Uncaptive Agency: The Future of Insurance, Ep. 22

Join me as I discuss how client relations and retention are a game changer for agency growth with Michael Jans, insurance pro and founder of the Next Level Organic Growth Program.

Michael Jans has been a force in marketing and consulting to the independent insurance agency force for the last 25 or 30 years, and he is still coming up with fresh ideas to stay ahead of the market.

He talks with me about his approach to organic growth based on a good inbound sales funnel and a strong focus on retention and building customer loyalty. Times change, the industry changes, and we cannot keep doing things they way we always have - join us to hear actionable strategies to generate organic growth for your independent insurance agency.

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Tony Caldwell:

Welcome everybody. It's Tony Caldwell and welcome to another edition of the Uncaptive Agency where we're talking about the Future of Insurance Distribution. It is May of 2021. I'm talking with my guest today, Michael Jans from Cave Creek, Arizona. And we're talking about what we think is going to happen in the insurance distribution industry over the next three to five years. Probably everybody, Michael, that is listening to us today knows who you are from your insurance profit systems days and all of the work you've done in marketing and consulting to the independent insurance agency force for the last 25 or 30 years. But for those who don't know what you're doing right now, and by the way, welcome today, give us just a thumbnail sketch of what Michael Jans is up to today.

Michael Jans:

What I'm up to today really is not significantly different than what I've been up to for, like you said 25 or 30 years paying attention to one question. Between you and I, Tony, and I don't know if anybody else is listening, but between you and I, this is not the question that when I was growing up I thought I'd be focusing my time and attention on, but here we are, right? And so yeah, that question that I keep pursuing is, what makes independent insurance agencies grow? Like you said, I've been in this space for probably about 30 years. When I got into this space something that occurred to me, at that point I was the executive vice president of the PIA Affiliates on the Western side of the United States, is that the industry was a little bit of a one trick pony when it came to organic growth, which was generally if somebody wanted to grow what do they do? Hire producers.

And the other elements of organic growth, they just weren't really mature in the industry. And so that was fascinating to me. I had been in a situation where I had to grow or die. And when I first turned, it was when I was running the PIA, those affiliates were really in quite some trouble. And so I turned to the leaders of the association, independent insurance agents, I said, "How do you grow?" Right? Because I needed to sell membership, I needed to sell E&O insurance. I needed to sell education. And the kind of answers I got were like, "Well, we've got a great reputation, we take really good care of our people or we've been around since 1925." And I thought, that's it. That's the best you could give me? And so I did fortunately crack the code on organic growth with the affiliates that I was working with, but then also began to share some of the insights that I had.

So what am I doing now? Well, living outside of Cave Creek next to 3 million acres of national forest, enjoying a fairly quiet lifestyle, I sold my interest in my insurtech agency revolution almost four years ago. I can't believe that. I took some time off. Other than maintaining some private clients and maintaining a mastermind group that would come here to Kasita, I really took some time off to reflect on what's happening in the industry.

I maintained my podcast, the Connected Insurance Podcast, and I just kept asking them the same question, what's happening in the industry? What are the trends and forces that are shaping the industry? What does that mean to the leadership of the agency system and how should they behave? What should they do differently? I've been doing that. And then very recently, I realized that I could only reach so many people with private client relationships which tend to be distributed between some insurtechs and fast-growth agencies. But my time is limited. My fees were maybe out of the reach of the average agency. One last time I wanted to make a difference in the industry, so I've launched what I call the Next Level organic growth program, which guides people in a sequential path from wherever they are right now to the next level. That's what I'm up to.

Tony Caldwell:

Okay. All right. Well, it sounds like the theme is the same, but perhaps the music is richer and more nuanced.

Michael Jans:

Well, I think we're better. I mean, let's face it. You pay attention to something for 25 years. If this year isn't different than the last year then you really weren't paying attention. I think we're delivering some really good strategies and tactics.

Tony Caldwell:

You mentioned that when you joined the PIA, the industry was focused on growing through producers. I talk a lot to agency owners who have lots and lots of questions about hiring and managing and compensating, produce. In many respects I think that many folks in the industry still think that's the way to grow. Obviously you taught a lot of people how to be marketers as well as producers. But as you think about the future, is doing this one at a time with human beings the best way to grow the way many agencies still seem to think? Or is it a whole new way of the marketing? What's your opinion?

