Winning Strategies

Avoiding the semi-successful trap

Reaching a plateau can result in a dead end

By Roger Sitkins

Do you ever wonder what distinguishes a successful independent agent from a super-successful one? Too often, we see that producers will reach a point in their careers where they’re doing pretty darn well—and then they shut down.

Being a producer in an independent insurance agency is a great career—you can earn whatever you want, with the only limits being those you put on yourself. Consequently, producers can quickly get to the point where they’re earning $100,000-plus.

Of course, “quickly” is a relative term. We’re talking about the “average” producer, which means that it may take 25 years for some producers to get there.

Taking home $100,000-plus a year sounds pretty good—and it is. Certainly, it puts you in the top 5% to 6% of income earners in America, enabling you to have a nice house, drive a nice car, join a country club and send your kids to good schools. Unfortunately, just when producers are hitting their stride, they fall into the trap of everyday “busyness.” They get in a rut, doing the same thing day in and day out.

And therein lies the rub. We’ve observed that when a producer’s book of business hits the $300,000 to $400,000 range, they tend to plateau, as does their income. Unfortunately, in today’s world, annual income of $100,000 to $150,000 rarely translates into financial freedom. The reality is that most producers are experts at spending what they make, and then some.

When they hit a plateau, they get stuck in what we call The Semi-Successful Trap. They never achieve true financial freedom, which we define as “the ability to do what you want to do, when you want to do it, how you want to do it, with whom you want to do it and how often you want to do it.” In other words, at any point, you can write a check if there’s something you want to do, give or acquire.

Producers who get caught in The Semi-Successful Trap never really have that luxury. They’re doing pretty darn well—way better than most people—and are making more money than their friends and peers (and probably their parents). They have a lot of material things. Life is good. But it could be great if only they’d recognize the behaviors that are keeping them trapped.

Common traps

Hiding behind activities. Often, producers have a smokescreen of “stuff” that they’re doing. Unfortunately, they may not be doing the right things. They appear to be constantly busy and because they’re semi-successful, they aren’t really motivated to change.

I recently had a lengthy coaching call with one of our members concerning one of his producers. After less than three years, that producer has almost $500,000 of commission income on his book. In fact, almost $300,000 of that was earned in a single six-month period. However, since then, the producer has done very little, due to his hiding behind activities and indulging in unproductive behaviors. My challenge for the member was to debrief the producer and find out what he did during that six-month period that he’s not doing today and start replicating those behaviors.

ITB or ITG? As our member discovered, his producer had gotten stuck, as many producers do. They do really well for a while and then they fall off the wagon, so to speak. They sabotage themselves by no longer doing the right things, or they begin to coast. In this case, the producer did so well that he thought it would always be that easy. So he stopped making the right calls, quit networking at a high level and failed to follow through with prospects.

Obviously, the producer had fallen into the trap of ITB (I’m Too Busy) vs. ITG (In The Game). Quite often, we’ll see producers who should be In The Game, but aren’t. They’re working more in their business than on their business, which is a mistake.

No personal business model. Typically, producers hit a plateau because they don’t understand that they’re the CEO of their own company: Me, Inc. They lack a personal business model with an end in mind (for example, having 50 clients paying $20,000 each). They’re not thinking out far enough in terms of what they want in the long run. And because they think they’re doing everything right, they stop doing the very things that made them successful. As a result, they end up dead in the water.

No profit model. As CEO of Me, Inc., every producer should be doing a monthly profit and loss statement. For many producers, income happens at work and expenses happen at home. That’s a typical trap. It’s rare that we see an average producer who is socking away sufficient funds each year toward retirement, because they don’t really have a profit model defining their personal income goal vs. expenses.

At a minimum, they should be realizing a 15% to 25% personal profit each and every month. The reality is, they’re not.

