Michael Jans: Clinton Houck, so glad you could join us today. How are you?
Clinton Houck: I’m doing great. Appreciate you having me on, Michael.
Michael: I’m excited about this in part because I know some of the things that we’re going to be talking about [chuckles]. Why don’t we first start with a little bit of the thumbnails to catch you about who you are and how you got to be that way?
Clinton: Yes, absolutely. Like so many others in our industry, I grew up in the insurance industry. My parents were on Ace State Farm Agency out in Pennsylvania, about an hour and a half west of Philadelphia. My childhood was growing up, going to insurance conventions and agency trips and what better way to motivate an individual wanting to go into the industry than getting to go on agency trips around the world.
Michael: All that fun stuff, right on?
Michael: Okay. Good. Literally, your childhood was an insurance childhood.
Clinton: Correct, absolutely.
Michael: Like a lot of our listeners and a lot of my clients, okay, and then what?
Clinton: I graduated from college in 2008, right when the economy collapsed, and watched a lot of my peers lose job offers that they thought were locked in place and had to figure out what they were going to do with their career. I had the opportunity to become a commercial fire underwriter. Not necessarily the dream job that folks have coming out of college, but I had the opportunity to have a job coming out of college.
Michael: [laughs] You had a job. You know what, hearing that little bit of your story makes me think episode number two with Clinton would be what’s really like to be a millennial with college debt and then boom, the recession hits and you got– and job offers were scarce and your friends are falling by the wayside, because that’s an important part of the insurance environment that we’re all living in today-
Clinton: It is.
Michael: -both in term of like in your case, employees, potential employees, and, of course, an insurance consumer. In any case, we’ll do that in episode two. You had the dream job; commercial fire underwriter–
Clinton: Yes, and I spent about 18 months doing that role working in a cubicle of a corporate office building looking at upstate day in and day out. While it taught me the fundamentals of the business, definitely it wasn’t where I wanted to build my career. Again, growing up in an agency family being on– seeing the sale side of the industry, my desire was always to go and open an agency myself.
Michael: Yes, because of the trips [laughs].
Clinton: Yes, absolutely. Underwriters don’t get to travel, it’s a shame There you go. I opened my first state farm agency when I was 24 years old. [crosstalk] did that in the suburbs of Philadelphia as well. Spent a little over three years building a traditional brick-and-mortar agency with a lot of the old school fundamentals and profits, that’s how my parents built their agency. One quick story there was build my recognition. I literally went door knocking through neighborhoods in the middle of August with road atlases, with stickers with my face and information on it just to introduce myself to the community.
Michael: Would you do it again? Is that what you teach your agents to do now?
Clinton: No. It’s been a radical transformation from that experience
Michael: Yes, but that’s kind of the story of the industry, right? Because my guess is mom and dad did something like that back in 1985 or whatever, right? I don’t know if they were passing out road atlases, but that’s an old industry standby. SafeGo had the road atlas program a generation ago and it lasted for years. Then what?
Clinton: And the index card in your pocket to collect prospect information. Everything was very much a manual paper process.
Michael: Yes. Okay.
Clinton: To that point, recognizing very early on in my time as a State Farm agent that our industry was really behind, and that we’re using a lot of outdated systems, tools, technology processes that other industries seem to have already figured out but we hadn’t yet. This was around the time when Internet leads were becoming really big as that new server board solution that all agents had to jump on board and start paying $10, $15, $30, $40 for an Internet lead and yet we were seeing diminishing returns out of it. The close rates were plummeting, but the costs seemed to be going up.
Michael: Okay. It was so interesting that you said that because that was a very part of the conversation that I had with an agent who was a guest that I recorded yesterday. Quick interruption, when was that that you– What year are you talking about?
Clinton: That was 2012, 2013. It was starting even earlier than that, I spent some time as a agency field specialist for State Farm, working with agents in between, becoming an agent in my underwriting days. That was one of the big frustrations that a lot of agents had in the early or about 2008, ’09, ’10 time period was that tide really started to turn.
The early adopter agents were having a lot of success with Internet leads, but then all of a sudden the lead companies got greedy, the agents got greedy, the quality of leads started dropping because the lead was being sold 30 times and somebody would fill out their information, their phone wouldn’t stop ringing for three months. It just became a really bad experience for everybody involved.
Michael: Set aside the fact that 86% of consumers don’t want inbound calls from insurance agents. Now we’re calling them for 90 days straight [laughs].