Michael Jans:

Yeah. Well, that's a great question and I'm going to be really careful. I don't want to throw producers under the bus. I think that they provide an outstanding service to the market and to the industry. They provide advocacy, education, expertise, just like an agency does. And they also have to get new clients, right? And so my perspective on the producer is that today's producer, the contemporary producer, the producer in the modern age of insurance, well, they shouldn't be functioning like I did in 1995, right? Just like an agency shouldn't be functioning like they did in 1995 because the world around us has changed, technology has changed, consumer behavior has changed. And so I still respect the producer.

However, the producer like other small and medium businesses, they can do a lot of the same thing. In other words if a producer's responsible, let's say for a customer acquisition, well, they don't have to make cold calls as the only form of acquisition, right? They can create a presence in the marketplace. They can create value in the marketplace. They can obviously market through the marketplace. They can communicate and attract attention, deliver value. And they can design a relatively simple marketing funnel that attracts people to them and draws them closer to them, so that using technology and good content through that technology, good prospects can come to them, not saying, "Hey, Tony, I want a free quote." It's, "Hey, Tony, what would it take to do business with you because I've already decided in my heart that you're the guy?"

And so from a producer's point of view, that's just pure beauty for customer acquisition, closing ratio is higher and you can get better quality clients. But then after the customer acquisition is executed, well, I think a lot of producers, or a lot of agencies think that's the touchdown, but really that's the scrimmage line, now we get to have fun. And so that relationship with the client becomes the beginning of a process to generate maximum customer lifetime value, right? And that customer lifetime value...

Bain did some research on this a few years ago that I thought was stunning. It confirmed what I was seeing and feeling in the marketplace, but the numbers they put behind it were stunning. What they determined was that if you could earn loyalty of an insurance client, they'd renew at 97%, they'd generate 2.5 referrals, they'd buy 25% more insurance. And they're literally six times more likely to buy another policy in the coming 12 months than a low loyalty client. What they determined was that a highly loyal insurance client delivers seven times the lifetime value of a low loyalty client, three times the lifetime value of a mid loyalty client.

Well, when I really sort of grasped the magnitude of that number I thought, "Oh, okay, you want to make money in the insurance industry? Okay. You got to do two things and do them really, really well. One is you have to have a good lead generation system and two, you need a good customer journey and a journey that creates loyalty and then stimulates the reward for that loyalty with referrals and account rounding and longer retention."

Tony Caldwell:

And so none of that's new, it's perfectly common sense. It's hard to understand for me, why so few people who get paid for selling insurance in our industry are actually really producers. I was having dinner in Carmel the other night with my wife at a famous yet mediocre restaurant. And I was watching the poor job that the wait staff was doing. And after having a good meal I got asked a typical question, which is, "Would you like some dessert?" And I reach out to this poor girl and said, "That is a completely wrong question. You're not asking me the right question. No, I don't want any dessert because you haven't made me want any. Instead, why don't you do something with some showmanship to make it impossible for me to resist having dessert, because you know what? You're going to get 15% however big my check is or 20 if you're doing a better job."

I learned early in high school as a waiter that the bigger the check, the more money I'm in, because people were going to pay me what they were going to pay me based on what their bill was. And so I'm still bumfuzzled why people who get paid commission in the independent insurance agency industry don't understand that. Theoretically they are better trained, better educated than a waiter was in this mediocre restaurant, but they still don't get the concept of, “Gosh, if I sell people more stuff, I get paid." Why do you think that's so hard to understand?

I have a bit of a theory about what I think this problem is. And I think it's because we're probably psychologically wired this way. When we get a customer, everybody gets excited about it. If the producer brings in a big account, the principal might pat him on the back and maybe if he's got a good relationship with the CSRs, it's like, "Hey, great job." And yet maybe that night 337 policies got downloaded into the agency management system and nobody cared, right? But when you think about it, hey, well I'll take what happened last night over what happened this afternoon with the new sale any day of the week.

