Matt Davis on the Connected Insurance Podcast presented by Agency Revolution

Discover how the right technology will make your agency more efficient and how a dedicated marketer can accelerate growth

`Matt Davis is a second-generation owner of the highly successful GDI Insurance—and a longtime friend and client of Agency Revolution. Taking the reins of a well-established agency and bringing it to new heights is no easy task. Matt reveals how he accelerated growth and boosted efficiency in this wide-ranging discussion that covers everything from hiring a dedicated marketer to integrating the right technology, and how to handle succession planning.

Listen to this deeply insightful discussion to discover: 

  • Matt’s secret to simultaneously boosting the flow of inbound leads while slashing the cost of new customer acquisition
  • How GDI Insurance combines an unconventional employee structure with thoughtful automated communication to engage prospects on a deep level
  • Steps multi-generational agencies need to take when working towards a succession plan

This forward-thinking agency owner reveals practical steps any agency can take to bring their agency into the modern insurance age and accelerate growth in this can’t-miss discussion. 

What are other agents & brokers doing to thrive? What are the biggest trends affecting the retail insurance agent & broker? What are the most important strategies and tactics you need to grow faster? Find out here in the Connected Insurance Podcast, where our hosts discuss the biggest issues affecting the independent insurance agent & broker with the industry’s leading figures.


Joel Zwicker: Matt Davis, thank you for joining me today. I appreciate you making some time.

Matt Davis: No problem, thanks for having me.

Joel: Matt, there’s a few questions that I want to ask you and I’ll tell you I’m very familiar with your agency. I’ve known about you guys, known of you guys, worked with you guys for some time. The more I know that I realize that you guys are actively doing some stuff that we’ve talked about at length here between the podcast and our webinar series and those three things are quite simply automation, using technology within your agency. I know you guys are at the forefront of that.

You’ve hired a marketing person which I think a lot people want to do but just don’t know what to do and you’re a generational agencies. Those are three pretty big topics that I love to discuss with you, so let’s get to it if you’re cool with that.

Matt: Yes, absolutely. Let’s get started.

Joel: I know you got your agency, you’re at the forefront of technology, you’re not scared of technology. Let me ask you, how are you using technology within your agency? Away from obviously, you use a management system but maybe aside from the typical things an agency would use.

Matt: We do a couple of different things. The last year or two we’ve been focusing on trying to leverage our staff time. I know it’s not necessarily technology-based or the focus of whatever’s hot and sexy in insurance marketing or whatnot at the moment. What we’ve noticed is that it’s harder and harder to find talent and when we do have talent, we don’t want to burn them out with the mundane stuff that draws the wind out of their sail.

What we’ve done is we’ve looked at our marketing systems in every tech platform that we have. How can we leverage our people? How can we leverage our processes? Some of the stuff is the most basic of things that you’d think, “Oh my gosh, why are we not already doing it,” from allowing electronic calendaring for our clients and prospects automatically book time on a calendar. Through our marketing system, we have emails automatically go out from our account manager’s emails, for example, asking for renewal updates.

All the stuff that you would really think as being more clerical assistant work and not actual professional practitioner operations, we’ve now started to leverage our marketing systems for. Now, not every customer of course participates or engages in those but we’ve noticed about 1 out of every 9 to 10 people that we’ve reach out to on routine service items like that respond to those.

With the timing of what we do, that means in our account manager– with the way we do that earlier on, will have received updates for a renewal submission or updates for a vehicle list or a driver schedule. About a week before, they would actually be actively going out and reaching out for it which means that that’s one less phone call they have to follow up or one last e-mail they have to make.

Skip ahead really quick, we looked at hiring an internal marketer. We looked at the cost savings across all aspects of our system and just by saving that amount of time, I could say we paid for about a third of our marketer just for some of the service items alone that we initially implemented.

Joel: Oh, absolutely. I loved that you put something out there which I think a lot of people have a fear of, is if I’m going to start e-mail marketing and that’s the pretty narrowed focus e-mail because there’s more to that, but e-mail can be really efficient and is by far the most cost-effective way to communicate with people. I often hear, “Well, I only have half my emails,” or “I think people get too much emails.”