Comfort zones. One of the things that we see among producers in The Semi-Successful Trap is that they have two comfort zones: CZ-1 and CZ-2. The first comfort zone is from 8 a.m. to 5 p.m.; the second comfort zone is from 5 p.m. until 8 a.m. If you ask producers caught in The Semi-Successful Trap in which zone they are more comfortable and in which zone they are less comfortable, the results might surprise you.

For an average producer, the greater comfort is in Comfort Zone 1, between 8 a.m. and 5 p.m. That’s because when they go in the office, they have stuff to do, clients who like them, teammates they like and the freedom to leave when they want to leave. Best of all, they’re well compensated for their efforts. It’s a pretty great life!

The frustration tends to lie in Comfort Zone 2, when they go home. Despite their above-average income, there’s still financial pressure. They may be concerned about their ability to pay for a top-notch education for their children, afford a family vacation, help out their parents or contribute more to their church. They realize that being semi-successful is not the same as having financial freedom. But they’re not quite there.

The only way producers can get comfortable at home is to get uncomfortable at work. And to do that, they must examine what they’re doing that is holding them back from true financial freedom (not to be confused with “doing pretty well”). Remember the old saying, “What got you here will keep you here?” That’s true of producers.

Consequently, if they want to escape The Semi-Successful Trap, they’ll need to go over their accounts and make some tough decisions. For example, they need to decide the size of accounts they’re willing to work on, the number of customers they really want, how they plan to hand off the service, whether they’ll trade down accounts and if they’re willing to slow down to grow (i.e., having greater revenue from fewer customers). Those are uncomfortable decisions, but producers who want to be truly successful will make them.

Solutions

The following solutions are the keys to getting out of The Semi-Successful Trap once and for all.

End in mind. What will the end of your career look like? How long do you want to stay in this business? Producers must be able to envision it—as well as the milestones along the way—in order to make it happen, whatever “it” is. For instance, if you want to grow your book of business from $500,000 to $1 million in the next five years, your milestones will be net new revenue of $100,000 per year. Or let’s say you want to go from 100 clients down to the 40 most profitable ones. What is your timeline? Five years? Ten years? As long as you continue to hit your milestones, you’ll realize your goals.

Focus on HPT and ROI. To be truly successful, producers have to do a much better job with their High Performance Team, defining its focus and constantly reinforcing it. We always emphasize that it’s all about ROI—retaining and obtaining ideal clients. That must be an ongoing focus.

Personal financial model. You absolutely have to establish how much profit you need to make each and every month in Me, Inc. Are you managing toward it? Do you have all of your personal finances in Quicken or some other money management program that enables you to run an actual P&L each month?

Be in the game. You must set up a model establishing the amount of face time you will spend with clients, prospects and centers of influence. Keep in mind that “90% of what you do out of the office is better than 90% of what you do in the office.”

Never assume. All too often, average and semi-successful producers assume they know what their clients want. They assume that they’re doing a good job of team management. And they assume that they’re pretty well connected and have a good personal brand. But in reality, they don’t. This leads me to my final point.

Never get too comfortable. Even when they’re in the “discomfort” zone, semi-successful producers know they can always return to their comfort zone at the office from 8 a.m. to 5 p.m., where things are going pretty well. In contrast, the most successful producers know that they can’t stay where they are today, no matter how great things seem. They realize it’s not acceptable over the long term. More important, they understand what they must change to get out of The Semi-Successful Trap and achieve true success: Personal Financial Freedom.

Are you willing to settle for semi-success? If not, are you taking the necessary steps to achieve financial freedom?

As always, it’s your choice.

The author
Roger Sitkins, CEO of Sitkins International, Inc., offers his Vertical Growth Experience™ programs exclusively to his client group, known as The Sitkins 100™. These programs focus on continual improvement of agency operations, thus providing members with ongoing development and strategies that force vertical growth in the agency’s critical indicators of Closing Ratios, Revenue per Employee, Revenue per Relationship, and Revenue per Producer.