And the same thing happens on the inbound call, let's say in account exactor CSR gets an inbound call. Maybe they do a good job, they follow the script, or they really stick with the philosophy of the agency and boom, half an hour later they've got three policies and boy, it's like Sally or Nancy or Fred, "Hey, great job." Maybe it goes on the whiteboard or something. Three policies, that's great. And so I think in general there's just more because it's new, there's a shock of energy.

And yet where the real wealth and equity is developed is in the quiet stuff that doesn't ever... Like there's very few parties around it. There's not a lot of celebrations around it. It's that slow gradual work of building a really great customer journey, training people in the philosophy of the agency, helping people create deeper longer relationships. And all those secret things that happen at night when you're downloading all of your customers.

Tony Caldwell:

So the agency that wants to grow into the future into a modern agency, what do they focus on first? Do they need to change the way they're paying people so that they reward folks the results they want? Some of the things you described. Or do they do that with technology and keep treating people the same? How does that change? In other words, most customer service people who are frequently responsible in the agents for account rounding and upselling after the producers hit the first ball out of the park or whatever, they're typically paid primarily on salary, not commission, and they're typically recruited for nurturing skills much more so than sales skills. Does the agency of the future need to change its philosophy about the kinds of folks it hires in its service department to be successful? Or does it change the way it's paying them both something else? What do you think?

Michael Jans:

Yeah. Well, I'm not sure that there's a single answer to that but also I'll walk through the approaches that I've seen really matter and one that doesn't. Here's the one that doesn't, provide a little bump of an incentive like, "Oh, bonus, every time you get a cross sell," or, "We're going to give you a little more commission." And then think that's it. It's like, "Oh, we announced a new program, and this is a program that's automatically going to help us grow and you're going to feel great about it." And the fact is it doesn't, it's the role of leadership.

That program may be really useful if it's founded upon good principles but the coaching and the mentoring, the incentivizing, the encouragement, occasionally the termination when it's appropriate, that's the job of leadership that has to be part of their participation in the agency every single day. So the incentives useful, but I don't think anybody should fool themselves into thinking like, "My nifty new program is going to change their psychology."

I think that in my experience, because I've trained thousands of CSRs, and I trained them in how to close more inbound calls, how to cross-sell more existing customers, how to generate more referrals and how to deliver the kind of experience that retains clients longer, those four things. And in my experience, when you can really engage the heart and mind, of let's say a CSR, generally they have a psychological orientation that encourages them or compels them to take good care of people, right? But if you say, "Hey, we're going to send you to sales training." They're like, "No, I don't want to do sales training. That's not why I'm here." And so I think it requires a real heart to heart conversation around what's our mission, what's our purpose. What are we here to do?

Well, without too much engagement I think we'll all come to the conclusion, we're here to take care of our customers, which means protect them. That's our job, right? As professionals it's to lead them to make the best decisions they can about purchasing the protection that they need. And so to have a conversation with the CSR about, "Hey, how would you feel, or how do you feel when a customer has a gap and they have a claim and they get hurt by that claim? Maybe it really was some serious damage to their income, certainly to their peace of mind. Maybe they call their lawyer and their lawyer sends a magic letter to the agency that says, "We think we should have been covered or something like that." How do you feel about that?" They feel terrible about that. They don't want that to happen.

And so this is where I think the dichotomy between, "Oh, we need to be a sales organization or a service organization," really it's a little bit fussy, it's maybe not quite the right metaphor. The metaphor I use is that we need to be a customer organization and we need to take care of customers. And the ethical thing, just like a doctor's job, they have an ethical responsibility to take care of your health, we have some ethical responsibility to take care of the protection that they've got.

And so from that point of view, yes, I'm motivated to see that you've got the umbrella or, whatever it is that you need that you're not thinking of right now. Yes, we can talk about technology, we can talk about the technique, but core is this sort of the strategic philosophy which is there, it's like we're in business to do one thing and one thing only, protect as many people as well as we can.