From what you’ve just said, it’s really maybe 10% of your broker business actually communicates with you, but you drill that down to the efficiency it builds, that’s outstanding. I Feel free to share with this us in more in-depth. I would guess that that 10% of time could be for your staff, could be spent better building much better relationships with your clients and prospects.

Matt: Exactly. We operate somewhat differently from a– If you look at our book of business spread, if you look at commercial-based business being commercial, workers comp as well as employing group benefits, it’s 80%, 82% of our operation now. The remainder is traditional personal alliance. If you look at the commercial side, we are very, very producer light which means that we want our account managers to have the primary relationship role with our customers.

Kind of goes against the law of traditional thought process and traditional theory out there on how you run a commercial book, but what happens is when our account manager sends that e-mail out to somebody or we’re doing it electronically for them in their verbiage to a customer, the customer is more apt to respond. Now, the concern over too many emails, of course, that’s a concern. It’s very, very infrequent, but if we have somebody in commercial alliance that doesn’t have cyber or], doesn’t have a commercial access or umbrella, or doesn’t have employing practice liability.

We piggy-back that on to the renewal review for the workers compensation or for the general liability. We don’t just sit there blasting them day in and day out. With that, I think right when we would go with the last enhancement set of stuff we were doing, I think we got three request just to bind Cyber coverage within seven to nine days. We did it and it was just intriguing. A long-time customer who I personally was a producer on for years and years never would respond to me about Cyber or employment practice liability and instantly wants Cyber for all of their entities.

We’re talking $28,000, $30,000 in Cyber premium. He just said bind it. That’s not really empirical. You can’t say, well, that’s X% of our book of business” or X% of our return on investment but when you count, it took our internal marketer who’s now fixed cost for us not even an hour and a half to set up that program and then we got that herhour and a half bringing us that are par $3,000 in revenue annually was a pretty darn good use of resources.

Joel: Absolutely. What I found interesting in that is you told us that your book of business is generally commercial now and often in my day to day I talk to a lot of people that 50/50 split or maybe even heavy on the personal line side, when I get to someone that is a commercial lines focused agency, their general belief in technology seems to go down because of their fear of the loss of the relationship where it feels like you’ve obviously had a very opposite experience.

You said that it was obviously to leverage staff to become more efficient. Was there any other things there that would say, “Hey, it makes sense to use technology even on those small to mid-size even large commercial”?

Matt: Yes. We have client, he was a very long-standing Ag-based account. I think 90 somewhat years in business. The business was before they finally dissolved. It would have been five, six years ago. He pulled me aside when I was late to an appointment as a producer and being a principal and a producer at the same time wearing those two hats, you get stuck doing some admin stuff you have to do that really just isn’t very fun, and then you’re late meeting with a client, and that’s exactly what happened here.

I meet with this gentleman, he and I have lunch about every six months still. He’s about 82 now so he’d been mid-late 70s back then. He made it very clear to me, he’s like, “Matt, you work for me.” He’s like, “I don’t care how much you make or how little you make, you work for me and I prefer that you allow me to do business when, where and how I want to do it.” At the time, I would have been 29 or 30 when this happened. Thinking I knew what I was doing in business, had a little more ego than I have now.

I took that and it was like I got slapped down, slapped in the face. Then I thought about it over the next week or two and he was right. If the customer wants to call in or follow to be via text or e-mail, they have the right to have that. If we’re not going to allow that then we’re doing business in 1999 or 2001, we’re not doing business in 2019, 2020. The customer dictates everything and it’s the Amazon effect through the entire economy.

You can get mad at Amazon, I was just listening to a podcast on entrepreneurship and the head of that podcast or the person doing it basically said that whether you like what Jeff Bezos is doing for Amazon or whether you don’t like it or whatever you think of him personally or professionally, in the end, you’re still doing business with Amazon or you’re doing business with Zappos or whoever you’re doing business with because of the way they service it.  

If you think about it, 99% of people don’t actually deal with Zappos from a customer service standpoint or even Amazon, but they know that they can. That’s the philosophy we’ve taken is that our account managers are expected to be able to text message or phone, e-mail, God, even fax people are still doing, that we’re still taking, I can’t believe it, but we’re still using faxes. However the customer wants us there, they get it and that’s how we deliver service.