Michael: The industry’s stiller reputation is plummeting even further. All right. I do have a serious question for you, just I’m curious. Your observation, what’s the state of the lead gen industry now, the purchased lead gen industry?
Clinton: I think it’s come close to bottom here, at least in the insurance industry where the fly-by-night lead gen companies have gone out of business or going out of business, and those that are left are trying to repair and rebuild their industry. There are still good Internet leads out there, and there are still agencies that are making that model work, but it’s a whole different look and feel of how you run and build an agency around an Internet lead, a third party Internet lead, purchasing-type of business model than what I would call a modern agency which is a blended model and self-generated leads from [crosstalk].
Michael: Right. Wouldn’t you agree that there’s a world of difference between a third party lead where you’re calling up a stranger who wasn’t asking for you, didn’t have a relationship with you, isn’t necessarily attracted to your brand or your value prop, they may not even know you, versus the lead who comes in because they want you, a first party generated lead? So they’re– yes, clearly.
Clinton: They’re coming through your website, not cheapinsurance.com or anything else, right?
Michael: Right. Then what really would be interesting to analyze would be not only the difference in the closing ratio, but the difference in the retention.
Clinton: Absolutely. That is what partially led me down my career path. After a little over three years with running my State Farm agency, I had found a local region company in downtown Philadelphia that I had partnered with more or less a handshake agreement where they were generating leads and I could work directly with the co-founders of the company. They were providing leads to my agency.
Even though is was a digital Internet lead gen, they were only able to send it to me via email. I was literally printing out the leads and handwriting, my team was handwriting the results and feedback of them, but it was working for us to some extent, but our close rates and what was more importantly, the cost of acquisition, made sense financially. I ultimately surrendered my State Farm agency to partner with this company, to found a completely digital online independent agency as a subsidiary of their lead gen company.
Michael: Interesting. Again, what year are we in now?
Clinton: That was 2015.
Michael: Okay. Your vision was to have a completely digital agency?
Clinton: Correct. Really what it came down to was saying, “Are we communicating through the channels that customers and consumers want to communicate through, and are we leveraging technology to deliver on the promises that we make to our customers?” We were missing out on delivering on the promises with the traditional styles and the traditional tools that we had at our disposal in the capital space, where I could potentially deliver better on the experience and on that promise running a digital agency leveraging the tools that existed out in the marketplace. We weren’t really inventing anything new. We were just using what was available, adapting it from other industries to apply it to the insurance industry.
Michael: Okay. All right. Without spending a lot of time on this, what were some of the tools that you felt were necessary? What were the kinds or categories of technologies that you felt were needed when you were creating this vision?
Clinton: One of the key areas which I know many agencies do today now, is just integrating the concept of texting as a core method of communication. One of the big challenges if you see a number on your phone that you don’t recognize, you send it straight to voicemail. Contact rates were extremely low for a person that was shopping for insurance online, trying to get an answer online, and then getting a random phone call from a number they didn’t recognize after they filled out a form that they thought was going to give them a quote.
One of our solutions was just implementing a platform that sent out an immediate text as soon as a form was filed out that said, “Hey, we appreciate your request in a quote from us. You’re going to be getting a call from this number in a couple of minutes with your rate quotes.” That way, they need to look for our phone number and not to ignore it. That was just one simple piece of technology that is readily available for anybody that uses a voice phone system, or Twilio for those that are a little more tech advanced or have a tech team, to be able to implement into their agency today.
Michael: The frustration was somebody did reach out to you, correct me or tell me where I’m wrong in the story, somebody reaches out to you or there’s a conversation somewhere, they want a quote for something. You do the research and analysis and you get the appropriate policy recommendation. You call them and they don’t recognize that number and, of course, they think it’s spam and they send you off into voicemail. Is that what it–?
Michael: Okay. The solution was, shortly before you called them, what did you do? You texted them?
Clinton: Yes. Our process was literally as soon as somebody would complete the online form through our website requesting a quote, it would kick out a text basically and nearly at the same time. Then we had a lead management software that we used that prioritized all the leads and set the workflow for our producers, so our producers didn’t even have to think about who they had to call or when to call them, the system did that for them.
We’d call them in less than a minute as well, and get them on the phone and start that conversation. Best case scenario was to close that piece of business in 20, 25 minutes with one phone call and one text. That was our dream basically.
Michael: Got it. Okay. Yes, that’s a dream. Was that software, that lead management software, was that industry-specific or generic and you made it work?
Clinton: No. The insurance was one of their industries, the mortgage business was their other big one.
Michael: Got it. All right. Then what happened? I think the next step is somehow you ended up at State Auto, what happened?