Tony Caldwell:

Yeah. That's really interesting. You talked about philosophy, another way of saying that, what are your values? What's your mission? And I find that people give that shrift back, they don't even really think about it when they start their agency. And often as they operate theory or they felt like they come up suddenly formulate sort of thing, but it doesn't come from the heart. It's not something they really thought through, consequently their culture is a morphous. Their mission is not defined. And then they fall back on the truisms or the platitudes, but what's your unique selling proposition? And they say the same thing as everybody else because they haven't got anything else to say which is, "We have great service."

Michael Jans:

All the same answers I got 25, 30 years ago.

Tony Caldwell:

Exactly. We recently did a strategic plan at a bank that I'm the chairman of the board, and we spent two days really getting clear about values. And it was a bizarre thing for some of the people, like, "I thought we're here to talk about how much we want to grow." Well, first we got to get the foundation line. And really it was an interesting conversation because there were a lot of strong feelings elicited through the whole conversation over a couple of days about, why are we here? Yeah. We want to make money, but how do we do that and why? And so in your work with agencies, is that where you begin and is it any different now than it was over the last 25 years or is it the same struggle?

Michael Jans:

Well, I do think it's the same struggle in very different world. Okay. Maybe 20 years ago my most read report... I think it was online. My most downloaded report at that point in time was a report I called a 21 Ways to Write a Killer Yellow Pages Ad. Okay.

Tony Caldwell:

I remember that.

Michael Jans:

Yeah, right. There you go. Back then I did a little bit of travel. We had conferences around the country and I'd check into the hotel. I'd pull out the yellow pages. I'd look under insurance and I'd say, "Oh, yeah, that's one of my guys," right? Oh yeah. Okay. That guy is one of my guys, because I could tell the nature of the kind of advertising I was encouraging was just really radically different than the average, which is kind of case in point. Most agents said to the yellow pages rep, "Oh, you write the ad?" I was like, "Okay then." Now obviously that's the loneliest report in the world. Nobody's asking for a copy of that one. And so now we do live in a world where the communication media are myriad, there are numerous and new ones every day. And our competitors are using them really, really, very effectively. Our customers are using them every single day.

And so that's a skill set that's, guess what? It's no longer new but it opens up huge opportunities for agencies if they can understand a couple of things, first the power of contemporary technologies. There's a little bit of a learning curve. There's some things you've got to understand, but this isn't rocket science, not going to take four years of education to get there, there are a few things there.

And then the other thing is the messaging that is delivered through those technologies and how you can weave those things together and deliver those messages in many ways very automatically, and actually amplify your sense of presence and amplify your sense of humanity, amplify that sense of transparency and realness. And you could do it in front of thousands or tens of thousands of people really very quickly, very powerfully, and move them along an elegant customer journey. Yeah, today's world... In my focus on organic growth, there are a few things that agencies need to learn that they didn't have to worry about 10 or 15 years ago, but that's just the nature of the world. And I think if we pay attention to them, they're not hard to learn. They're easy to execute and the rewards are really very rich.

Tony Caldwell:

You focused on organic growth for much of your career and you've seen a lot of people and a lot of different kinds of results. Set up bench line or benchmark for us and say, hey, if you're in this business seriously, what's the minimum acceptable level of performance for an agency from a standard point of organic growth?

Michael Jans:

That's an interesting question. The average agency... I don't have last year's figures yet, but I got the previous years from Tom Doran over at Reagan and it was 4.6. Okay? For the previous year.

Tony Caldwell:

Mm-hmm (affirmative). That's not the organic growth number. That's the premium and commission growth number which is in regulation.

Michael Jans:

You're right.

Tony Caldwell:

Right?

Michael Jans:

Okay. I'm doing my best to arrive at a number and it may be too generous. Okay?

Tony Caldwell:

Good.

Michael Jans:

Just to put this in perspective, 10 plus years after I launched my training program, Insurance Profits Systems and Quantum club, I launched an insurtech startup.

Tony Caldwell:

Mm-hmm (affirmative).

Michael Jans:

80 plus percent of startups fail. And so when you take that risk on you do more or less with the full knowledge that 4.6% growth will not cut it, right?

Tony Caldwell:

Right.

