum, a minimum of $32,500 in commission revenue on the table by not having those meaningful conversations.

A minimum.

Because remember, they all know 100 other people that will come to your wedding or come to your funeral and just keep compounding 32,500, 65,000, compound that, 130,000 revenue income. Just from the meaningful conversations. That's what blows our minds, right, Daniel? I mean, I know that's what you see when you look at these agencies. I could take this, you know, $3 million agency and I can make them seven to 10 in a short period of time.

Yep. If we just converted more of the opportunities that they're letting go by and focusing on places that we know we can rinse-repeat the same opportunity without having to do something custom every time.

Right. And you build the automation and technology into the agency to help them to be able to do that. Phenomenal stuff. So um, you know, let me give you a a quick list of what this meaningful conversation deficit costs agency.

Okay.

Missed quotes and slow response times, dropped cross cells, and we Renewals. Lost referrals that never convert. And what does that do to your reputational cost? Producers blaming service teams? Service teams blaming producers. Owners stepping back into the daily chaos. Which is all a result of not having the right complete agency operating system.

Right, Daniel?

So growth doesn't break because people stop caring. Growth breaks when opportunity volume exceeds the follow-up capacity.

And hence the need for continued expansion of the complete operating system in today's environment.

So prioritizing things like automation sprints, workflow mapping, and revenue engine activation as core operational components. So, Dano, talk about the automation sprints and the workflow mapping. And I know we talk a lot about this. And revenue engine activation. What are your thoughts on those?

So if we don't start by, I mean, um our process is standardized to the point of we need to get the numbers first, right? So that we can understand where you're at versus the benchmarks of others of your, you know, of your size or of the size that you're trying to get to, right? So that way we can get the we get the roadmap from the then the numbers, right? So if we're trying to get to X, you're at Y. Here are the numbers, you know, here are the K key performance indicators and the benchmarks based on where you're at and what would have to change where where we want to go. Then we can start to look at, okay, how can we look at current workflows, current tech stack, and how can we roadmap how artificial intelligence can start powering a lot of these workflows and automations and and um and in what order are we gonna have the greatest impact? And then we start looking at revenue scale. Once we are able to get the flywheel going in that one particular area and we start to see the numbers going up, then we can hyperscale it to the point where that's where the main focus is gonna be, and we're gonna keep pulling that, pushing that flywheel until it kind of runs itself at scale. Uh, and how much more do we need to add in artificial intelligence and automation capacity and compute in order to be able to make that run? And so that is what we put in place. And a lot of times we're looking at the first place we start looking at is the conversion rate of what we call leads.

Awesome. Awesome. So our encouragement here is cultural mindset conversion for your entire agency operating system to maximize the use of everything available to you in today's independent insurance agency marketplace to assist with additional follow-ups because there's a strong chance that you're leaving money on the table with everything else you already have going on. So make sure that you maximize every single opportunity every single day. And make sure you have the right tech sack in place to maximize all those opportunities working together simultaneously.

That's our goal for you.

And as is always our ongoing goal, and again, we're gonna keep saying this, and we're gonna keep saying this if you don't have the right processes, systems, and workflows in place, you cannot build the complete automation technology powered by AI operating system in your agency. You've got to build the foundation so that you can consistently follow up and all of these opportunities and more. $32,000, $65,000 in revenue per month left on the table. Exciting times, Daniel, but as I would say, something about taking the first step, right?

That's right. Always starts with the first step. Always looks a little daunting when we start talking about all these uh um processes and procedures and uh operating system you put in place, but it all starts with the first step. Go check out your numbers. Go start by figuring out what your key performance indicators are, where are you and where do you want to go? And then start to work the math backwards and what you need to do in order to get there. That's that's the first step, is just saying, here's where I want to go. Here's where I am, and here's where I want to go.

And I know that's one of the first questions when you uh start working with an agency, you ask them that.

Yes.

Where do you want to go? Tell us where you want to go, and we'll take you there. But prepare it, be prepared for that conversation as well, because I know they're gonna start asking additional questions. Right. This is where you want to go. Show us what you've got to help you, help us help you get there. And then we get into the process of the systems of the workflows and all the other stuff that's non-existent sometimes or it's not where it needs to be, and then say, oh, that's work. Because, Daniel, you know as well as I do, if it was easy, wouldn't everybody be doing it?

That's right. Behind every opportunity on the other side of the door is work.

That's right. That's right. So let us help you do the right work and do as much heavy lifting as possible. And that's why we exist here on the Scale Your Insurance Agency podcast. Daniel, great job today. Anything else before we wrap it up?

No, I uh really excited that that um all the stories that we're hearing, all the responses that we're getting. Um just keep it up. Keep sending those in because that helps Mike and I stay motivated to continue to do this and to go do the investigations and do the work and talking to other agency owners. So please keep sending in all the positive responses that you've been sending us about some of the things that you've learned or that you've instituted since listening to us. So I really appreciate that.

Yeah, agree. Thank you so much. We appreciate you more than you know. But what it also does, it inspires us to build. And we continue to build uh a lot of infrastructure pieces on your on the behalf of all of you uh to help you scale your independent insurance agency as far as you want to go. But most importantly, know where you want to go. So, Daniel Metcalf, thank you so much. Uh and we don't give her enough praise on the backside of all of this is the one, the only, the incredible Andrea Wyatt, who's our show producer. So, and uh Andrea, thank you so much. We appreciate you more than you know. And everybody, like Daniel said, take the first step. The first step to your absolutely unlimited future. Thank you for joining us today on the Scale Your Insurance Agency podcast, and we'll see you in the next episode.

That's a wrap on this week's episode of Scale Your Insurance Agency. Quick reminder: everything we talk about on this show is built to do one thing: turn your time into profit, more revenue, more margin, more freedom without adding headcount to make it happen. If something landed for you today, please share it with another agency owner who needs to hear it. This community only grows when good operators help each other level up. Please subscribe, download, and share our podcast and all your other favorite podcast engines. And if you're ready to stop figuring this out alone, Mike and I are both in the field working with agencies right now. Please reach out, find us on LinkedIn or on our websites, and we'll tell you exactly where your biggest opportunity is to scale. Now, until next week, build the system, protect your time, and scale the right way. See you next week.