When you look at the technological aspect of it, how are you going to be able to do anything with a customer however they want to do it if you can’t accept automated messages, if you can’t do these things because we reach out to a customer first via e-mail because the easiest thing to do automated wise. Then with that fails, then we go manually and do a phone call. A commercial agency that’s really just doing the old school way of doing business, I would be interested to see what the age of the management or ownership of their clientele is. It’s probably older as well.

They’re going to have a real rude awakening or could possibly have one. I don’t want to sound doom and gloom but there could be a rude awakening when the next generation takes over those client businesses. They expect as close to an Amazon experience or a Zappos experience, and they’re not allowed to provide it.

Joel: I think you’ve just hit right on one thing that if I’ve said it once I’ve said 1,000 times be it to whether it’s on a podcast, webinar or on the phone with somebody that you have to be able to answer the question what does it mean to be a client of your agency today? Great customer service isn’t the answer. I think what you just told us there is that your clients can expect that you’re going to be able to communicate with them in whatever fashion they want. That puts your agency ahead of all the others that may be in your immediate area.

Matt: Exactly. I think really, the definition of customer service you can still use it as the benchmark, “Oh, we have great customer service.” It doesn’t mean that overall CPCUs or CICs in our agencies and we’re the best and the highest caliber professional and will do work in a normal speed. It really comes down to where, and how fast you’re responding to the customer. Customer doesn’t care to necessarily have something resolved immediately when they reach out to you.

They care to know that you heard them, you understand their concern, and you’re working on it, and they’re getting timely updates. That’s where a lot of the automation comes in. We’re working on some enhancements now with our system, our system’s trying to get it to where as things happen and progress through our management system, we can then market back out to the customer, not necessarily marketing reaching out for anything except to give them an update on where we are so that way the customer knows what’s happening.

You know, if you send something back to Amazon, you know the status of that return, you know the status of the refund, you know that if you got delivered the wrong product or the product never came what’s happening? Well, same thing to a customer, “Hey, we added a vehicle,I never got the auto-ID card.” “Hey, we’ve sold this piece of equipment, I never saw the endorsement come through, I never saw the change on my next monthly statement.”

If we can give them insight into it and lift the veil a little bit, they can see what’s happening and they’re in the driver’s seat. I keep saying this is the difference, that’s the difference but the customer wants to drive the relationship. They don’t want to be pushed into whatever they need.

Joel: I love it. I think we’ve become to a point that we feel like we can only communicate with a client when something’s wrong or on specific events. I love the idea of just sometimes it’s okay to just say, “Hey, this is just an update to let you know that we’re on it. There’s nothing wrong. There’s nothing missing but we’re working on it.” Sometimes that’s all someone needs to know to put them at ease to know that someone’s there, not this oftentimes you go silent for weeks, two weeks, three weeks and we’re expecting something.

Matt: One thing too is that if a customer does have a problem, you want to hear about it. We actually have in our management system, we have a problem activity or diary code. What that means is that there’s tasks that are associated with it. Essentially, you put in the problem, you put in the explanation and then it goes right to upper management. It actually comes to me myself.

We’re looking at expanding that into our marketing system to where if a customer has a problem, and it’s either a negative, it’s either a problem with us where we may have failed, or it’s a problem where the carrier failed to deliver what was expected, which we don’t want to blame the carrier but sometimes a carrier representative is overworked and they don’t necessarily get the same level of service that we would have liked to have given or the same fit and feel, or the customer has a personal challenge or personal problem.

We’re looking at putting a forum on an unpublished site on our page so that way it can go through our marketing engine, and depending on what classification is automatically send a gift card to the customer. Also ask them to schedule time if it’s where, GDI especially, if one of our people failed or we failed as an organization, they can schedule time instantly right on my calendar to speak with me as the owner, get answers everything else and they could put in, “Here’s what my problem was. Here’s what I’m–” pardon my language, “Here’s what I’m pissed off about as a customer of Matt’s organization, and I want some answers.”

Then an e-mail comes to me that says, “Hey, we’ve had a problem.” The minute the customer sends that I get the description of what my staff put in, as well as what the customer’s was and then the calendar items on my calendar for them to talk to me. A lot of principles will say, “Oh, I don’t want to do that because I don’t have that much time.” Do you know how many of those appointments I’ve taken in six months? Like three. It’s not that many, because in the end your people, if you have a good staff, and everyone always– you always have staffing and employment problems.