Clinton: [laughs] Yes. It was interesting. State Auto wasn’t one of our primary carriers in our agency. However, when I got an opportunity to just talk to them and talk to the territory manager that had come to our agency and they’d seen the way we were operating and doing our business, they asked if I’d be willing to talk to one of their product folks. I got to have a very enlightening conversation to see a carrier that was trying to evolve and recognize that we have to adjust our technology to meet the way the consumers are shopping today, and we have to integrate our technology in a much greater fashion into the tooling systems that agents are using today to be able to meet the changing customer expectations.
I hadn’t had a conversation, at that point, with any other carrier that got it yet the way that State Auto got it. Probably six or seven months later, there came a time for me to look for a new opportunity, for some professional, personal reasons and I reached back out to State Auto and they brought me on out and we had some conversations, saw that we had a shared vision and they asked if I would come on board and help modernize the independent agency channel and support the growth of the independent agents.
Michael: All right. I think you just gave me your job description; you’re trying to modernize the independent insurance agency channel, right?
Michael: At least that part of the channel that is associated with State Auto?
Clinton: Yes. Our focus is the independent. My focus primarily is the independent agent themselves, so I have counterparts inside the organization that works a lot on the State Auto technology and platform, but my focus–
Michael: Exactly, right. You’ve raised one of the challenges of the independent agency channel, I think, unlike, let’s say, a different channel, let’s say, the direct. If they recognize that there are changes in consumer behavior, then they change their behavior. You are attempting to change the behavior of this species known as independent insurance agents, over which you might have influence but you obviously you don’t have control.
Clinton: Right, absolutely.
Michael: Obviously, that’s a challenge that you share with a lot of your peers, but interesting challenge [laughs]. I think maybe my next question is, how are you doing that? First of all, how long now have you been there?
Clinton: I’ve been with State Auto just over a year and a half at this point.
Michael: You’ve had 18 months. You’ve had 18 months, have you modernized the independent insurance agent yet?
Clinton: I’d like to say that I work that fast, but no, unfortunately, we haven’t scaled yet to that success. We have, I believe, found that–
Michael: I’ll bet you’ve had some influence and I’ll bet you have some stories to tell about agents who are ahead of the pack, versus those who are in the pack or behind the pack, right?
Michael: Okay, so we’ll get to that. All right [chuckles]. This is really the theme of this whole podcast series, is getting the independent insurance agent of today into the modern age and connecting with the modern consumer and proving value to the modern consumer. So that takes us to your current position. Share with us some of the things that you’re doing at State Auto to make that happen and that you think are working.
Clinton: Yes, absolutely. The first component of it is there is so much information out there now. The industry has caught on, bought in, recognized that this change is coming or is here. Now it’s a race to figure out how to actually embrace that change in a meaningful way. The challenge that comes with that, especially as an independent agency where you’re the CEO, the head HR, the CMO and many times the core producer as well, the time, the energy, the knowledge, the finances to be able to do that can be overwhelming. I see a lot of agencies just stick their head back in the sand and go, “I would like to [crosstalk] too much there for me to do.”
Michael: Well, because and after all, Thursday feels like Wednesday did, and Wednesday felt like Tuesday did and Tuesday felt like Monday, so maybe the place isn’t burning down after all, right?
Clinton: Right, to an extent, but there’s a lot of agents out there that a few years back absolutely, but it’s interesting over the last year and a half, I’ve seen a really significant shift in philosophy there for a larger percentage of independent agents that go, “Yes, I used to think that way, but I’m now recognizing that I can’t think that way anymore.”
Michael: Presumably, I think I’ve shared similar observation a lot more starting to do something about it, but I want to go back to something you said about the sheer volume of information about digital technologies and digital marketing, and the Internet, and changes in consumer behavior and all that stuff. Do you sometimes find that the agents that you work with, they do recognize the change, the shift is dramatic, they are motivated to make that change and nonetheless because of the sheer volume of information, they’re a little bit bewildered and confused about where to start? And, of course, the next marketing guru is saying, “Do this” or “Do that” because they’re selling this or they’re selling that.
Clinton: Yes. That was the first big hurdle that we realized that we needed to help agents solve. That came in as a two parts to a solution. The first was to structure the thought process around this; how do we help an agency, start thinking about what part of their business do they need to focus on first, and which tools out there in the marketplace would actually help them solve that first part of their business?
Michael: I’m really interested in that. When you say structure the thought process, do you have a model that helps them do that?