Michael Jans:

And so you have to scale, you've got to go from zero to now you've got to take care of every... You may not get paid but you got to pay everybody who works for you. And you got to take care of all your expenses, and then you got to get it to the next level. That's a world where doubling your growth annually, maybe you'll be okay but maybe not, right? In an agency double growth, that's just extremely rare. Tough to say, but I've worked with clients who have had, let's say a 35% average annual growth for 10 plus years. Like I'm working with a client now, I think 13 years in a row between 30 and 40. Maybe the fastest growing personal line agency in the country, right? Because they're just not a lot of people that can pull that off, but with focus and discipline and the right tools... This guy is not doing anything that nobody else can't do, he's just executing on it.

That being said, my definition for scale in the independent insurance agency system is 25.8, 9% per year, it's a magic number because if you grew that much every year for 10 years, you'd be 10 times the size you are. If you got a $3 million agency by 2031 you get to have a $30 million agency, that's possible at that growth rate. And that's high but there are four numbers that I ask people to take a look at, and each one of them pertains to a different stage in my four stage marketing model. Okay? Number one is, how many leads did we get? Well, if we have a system that gets more, then we'll have more leads coming to the second stage, which is conversion. How many of them did we turn into customers? Well, if we train our account executives and CSRs and provide sales training for the producers and manage them well, well, that number goes up.

And then the third number is, what's our policy per customer count? Or an alternate number, what's our revenue per customer? But let's say we're measuring policy per customer. Well, if we're really generating loyalty and we are stimulating a response to that loyalty with cross-sell campaigns, annual reviews, increased policy sale at the point of sale increase, cross-selling at the point of service, there's a lot we could do there.

And then the fourth if we can increase our retention by nurturing, by engaging, by communicating, by demonstrating value, maybe by providing enough innovation that your customers are thinking, "No, I wouldn't go anywhere else." That's the relationship I have with the agency that's been taking care of me for 20 plus years, right? No, I don't want to go anywhere else. If you can tweak those four, you don't even have to turn them upside down and go crazy with it, if you tweak all four of those numbers, you will have dramatic growth compared to the previous year.

Tony Caldwell:

Yep. I'm well-known as an optimist and actually we started our conversation actually before we started recording it but an optimistic view that we both share about the future of the industry. I want to just set that as a cavity, but also to say, I have a theory about the next four or five years, and it is that a lot of agencies that are now in business hopefully. And that'll happen for two reasons. One, some of them are going to get bought up. The acquisition then just starts going nuts. Well, it's three and a half billion dollars last month. There're just one of dozens of people buying agents. That'll shrink but what that means is the job gets tougher for every agency that doesn't get bought out because they're bringing huge amounts of talent, ability and capital to the dance.

So for an agency to thrive in the future, my theory is they have to be better than in the past. They can't get away with the same kinds of stuff they've got away with in the past. I also believe this, that you can't hit what you don't aim at. One of the things I see agents not doing is setting really clear goals for things like growth. And then the corollary to that is that people like Elon Musk, for example, he got where he got and other people wouldn't get where they get because they set big hairy audacious goals. And so there's nothing wrong with that because you can't hit what you don't aim at. Your 25%, 24.89% goal number for organic growth is really interesting.

I think that if you can't set a goal of 15 to 20% over a decade, which means probably in the first three years of your business, you've got to be growing 35 to 50% per year in the first three years. And maybe you slow that down to 35 to 25%, and then maybe 15 to 20 after that. If you don't set those kinds of goals, you don't develop the capabilities to be competitive into the future because the game gets harder, not easier. That's my thought, what do you think of that?

Michael Jans:

Think that the future of the industry belongs to the ones who know how to grow. Tony, neither of us are kids in this industry. I recall a conversation I had with George Nordhausen, the name you very likely remember.

Tony Caldwell:

Yeah.

Michael Jans:

This is back when George was quite active, right? When he got cranking, right? He had a list of 80,000. He figured there a reasonably 80,000 independent insurance agencies, back in the seventies let's say, okay?

Tony Caldwell:

Right. Right.

Michael Jans:

We went through a soft market and a hard market. We went through the rise of new generation, the baby boomers, and we went through... It's kind of a major technological challenge. It seems minor now, but back then, no. Agency principals were having to decide, are we going to get computers?

Tony Caldwell:

Yes.