I think there was a quote from Bill Gates 20 years ago or more, where somebody said that they hired all great people and he said no matter how well they try to hire, you still never hire 100% great all the time. You usually have about 35 to 40% great classification of employee. Kind of going with that just saying that even if you think your staff are not doing well and you’re scared of how many responses you’re going to get, you’re not going to get anything that bad.

You’re going to hear of it and then customers actually then appreciate the fact you fix it, you could turn a bad thing where somebody can go tell everybody they know, their moms, aunts, uncles, boyfriends, everything, how bad we were or I could spin it and possibly get it to where they’re going to refer us another piece of business and use that as a training example for our staff.

Joel: I think it boils down to you could bury your head in the sand and believe that you’re the perfect agency. I’m not trying to turn this into a negativity thing but the reality is there’s people out there that have issues and if you want to pretend they don’t exist, then then you go do that but it’s amazing. Bad news tends to travel a lot quicker than good news. I know I talk to agencies all day everybody so quick, and they want that. They want to know an NPS score. How many people love us. That’s great, you want that, that can be very positive internally.

As an operational standpoint, I think I want to hear from the people that aren’t necessarily happy or having issues because you don’t know what you don’t know but then you have the ability to go in and fix and if someone’s just going to their neighbor or wherever and complaining and not speaking to you directly or management directly you have no way of fixing that. Three meetings in six months, Matt, isn’t a whole lot, but I can well imagine you may have found some internal issues that you weren’t even aware of.

Matt: Yes. We acquired an agency end of Q1 last year, so it was at the end of March 2018. We grew by about 35% overnight that day and it sounds great, but having failed to do great due diligence on that we found some lacking areas in customer service there. I ended up taking a lot of those appointments and a lot of those calls last year, but what we did is we ended up– There’s some attritional situations, but we were able to, I don’t want to say spin in a bad way but we were able to say, “Okay, we understand the concern, here’s what we believe a customer should be able to experience from us and we’d love the opportunity to try to re-win your business and treat you as if you’re a brand new customer again.”

Go back through the honeymoon stage. A customer when they feel that they have you listening is– think about it, if you have issues with your kids, if your kids are frustrated with something, your spouse is frustrated with something, your friends, your neighbors, most of the time, it’s just they don’t feel like they’ve been listened to and they don’t want to be talked at. They want to be heard and they want to feel that there’s genuine concern about their feeling.

Joel: 100% I always use a term that and sometimes we don’t like it, I always say someone’s perception is their reality. It really doesn’t matter what you or I think, that person’s perception is their reality and we better be open to listening to it.

Matt: Absolutely. One last thing, I was just thinking before we actually went effective with that and one step that might be actionable is agency principal can get a beat on the pulse of what’s going on. Ask your most demanding clients. We have one client here when we switched our calendar, I’m sorry, our office times, it used to be eight to five like everyone else, closed for lunch, all that stuff. We’re not, we have a shorter day. We’re 8:30 to 4:30, we don’t close at lunch. We just shift schedules.

That way our staff can be at kids sporting events, kid extracurriculars, they can just get ahead of the traffic heading home. We were worried being that we’re heavy in construction, we have heavy certificate requirements on a lot of our clients, other form of requirements is this going to be a hindrance to their business. Well, we pulled like three or four of our most demanding clients, both in terms– Then, three or four of our most demanding clients just in terms of forms.

Those were just demanding of our service and then those that were remaining were forms. Not one of them had a problem as long as it wasn’t going to overwork the person who’s on their account because they actually care about the account manager. Then they didn’t want to have anything negatively impact us. They’re whole responsible as well. If we’re sending in a certificate request for the end of the week, and it’s a Wednesday, “Are we going to get our certificate?”

I’m like, “Yes, you’re probably still going to get it Wednesday. It’s just we’re not going to be available from 4:30 to 5:00.” “We don’t have any problem with that, Matt. That’s actually pretty awesome.” Wish we could do that here, but we’re on a different industry. That’s kind of the response we get, but you can dabble and dip your toe in the water without going gangbusters.