Clinton: Yes, yes. Really just brought it down the four questions. When I talk to an agency in the first five minutes of our conversation, these four questions are going to come up. It’s going to be of these four questions which one of these do you feel you need to answer the most or is most pressing for your agency? How do I attract visitors to my business? How do I turn visitors into leads? How do I turn leads into clients? And how do I drive the lifetime value of those clients?
Michael: Okay [laughs]. It’s like–
Clinton: Those are the four.
Michael: It’s really similar to the A core model which I think our listeners have heard me talk about for some time. Okay. So how do I track visitors, how do I turn visitors into leads, how do I turn leads into customers and how do I squeeze juice out of the customers create a maximum customer lifetime value? Okay. Now I want to pursue this for a moment. My first question is what’s the most common answer?
Clinton: The most common answer right now is the how do I attract visitors to my business and how do I get leads.
Michael: [laughs] All right. Now, here’s my next question. When they provide that answer, do you think sometimes maybe they’re not quite right? Here’s why I’m asking and I’ve got– I mean this is something I’ve got a lot of experience with. It’s so often with insurance agents and entrepreneurs in general, if they want growth and knee jerk reaction is, “I need more leads.”
They’re sitting on whatever 3,000, 5,000, 10,000 customers with literally 10 years worth of untapped value that they could go generate from their existing customer base, but the response is so often, “I need leads, give me more leads.”
Clinton: Right. That’s where our next part of our conversation starts leading into their numbers, saying, “What are you tracking currently? What are the KPIs that you focus on? And then what are some metrics that maybe you haven’t been focusing on that help bring illumination?” A perfect example of this is when we talk about leads, for example. Folks always focus on conversion rate. What’s my conversion rate? What’s my conversion rate?
When really the focus there needs to be what’s my cost of acquisition, rather your conversion rate is 20% or 80% in any given channel, the question is, is the cost of acquisition economically viable to generate a profit for your agency for that channel? If the math makes sense, the conversion rate isn’t near as important as the cost of acquisition.
Michael: All right. I have a question for you. Let’s say you go to 100 agencies and you ask, “What’s your cost of acquisition?” How many of them know the answer?
Michael: Okay [laughs]. That’s because they went to your earlier workshop. All right.
Clinton: [laughs] It creates that starting point though. It starts the thought process in the right direction of how do we approach this and think about this, versus the conversation going all over the board.
Michael: Okay. Let’s break cost of acquisition down for a moment. When you do this with an agent, typically what are the elements that go into the cost of acquiring a client?
Clinton: You’re going be looking at the cost per lead for your–
Michael: So there’s all the costs to get them in the funnel to begin with.
Clinton: Yes. Then it is the cost of the actual quoting process itself and the employee time associated with the quoting and closing of that client, and then the cost of the tool or systems that are utilized to be able to close that client.
Michael: Okay. All right. So to keep it relatively simple, at some point you can’t cost allocate everything, you’re probably you’re not going to cost allocate the electricity bill that month has to be spread among them. You get a– but you still you get a fairly accurate, from a marketing point of view, you get a fairly accurate sense of cost of acquisition?
Michael: And then where do you go?
Clinton: From there, we’re looking at– and again, it depends on their market area and it depends on how they’re generating those leads. For those clients that are, let’s say, purchasing leads from that third party, so just to go back to our earlier conversation of third party Internet leads, we’re going to look at that and say, “All right, then what’s the average lifetime value of those leads? What’s the average lifetime value of your current book of business and clients? Do you know that by marketing channel?” Because if you’re saying the average lifetime value, I’m assuming eight-year average lifetime value of my customer, but most of my customers come through referral, if you apply that to buying Internet leads-
Clinton: [crosstalk] be way off.
Michael: Because the referrals– here’s a little known fact that I’ve probably shared before, according to Bane’s research, a referral that comes from a loyal customer comes pre-baked loyal. Weird part of human psychology that we all should be aware of. Then obviously a purchased third-party Internet lead [laughs], they don’t come pre-baked loyal, they probably come pre-baked suspicious.
Clinton: Correct .
Michael: All right. Then where do you go from there?
Clinton: You’re looking at a balance between what’s my cost of acquisition and what’s my estimated lifetime value, and does the math make sense? Am I generating revenue? When does my cash flow break-even for that customer? And at least for– and I can’t speak to every agency, but for me and my agency at my time, I was looking for a one-year break-even point [crosstalk] a year’s worth of commission to write that piece of business. Then for an Internet lead, years two and three, we’re going to generate my profit.