Michael Jans:

And then they were showing up at PIA meetings or big guy meetings, and there would be a battle of the agency management systems, right? And now they had to decide, oh my goodness are we going to get one of those things? Right? But now we're in a really similar situation, major technological challenges. We need to learn a lot of new technology, there's a lot of them. We have a rising new generation, consumer behavior has changed.

And it's always a little bit difficult to predict what the pricing is going to be but this is a similar situation. I think it's not unlikely we'll see some contraction. One, well, the boomers are going to sell, we're going to see a lot of that. Now at the street level it doesn't look that different yet. At the street level whether an agency is owned by my neighbor or he sold to some guy in Michigan that runs a private equity firm, the customer may not know that.

However, at some point I'm expecting for it to be dramatically different. But I just haven't seen it. I think so far we are seeing the private equity firms really grow as a financial play, right? Acquire and flip and acquire and flip. They're not seeing very positive results of organic growth. In fact, I've heard from reliable sources that some of them are experiencing negative organic growth, well, very positive inorganic growth.

Tony Caldwell:

All right.

Michael Jans:

But at some point that model matures and they've got to run real businesses and really invest in their customer relationships. The independent, the one who's not owned, now is the time for them to put their growth plan together, acquire the skills, examine the technologies and put a plan together that's reliable for organic growth or it will be too late.

Tony Caldwell:

Yeah. It seems to me that successful agencies have got to do better at going forward than they have in the past. They've got to be better business people because first of all, the risks are bigger and the competition is stronger. And the things you've been talking about like the planning and really getting very highly focused in on the four or five things that cause you to grow and the people that you have to have to do that, all those things, the leadership we talked about earlier, all of that implies, you've got to be a better business person for the next generation of leadership in an agency than in the last generation of leadership in an agency. As you talk to folks in the business that are coming up and the folks that you're dealing with maybe even in a consulting way, do you see that these are better, sharper, more skilled business people or they're people still trying to catch up to where the future needs them to be?

Michael Jans:

Well, I'm not sure that magically that this generation is better. But to case in point, when I reflect back on the agencies that I've worked with that just really did scale, right? They really grew. Maybe they had started this before they had a relationship with me, that was irrelevant. The one distinction that I saw common among those who during the course of their career, they 10X or more, right? They had a small agency and then they had a really big, maybe dominated the state or something like that, or dominated niches. The big distinction was that they really perceived of themselves as entrepreneurs or what I would call insurepreneur.

First and foremost, and many of those super fast growth agencies had principals who would say, "I haven't sold a policy in 25 years." And 25 years ago they were small. There was an early recognition that the business of building systems that run the business was ultimately more important than selling a policy. Honestly, I think that people have the same challenges and there are lots of distractions, like a startup or smaller agency that principal is wearing 17 different hats, but one of them has to be insurepreneur. They have to be a system builder.

Tony Caldwell:

You've mentioned 10X a couple of different times. And I think when I hear that term I always think of Dan Sullivan, who is someone you know well and he said many years ago that it's easier to grow 10 times than two times. And when I first heard that, I thought well, he's speaking unequivocally. And I said that to him and he goes, "No, I'm serious." And then he explained and Dan runs an organization called the strategic coach, which trains entrepreneurs, right? That when you set out to grow 10 times, you have to do things differently than if you're going to grow two times.

And the whole idea is, do you have a linear mindset? Or do you have an exponential mindset? And it's back to what you accept and what you set as your goals. Do you set linear goals or do you set really big hairy audacious exponential goals? I don't know if you had this experience in your watch, Michael, but in mine, when I set goals they tend to happen. Earlier in my life I thought, I'm not setting very good goals because I keep hitting. And so I need to set that up. Then I hit those two. And what happens is if your goal focus, okay. You do what's required to hit the goal.

Michael Jans:

And it's often not. I think this would go back to Dan Sullivan's point, it's really never... The guy who wants to grow 10 times the size he doesn't get there because he works 10 times more.

Tony Caldwell:

No.

Michael Jans:

He builds a different system.

Tony Caldwell:

That's right.