Joel: Matt, I’m going to use this as a segue to question two, but it sounds like what you just said there was you’re not scared to poke the bear. You’re not scared to ask difficult questions to potentially, I don’t know if difficult customers, but high demand customers to see their response. With that said–

Matt: We’re content with that too, though. You have to look at the agency. Do you service your customers or do you lay in wait and just wait for that commission to pay and pray to God that you’re not going to lose the account? I don’t want to sound too aggressive or anything like that, but the best defense in every scenario is a good offense. If you’re out there trying to find out the problems, yes, you might bring a couple up to light, you might lose an account. Knock on wood, we haven’t lost one yet from it.

We did have to deal with a customer getting irritated again here or there couple of times just because we’re revisiting an open wound or reopening a wound, but then we’re able to show that, “Hey, look, we know that you may have forgotten about it, but we actually do care. We don’t want to have it happen again.”

Joel: With that said, obviously, you care and you’re going to take proactive measures in the customer experience within the agency. I know, as I mentioned, question two was, you’ve hired a marketing person within the agency. I’m sure that person is engaged or very much involved in these processes. Can you maybe start off with telling us what was the initial purpose for hiring the marketing person within the agency?

Matt: I think I can speak for a lot of agencies our size, maybe a little smaller, a little larger, but the principal ends up thinking they can dabble and do it. I was like, “Oh, it’s not worth spending the money. It’s not worth spending the money.” Because you look at the cost of that. In every territory, salaries can differ a little bit although the world flattening pretty quick, so being in Central and Northern California, I’m in an area that if California split states, we’d be the most impoverished state in the nation.

It’s where most of operation is, however, we have to compete for Silicon Valley salaries because if we don’t pay it, somebody’s going to sign up and work remotely for one of those agencies and get the wage. We’re not afraid to pay for it for certain things, but then I was definitely afraid to pay for a long time for somebody that has this other caliber that can produce the quality work to do it, but then we never got anywhere.

It was like we’d start, start, and stop. Start, start, stop. That kind of inconsistency, having your message that inconsistent in the marketplace, I think hurts our brand. It didn’t help that customers who make fun of me were the couple that did follow us. It’s embarrassing. They’re sitting there and I’m talking to the controller of a client, and then the owner walks in, and the controller goes, “Yes, did you see that, Matt? It was all on Facebook for a month, and then we haven’t seen anything for two months.” Kind of sucks.

Joel: Absolutely. We have the consistency factor. You’ll hear a lot of people and I had this discussion actually with Ryan Deeds on a podcast, maybe two or three months ago now. What you see is a lot of agencies do that. They’ll do it for, using your example, 30 days, and then A, you forget or B, you didn’t see that. You expect to see this win, you see this big win.

I’m going to do the social media thing and I’m going to get a big win and then it just doesn’t happen, but to your point, it hurts your brand. Talk maybe a little bit more about now you’ve hired that person and the consistency factor, what can an agency expect as far as from that person or have you seen any major inbound response from that consistency?

Matt: We have seen inbound response. I’ll admit right up front, we are subpar on tracking the numbers. That’s because you have different systems, we have people walking in, you have people calling in. Those issues, and we’re just not very consistent in structure in how we’re reporting. It’s getting better, but we’re not perfect at that, but if I had to look at the numbers, we saw about a 15% increase in good months, give or take a point in the inbound volume of who wants to do business with us.

That’s not including cross-sell and upsell opportunities. I think when our marketing person went through, because I had created some campaigns, but they were created, pardon my language, but half-assed. I did it really quick. I use templated verbiage that I got from our Zywave subscription or this or that and just threw it out there. The beauty of what we have now is we’re consistent, and our marketing person does not solely have an insurance background, which I enjoy, because when she puts verbiage together, it’s not that it’s in layman’s terms, it’s in everyday language.

She’s not using jargon of bops or Med-Pay or something. She’s actually explaining it out as if she’s explaining it to anybody who doesn’t live, breathe insurance. With that, everything we do is not a one and done e-mail. It’s a continual dialogue. Every bit of our conversation, our goal is that if we’re sending out and somebody’s filled out a form on our website and is interested in homeowners insurance, they’re going to get the same dialogue, they’re just going to start at a different point along the continuum in that conversation about their homeowners insurance.