Michael: Got it. All right. When you’re working with agencies, how do you think they decide what to do or how do you advise them on what to do first? Does it come out of this analysis generally?
Clinton: The analysis starts here. Usually once we start getting into that type of conversation in either the end of our first call or into our second conversation with them on that, that’s when the the eyes can sometimes start looking, like the deer in the headlights of, “Okay, this sounds great philosophically but how do we get from a philosophical conversation to actionable item?”
Michael: They need some winds, right [laughs]?
Michael: All right.
Clinton: That’s where a lot of times, again, this conversation is going hand-in-hand with this agency saying, “Hey, we’re also trying to modernize the way that we’re presented online. We recognize that consumer habits, that 80% of consumers are shopping online or doing research online during the process. Now they still may buy over the phone or in person majority of the time, but they’re using the Internet to research that product service brand or agency to say, “Should I do business with these folks?””
Michael: It’s almost always a mixed media journey?
Clinton: Yes, absolutely. Then we start there because those are easy visual wins for a lot of agencies. Our industry is still relatively uncompetitive in a local market area for individual agents where agents can win with some pretty low hanging fruit there. We focus a lot with those agents on Google reviews and fundamental level content creation to start boosting the rankings of their website. That usually ends up being step one [crosstalk]
Michael: Hang on a second here. You work with them on Google reviews and did you say content creation?
Michael: Okay. I thought I heard you say that and I thought maybe it was too good to be true, I just wanted to confirm. Now their rankings are going to go up, do you typically, if they commit, I’m just throwing out a number, 60 days or something, they have to get some good reviews, they have to create some content post it on their site whatever. 60, 90 days later, typically do you see that they start seeing a difference in that very first question you asked how do I get more visitors?
Clinton: Right. That’s what ends up starting to drive that. A lot of times we’re teaching them how to/or refreshing how to log in to Google Analytics that their website provider set up for them originally. Just a very base level of how do I look at my Google Analytics to understand where I’m at today.
Michael: I love that and I often consider that to be kind of a relatively advanced skill set because it’s baffling for so many people. What do you encourage an agent to do with Google Analytics?
Clinton: Again, to your point, there is so much you can do with Google Analytics at that point. We focus on just baseline to say, let’s look at your traffic trend over the last 12 months and show them how to see how many visitors came to their site, specifically new visitors. Return visitors, I’m not as much interested in because a lot of those are coming from people that already know the agency. We run a couple of other reports [crosstalk]
Michael: Nonetheless, some value. If, in fact, they discover the customers are coming to get content of value, then that’s cool stuff. It’s difficult to turn that into– to assess the modernization of it, but we know it’s there, we know they’re finding value there.
Clinton: We start with saying how do you Mr. or Mrs. agent measure this? Because if you don’t measure it or you don’t know how to measure it, then you don’t know how to qualify it or justify it from a time energy investment. This is where a lot of SEO firms or third-party firms that agents have felt like, “Well I got [unintelligible 00:36:35] on.” This is why because the firms didn’t take the time to help these agents understand what to measure and how to hold accountable the firm and the agency themselves. We always start with the how do I measure this process to deem it successful or unsuccessful?
Michael: Got it. All right. They are optimizing their website, what else do you think they should do?
Clinton: The first piece is just attracting visitors to the website. You brought up optimizing the website, I consider that a separate step in the process. The attracting visitors, the search engine optimization, that’s a digital version of the sign that you have hanging out in front of your office. That attracts people to let them know you’re there. The website optimization itself or the website design itself is your digital representation of your physical office. That’s what when they come in the door they get that good first impression that says, I want to do business with the folks here. I want to do business with this insurance agency over another insurance agency.
That’s what your website is meant to do. That its primary purpose is to generate leads for your agency. Shortly, as when you see new technology rolling out here pretty soon it should be not just to generate new leads, it should be to actually generate new business for you. That then you get to follow up and better relationship with after the [crosstalk].
Michael: Okay. Got it. All right. Let’s talk about a website just very briefly, if there were two or three things that you think most agents could do to enhance the site itself, what do you think they should be?
Clinton: First one is simplify. Minimalist from the sense of the amount of writing that’s on the homepage, of the scrolling pictures, there needs to be singular focuses calls-to-action that grab the visitors eye. Everything that’s on there should be focused on driving that person to request a quote from you. A perfect example of this is the top bar menu with all the options of where somebody can go on your site. Agencies that I see have the most success will pick the one or two product niches that they lead within their agency.