Michael Jans:

And he looks for in the world in which he's operating, where the points of leverage, where can I put in a unit of input into the system and get 10 units back? And most people they're just too busy. And so it's almost as if the demands of day-to-day operations are the enemy of growth because they keep wanting you to come back in and take care of the details, and growth wants you to go build a system that takes care of those details for you.

Tony Caldwell:

Yeah. Let's help out the guy who's sitting out there thinking, "Okay, I want to do this. I want to build a really significant business. How do I do that?" What's your best advice. Okay. You want to be an insurance entrepreneur or an insure... How do you say it?

Michael Jans:

Insurepreneur.

Tony Caldwell:

Insurepreneur.

Michael Jans:

It's not in the dictionary, it's in the Michael James dictionary.

Tony Caldwell:

Yeah. I had a friend years ago that sold a manure and he was the newer one to our group.

Michael Jans:

Okay. Well.

Tony Caldwell:

Alright. You've got this agency and you are wearing 17 hats, the most important hat you are wearing is the entrepreneur hat, the business owner hat, the business person hat, but you're doing all these other things. What's the minimum amount of time in your work week should you spend on the business rather than in the business? Give them a target to hit.

Michael Jans:

I think this is the approach, gaining control, mastering control of your time, that's really critical. And there are some tricks and techniques that I've seen work really, really well over time with that. I'll share a couple of them. One is a little technique that I've been teaching for 20 years and a lot of people just really glommed onto it. I call it the rule of 46. And essentially all this says is that at the end of a month, look back at everything you did that month and see if you can find 5% that you can eliminate automate or delegate, that's it, 5%.

And the typical entrepreneurs working too many hours, which leads to burnout. If you take 5%, do that for a month, right? your overall amount of time, ideally it'll shrink so you have a little more free time to clear your mind. But you are free up 46% of your time in one year. Now the average guy thinking, "Gosh, if I had half my time free right now, I'd be devoting it to really cool stuff."

Tony Caldwell:

Right.

Michael Jans:

Okay. Even if you took, let's say it's out of a 40 hour week and you'd take 5%. Now you discovered two hours, right? Start there, two hours totally focused on building systems with high leverage, right? Focus on marketing, focus on building your team, focus on reviewing and designing the internal systems that get stuff done, and then take it from there. And then the other thing that I really encourage is that, if growth is important to you then... Everybody's biology is going to be a little bit differently, but in my world for example, the hours between when I get to the Kasita and do work for the next two hours until let's say 10:30 or 11, my capacity to produce is just much better than it is in the afternoon, right?

Tony Caldwell:

Right.

Michael Jans:

What am I going to do in the morning? I'm going to focus on marketing. I'm going to focus on growth. I'm going to focus on the creative activities, the innovation, those things. And so I do suggest that people who really care about growth, they look at their day, they see when their energy is just always typically the highest and schedule an appointment with themselves and growth.

Tony Caldwell:

Yep.

Michael Jans:

And don't let that one get sucked up into putting fires out for everybody because it feels so good. That's kind of the downside, is like, "Oh, I can solve everybody's problems because I'm so good at insurance."

Tony Caldwell:

Right.

Michael Jans:

And then everybody's like, "Oh Michael, you're my hero. You're my fireman. You put a fire out." And it's great by the end of the day you've maybe put fires out but you haven't grown the agency. That's my practical strategy for dealing with that stuff.

Tony Caldwell:

Great. Good. I like that. As you said, there's a lot of different ways to go about doing this. I think part of it is picking one and sticking with it. Let's see if we can bring this home a little bit. We're looking at the next five years, lots of challenges in the business, but you've been around for a long time. I know you enough.

Michael Jans:

Yeah.

Tony Caldwell:

But you've seen a lot and you're peering over the edge of the future. If you had a 22 year old child getting ready to launch, would you recommend the independent agency business to them if they were-

Michael Jans:

I would say if they were suited for the entrepreneurial life. Yes. I'm pretty bullish on it, but I think it's not unlikely that we'll see some disruption, particularly in the downmarket where the policies are simpler and the client's needs are simpler.

Tony Caldwell:

Sure.

Michael Jans:

We could see some disruption there. We could see some loss of market share there. But in general it's truly at the professional level and moving up market. Yeah. You know that people have been ringing the funeral bills for the independent agent ever since we've been in this business, right?