They’re going to start way at the beginning or if somebody that is already in our homeowner or he has homeowner umbrella with us and a life policy, they’re not going to get all these cross-sell emails. They’re not going to get the benefits of it. They’ll get, “Hey, here’s some other things that we can enhance at your next– or your renewal is coming up, we can enhance it.” It’s one continuum of dialogue, so when we do get that lead or that person that now is ready to consider doing business with us, our staff is already set up to be much more successful.

I think our most recent statistic is 18%. We have, if it’s a call, if it’s an internet lead off our website, if it’s a call-in, a walk-in, a lot of those leads that we’re not going out hunting for, they just come up and drop at your door, our staff, if they just get the information to quote, we’re binding at least one line of business for 18% of those people. They’re the lowest acquisition cost customers.

We’re not paying a producer to go out, we’re not paying a telemarketing company. We’re not paying for leads and all this stuff that you normally have to pay for. It all boils into that marketer’s cost and the marketing systems. If you look at it between that, the cost savings of service we discussed earlier, our acquisition cost is really minimal.

Joel: I just wanted to find here, because I think usually when I talk to someone, a marketer, and I know the answer to this, Matt, so just forgive me for playing dumb here a little bit. What you’re saying is that your marketing person doesn’t just do social media for you?

Matt: No. She spends some time doing that, and don’t get me wrong, she spends a lot of time reviewing the analytics because everyday the wind can blow a different way and algorithms shift, your organic reach shifts, this and that. Right now we have some bigger capital style projects that she’s working on, but no, absolutely not. It’s not all social media. She spends a lot of time on that, but it’s not the main focus. The main focus is how can we enrich the agency. How can we enrich the relationships within it. Social media is one.

People that are engaged in our social media because they think some of our contests are cool or some of the posts we put out there are cute or some of them are useful. Yes, those are nice to have, but I’ve seen at some seminars and some agency owner groups that, “Oh, I’m selling a whole bunch of–” They’ll claim they’re selling a whole bunch of business through Facebook or Snapchat.

In the end, they may be able to do it, we don’t. We don’t sell anything through– We may get leads through Facebook or through other avenues of social media, but what we do is we still operate where the customer wants. We’re not tooled for just social media. Social media is part of what helps fill our funnel and keep the funnel filled. When people in our family of customers, it keeps them involved in the family.

Joel: I asked that question, and the naiveness of it because I think that’s the first thing people think of, “Why do I need to hire someone just do social media, Facebook, LinkedIn posts? We don’t get any business off there.” I think properly, you won’t or you shouldn’t. It’s a relationship place. You need to be there, so when people are researching and say, “Oh, they do exist,” but what you’re saying is that, for me, what I heard, and just to summarize is number one, yes, they do some social media.

Number two, they’re helping you with the customer experience, defining that within your agency, but then the third part, which I think is really key is helping you with your content

because I think when we work in this industry, we’ll write an article or an e-mail or a text message or a billboard ad or whatever the case is, that makes a whole lot of sense to us as agency principals or presidents, but makes no sense to the average everyday consumer. Having that person that can do that, to me, is got to be invaluable.

Matt: Absolutely. If you were in a room with agency principals, you just ask, “Hey, by a show of hands, who is really intrigued with talking to their accountant about depreciation schedules or this or that?” You’re not going to see a hand. You will hear crickets. You can’t see a hand raised at all. That’s how most of our customers, commercial, personal or otherwise, think about insurance.

They just know that, Oh crap, I don’t understand it, number one. I want to rely on someone or a company to help me understand it and just know that I don’t have to worry about it. Social media is a way of showing that hey, we’re human. Every once in a while, we’ll throw something out there but 99% of what we’re sending out there is not really insurance-related. It’s more, “Hey, we’re here.”

Try to give the sense of reliability, the sense of steadfast everlasting. We’re going to be around, rock-solid foundation that they can rely on. Then it’s from there. It’s almost like the idea of the jab, jab, jab, punch or whatever. It’s just a whole bunch of jabs. You never really actually go for the punch or the right hook in social media because in insurance that’s a quick way to get unfollowed.