You may be a generalist agency that offers personal lines, commercial lines, health life, retirement planning, you can do the whole gambit, but if you know that you lead through the garage, you lead with auto insurance in your market area. Then that top bar should be about us, auto insurance other products [crosstalk] or lead, make it easy for them to find what you’re trying to rank for online and what you’re trying to attract visitors to your business.
Michael: On the top bar you will like to see about what, four categories?
Clinton: At most.
Michael: At most, okay.
Clinton: About us is one of them, because while we may be doing our research digitally as individuals or as consumers, we still want to do business with people.
Michael: Right on. I’m no longer engaged in day-to-day operations at Agency Revolution. One thing we discovered was that the second most visited site was the about us or the team page.
Clinton: You want a great example of that, Stewardship Insurance does a great job with their about us section and integrating technology to create a personalized experience. You go out and look at their about us section. It’s videos of their staff and their personal interviews and they’re relaxed. After watching a 30-second video about a team member, you trust that person [crosstalk]
Michael: I love that. That’s beautiful. That’s stewardshipinsurance.com?
Clinton: It is actually their website, moneywellrooted.com but the Stewardship is the name of the agency.
Michael: Very cool. I have a feeling they’re going to be getting lots of non-insurance consumer visitors in the next few days [laughs].
Clinton: They will, on their about us section. [crosstalk] guys, I’m going to [crosstalk] your Google Analytics [crosstalk]
Michael: If it wasn’t for Clinton, our numbers would have made sense.
Clinton: Your point about the other aspects of the website, that big call-to-action button in the top right hand corner that says, “Get a quote.” The contact phone number in the top right hand corner that somebody knows which number to call, when they hit your page they should be able to answer the most pressing question immediately and that is, “How do I find a quote from your agency?” The other pages they go to short forms and even they get a quote button five fields or less. I know that some of the comparative raters let you put the live quoting option on your page. If you counted up, a lot of those are 90 plus fields of information, nobody’s going to fill that out [crosstalk]
Michael: They’re kind of a lead killer, aren’t they?
Clinton: They are.
Michael: While there was a dream I think that our customers would discover that the Internet turned them into our CSRs.
Darn, they’re still customers. They’re not going to do all of our work for us.
Michael: Is your experience that when agents put the live quote form on their page that they really don’t work?
Clinton: Yes, conversion rates, lead conversion rates drop dramatically.
Michael: I’m pretty sure I predicted that to my audience, at least 15 years ago, but a lot of people said, “No, no, no, this is the way with the future.”
Clinton: What is exciting though, is there’s been learnings from that. This will be my small-scale– I promise I’ll keep it small. We’re working on a white labeling quoting solution that pulls in third-party reports. Really all the customer would need to do is fill out just the basic contact information that we would normally expect them to do in a short form, then we’ll source the third-party reports to be able to provide a real-time and relatively accurate quote without running MBR and clue, right on the agency’s website. It can be a stronger lead magnet because you’re answering more of that question for that consumer.
Michael: Right on. Of course, let’s have a longer conversation about this some other time. Of course, it does put price first and foremost, tends to make price the distinguishing feature, which, again, we can talk about a philosophically later.
Clinton: I’ll give you my quick rundown on that too, going from a traditional brick-and-mortar State Farm agency to running my digital Internet lead based agency. When I was at State Farm agency I sold by building a very strong relationship first. I went out and did all my own home inspections, I looked at the pictures of the kids on the wall. I measured the house and talked about their upgrades and I spent [crosstalk]
Michael: You invested a lot in the beginning of that relationship.
Clinton: I could sell over price and I had to because I only had one carrier I could represent. There was no way I was going to always be price competitive. The consumers that worked with me appreciated that. On the flip side, the online consumer that’s going online and filling out a request for a quote, it is, “You’re going to build trust with me if you can meet my immediate need. Then once you show me that you can meet my immediate need, then I’ll let you build a relationship with me. Then I’ll let you talk about cross sells and multi-lining and packaging and upselling the umbrella policy.
Show me you can help me with my auto insurance, then I’ll give you the opportunity to talk about everything else. If you’re not willing to do that first component with me, then I’m going to hang up the phone on you because you’re not actually helping me out with what I asked you to help me out with, you’re pushing your own agenda.” And that was an experience and a learning experience that I had to have and adjusting to how my producers sold in my digital agency compared to my traditional brick-and-mortar.
Michael: You had mentioned that, I assume it’s State Auto, is working on a way to make, at least, premium indications available relatively quickly. What else is kind of– again, don’t share anything that’s so proprietary that you’re going to be looking for your next career move. I know that State Auto has a philosophical commitment to this industry and to thriving in the modern era. What else is going on that you think is going to help carry the independent insurance sector there? What are the kinds of things that the company is doing?