Tony Caldwell:

Right.

Michael Jans:

They threw the internet at us, right? And they said that was going to disintermediate it.

Tony Caldwell:

Yep.

Michael Jans:

And we were going to get knocked out of business. It's an industry that's been just remarkably persistent. The agency part of the industry has been persistent. And I think we're a very long ways away from a replacement for the advocacy, the authority, the education and the other thing, and this is more important than I think we often recognize, the humanity, the connectedness, the peace of mind that a client gets from feeling like, "I'm being taken care of by people." We're tribal species, it's just the nature of the human being. And so being part of a tribe, this is why feeling like you're part of it, you're connected in it, not just a transactional. Yeah. I bought my policy there, but like, you're really part of it. I think that has huge financial benefits for the growth of the agency.

Tony Caldwell:

Yeah. Well, I join you in your optimism and I do think your last point, this probably in my view is the most important thing to build on if you're building an agency for the future because over the last couple of decades, it seems to me that the industry has gone very transactional. Everyone's trying to be transactional. And that's exactly the opposite of what's going to be required to be successful in the future because people, to your point increasingly have fewer and fewer human connections because of technology. And so the ones that they do have become more and more value to them. If you want to have a customer for life make a friend, right?

Michael Jans:

Yeah. Yeah.

Tony Caldwell:

It used to be, "Let me tell you about your book of business and then your business. And I think we're going to be returning to that even more.

Michael Jans:

Yeah. Well, but I think that there's a difference of kind of a magnitude now, because back in the day, a producer for example, you'd have relationships measured in the hundreds. It's okay but there's some anthropological study around. The kind of the conclusion was the primates of which we're one, we can have reasonably close relationships with 141 people, but beyond that, it just gets to be kind of ridiculous. But now we can have relationships potentially with thousands that feel like there's a lot of substance there. We know they're not quite the same but they can have a lot of substance and a lot of value and then when let's say Tony, you and I have a conversation like this. Okay. When was the last time you and I spoke other than the podcast? It was 20 years ago, right?

Tony Caldwell:

Mm-hmm (affirmative).

Michael Jans:

But perhaps if you've read some stuff, saw some videos, heard about me, who knows got my newsletter, whatever, then when we have a face to face, and this one is face-to-face with on screens, right?

Tony Caldwell:

Right.

Michael Jans:

You know what? When those conversations surface they really can feel quite intimate. And so technology allows the savvy insurance marketer to create depth of relationship. And then when it's time for a phone call or a visit they can just be remarkably powerful.

Tony Caldwell:

Yeah. Yeah. Well, I think you've shared a lot of really practical thinking and advice. And hopefully there's some people out there who are paying a lot of attention to this and if they want more of it, They know how to get a hold of you, right? [crosstalk 00:49:12] and he's everywhere on the internet.

Michael Jans:

No, no, no. I'm not.

Tony Caldwell:

No. But you are easy to find. And marketing for the modern age of insurance is one of your vehicles and entities and you've been a coach to really successful insurance... How do you say that? I'm going to have to go practice it.

Michael Jans:

The insurepreneur

Tony Caldwell:

... Insurepreneur for a really long time.

Michael Jans:

Yeah.

Tony Caldwell:

One of the things, just as a sort of a parting thought that I've noticed, is that really successful people have a coach. Just like really good athletes all have coaches. Tiger Woods had a bunch of coaches, as an example.

Michael Jans:

Yeah.

Tony Caldwell:

And so coaching is so important to maximizing your own potential. You're someone who's coached a lot of really outstanding performers and you're still available to do that. And I hope folks will reach out to you if they want to have a further conversation, but I really appreciate our time today.

Michael Jans:

Love talking to you. Love talking to you.

Tony Caldwell:

Yeah. It was a lot of fun. I loved being on your podcast, totally different conversation.

Michael Jans:

Always good to connect with you, Tony.

Tony Caldwell:

Anyway, enjoy the rest of your week. And thanks for being with me. I'm talking to independent agency owners about this all the time. If you'd like to have a more personalized conversation, click on that button or the link in the description, and we'll make that happen. You can also reach out to me @Tonycaldwell.net/contact.