Clinton: For us and for the industry in general, it’s how do we continue to communicate information in the way that the customer wants us to communicate that information? We spent the last three years rebuilding our entire technology stack on the backend to become a completely digital insurance carrier. Everything is paperless, everything is eSign, everything is credit card payment and EFT payment. Early on in this process, we did get a lot of pushback from agents going, “What about those customers that pay in cash? What about those customers want to do this sweep and we want to do the sweep payment and they want paper copies of their policies? You’re going to lose a lot of business from doing that because that’s how people want to do business today.”
Michael: The answer was what?
Clinton: The answer was, “Have you asked your customers that? Is that a gut feeling or is that from experience in the marketplace?” I’ll give a couple examples of that. I do go out and talk to a number of agencies in office and work with them one-on-one. Early on in particular, I remember going to a town where two agencies, same town, it was a farming community. One agency said, “Your model will never work because we have farmers that want to pay in cash and they’re farmers. They’ll never buy into this.” I went across the town and talked to the other agency and he goes, “This will be great. I have farmers that come into my office. They pull out their smart phones. They’ve got automated irrigation systems, they’re showing me their crops from the drone point of view, all the smartphones apps.”
Michael: They’re geo-fencing their crops [laughs].
Clinton: “They’re larger adopters of technology and we are. They’re going to love this [crosstalk]”
Michael: You think it’s because it’s agriculture, it’s old-school, no agriculture is new-school.
Clinton: Absolutely. We just need to adapt to meet the way that our consumers are doing business. The agencies, they continue to do that as well and blending that combination of leveraging technology to personalize creating more personalized insurance experience. When agencies that try to replace the personalized experience with just technology that’s not a win. Agencies that don’t embrace technology that’s not a win either, but that blend of both worlds that’s where the win occurs.
Michael: Got it. All right. Without naming names, unless you want to, can you think of an agency that really gets it and executing on it and could say to the industry, “This is the way to go because I know it works because my numbers prove it.”?
Clinton: Yes, absolutely.
Michael: What do they look like? Give us a little bit of a picture, not a picture of maybe the agency five years from now, I mean an agency right now that is executing on these digital strategies that you’re talking about, and they’re really entering into the modern age. Give us a picture of what that looks like.
Clinton: Absolutely. One from a staffing set up. There’s a clear delineation of roles. There is no longer the combination of a CSR and producer. You have a customer service team or you’re using a service center for a carrier and you have producers. Producers are just focused on selling, service is focused on servicing with finding pivot opportunities to upsell and push that back over to the producers. From a staff standpoint, there’s two defined roles there in that sense. They also have either a in-house marketing team or [crosstalk] person that is leveraging a third party resource and and managing that accountability.
Michael: Okay. You already answered the question I was going to ask but I just want to articulate this. In a conversation with somebody who has a role very similar to you. Safeco, they do an annual survey of their customers or roughly annual of their agency force. What they discovered, I think it was in the year 2016, that we hit a tipping point. At that point more than 50% of their agency force had somebody on staff, not necessarily devoting full time to it, functioning as a marketer. Of course, that warmed the cockles of my heart and I’d love to hear that. In the 2018 survey, it had gone up, it was like 56% had somebody on their staff who was a marketer. Not of chief marketing officer caliber but they were learning and they were probably the ones who had hands and fingers on the digital tools and they were learning about this new world of digital marketing. What’s your observation about that in general?
Clinton: In general that’s the right direction in trend and be able to go.
Michael: This is this is really interesting because when I got into the industry, this is like 25 years ago, this notion of a marketer was completely foreign. Then when I started teaching marketing it was always the agency-principle almost always the agency-principal who would participate in the training. Then at some point, this started maybe bringing a highly trusted person, a chief CSR or somebody like that who could help. When we launched Agency Revolution as a software company we noticed that those who really thrived had somebody who usually, unless they were really small, they had somebody else who did the day-to-day and the principal tried their best to provide some guidance and advice and at least some direction. I think your observation is that more and more agencies have this position on staff.
Clinton: They do. I think the challenge that folks are trying to figure out now is what are the accountabilities and adaptations to that market. That still hasn’t been nailed down.
Michael: When fast forward in your mind what the industry looks like five or ten years down the road a lot is going to happen in the next five or ten years. There will be those who really rise to the top, what do you think they’re doing and what do they look like?
Clinton: For one it is a completely integrated passage of data through all systems on the back end of an agency. Agencies are data driven-organizations and not the traditional gut-driven organizations that you may have seen in the past. I think that’s the key differentiator there. They can follow that metric from how many website visitors all the way to who filed that claim and what’s my loss ratios associated to a specific marketing channel and how did that lifetime value that customer change from how often they interacted with the carrier versus our agency versus switching from different products versus policy mix. Being able to see all those different scenarios and understand which level is affecting the business.
Michael: I’m going to ask you a leading question because I think I know what your answer is going to be or at least I know what I want it to be. One hand they’ve got the data that shows them what’s working and what’s not, and on the other hand, I’m assuming that they’re creating, designing and managing content that influences the data.
Clinton: Yes, absolutely.
Michael: We’ve covered a lot, this has been a fun conversation for me. Agents obviously– Everybody likes the low hanging fruit, where were are the quick wins so if you were going to throw out a few things that you think would be quick wins for an agency that says, “I get it, I have to do this stuff.” What what are you going to suggest for quick wins?
Clinton: When we run through those four questions, my tracking [unintelligible 00:54:59] just my business. Google reviews is probably the single quickest way that any agency can have. You can see in some market areas almost overnight success of not being on the first page of Google at all and all of a sudden showing up on the map packs. On that point really quick win. Another one is– I know video is what’s going around the industry now and is the really big hot topic but how do I get started with video and how do I use video to actually drive business?
There’s a really neat free tool out there. This will be my disclaimer that we’ve got no affiliation with any of these tools but we just see what works well with agents. There’s a company called Loom and it’s useloom.com. Their Chrome plugin that allows you to do a video called proposal where you’re on camera while showing your screen at the same time and the studies show that there’s a 300% to 400% open rate of videos in the subject title of an email and 70% of people watch a two minute video where only 10% of written content gets read. Huge quick win there for being able to communicate and personalize [inaudible 00:56:06]
Michael: I think it’s free, at least, I think they have a free version because I don’t think I’m paying for it so.
Clinton: Yes, they do. No.
Michael: All right. I’m pretty sure they have a premium version as well but the free version it’s got great features.
Clinton: It’s great to get started. There’s agents out there doing it today. You don’t have to figure this stuff out all on your own, there is resources like myself at State Auto like you know you mentioned Safeco has got a program. Agency Nation holds a really good conference, Elevate 2018 was just the other month and as valuable as the speakers are there what’s more valuable are the agents that are there because they have the same philosophy, same mindset, they’re all trying to figure it out and it’s an open group of agents that are willing to share what’s working and what isn’t.
You can start talking to these agents, you see them posting on LinkedIn and then you start looking at what they do, not just about the content they put out there but how do they put it out there and then start connecting the dots of why are they doing it that way. You look at Matt and Zach of GNN insurance, Chris Purdy of Purdy Insurance.
We mentioned Stewardship and Grant Botma. Seth Zaremba of Zinc Insurances does some really cool stuff with new agency technology platforms. There’s just a lot of agencies out there that are solving these challenges, are figuring it out and they’re willing to talk about it. Leverage the community, I know it can feel like an island running your own agency but folks are opening up and they’re figuring it out together.
Michael: Help us here so people don’t need to feel alone and I know that that can be an agonizing sense for an entrepreneur to feel like you the world is changing around them and they don’t know where to turn and there are lots of resources out so people should feel some confidence about that. Clint, If people want to learn more about what you’re up to, what State Auto was up to or if they want to reach out to you, how do you want them to do that?
Clinton: LinkedIn is probably the platform I’m most active on and feel more than welcome to reach out to me there. It’s just Clinton Houck. H-O-U-C-K. You can find me on LinkedIn or don’t hesitate to me an email. It’s firstname.lastname@example.org. I’m always happy to have a conversation about this stuff, I’m extremely passionate about it, I’ve done it as an agency owner and to me it’s just how we deliver on the promises we make to our clients and when we do that there’s no better feeling.
Michael: Clint, this has been a super fun conversation for me and I’ve got three pages of notes. I’m very grateful for your generosity and as an advocate for the industry grateful for State Auto’s commitment to the Independent Insurance Agents, thanks to you and thanks Upstream as well and hopefully look forward to seeing you at a conference in the near future.
Clinton: Absolutely, Michael. Appreciate you having me on and it’s great to see what you’re doing to help spread the message inside the Independent Agency Channel.
Michael: You bet. Have a great day.
Clinton: All right you too.