Joel: Yes, absolutely and I’ve been a big proponent of– You can find canned content everywhere and that’s what it is. I’ve always said, if you think canned content is a way to communicate with your prospects or customers, I think you’re sadly mistaken, and I love seeing the agency that’s made an investment in someone be it the marketing person or whoever have you that can create that content because that’s where the relationships built. Who knows your agency and what you guys do better than you are people that work within your agency. 

Matt: Exactly, and then it becomes, I mean, you become much more efficient with an internal marketer too. A lot of times, I mean, the way we operate is probably not the most optimal and it’s just because I’m working to free up more of my time in order to work on the business, not in the business. I mean, we all talk about it, but nobody actually does it, but we have a routine meeting or meetings that we have regularly to go over, “Okay, what’s going on? What is not getting to the marketing person from the organization that should be getting to them? What do they need in order to get the next steps moving? Also, what are they doing?”

They can draft content, I’ll tell you 99.9% of the time there’s no factual or coverage incorrect or anything incorrect in the verbiage, but sometimes I might say, “Can we tweak this sentence for that?” We just go over that because based on I’ve been in sales for a number of years, my staff’s been in sales if they’re reviewing it, and they may say, if we say it this way it’ll actually lead into the next question or it’ll get us away from going into this big fiasco of a problem that might come up in the dialogue early on.

We’re doing minor tweaks, but we have somebody who’s actually an expert in what they do, doing it professionally and then we’re able to– almost as if we’re outsourcing it, it’s just we have to the point where we can no longer afford to outsource it. We had too much need for it. It was a problem and it ended up becoming a beautiful problem to have.

Joel: Nice, awesome. Let me ask you this question, only because I talk to a lot of agencies and they don’t know nowhere to go. Once again, this is a question that I semi know the answer to, but I think it’s important for people to know. How much time does this marketing person spend in your office? Like, how much time do they need to spend there to get the pulse of the agency, if you will.

Matt: How much did our person spend?

Joel: Yes, how much time did your marketing person spend in your office?

Matt: She was here, first week– She actually works from another state. She came in and got a beat on the pulse of what we do, met the majority of our staff who we had at the time. I mean, you do have staff transitions all the time. Then she has regular communication with myself, with our operations manager as well as a couple of our other team that make sure they monitor in there. They’re checking data for her. We try to go as efficient.

You be as efficient of the utilization of each of our member’s time that way we get the maximum benefit. We do need to get her more involved in the agency and that was something she and I had spoken about because they don’t have to be in every decision making discussion. It is nice to get their input on things though because our philosophy when we were looking for somebody is somebody that does not have solely insurance experience. That way we can get the non-insurance input or at least have a chance of getting it before we even have to move along with or go too far down the road with a conversation.

Joel: Got it. Listen, I know you’re a marketer and I knew the answer to that, but I think a lot of agencies get themselves cornered. It’s like, I need to find someone in this town or within this little small geographic area to fill this job and that’s not necessarily the case.

Matt: Absolutely not. I’m in a town of about 70,000 people. In some parts of the country that might be big, in our area it’s pretty small. We’re only 90 minutes outside of Silicon Valley, you’d think, oh man, we’d have an abundance of people that are qualified. We don’t, that’s the sad part. We really don’t. When it comes to insurance, we’re actually in one of the most, I don’t want to downplay where we are, but there’s been a bad philosophy amongst insurance professionals for a long time.

That, “Oh, I get my license. I’ve got a job for life. I don’t have to continually improve myself.” When it comes to marketing, especially when you’re looking at the digital side of it, you better keep on top of what’s going on. You better know what vendors are out there, what the changes are going to be for Google’s algorithm coming up or what are the shifts going to be in Facebook coming up? I just hear little bits of it.

I have an oh crap moment and just send an e-mail, “Hey, on the next call’s agenda, let’s go over this because I just didn’t sleep for an hour last night,” or whatnot but having somebody who wants to be knowledgeable, who’s passionate about it, I mean, I don’t know. I think my County has close to 600,000 people in it. There’s maybe one person you might find that would be qualified. Yes, absolutely go out of the area.

Joel: Yes, love it, love it. We’ve talked about technology and automation in the agency. We’ve talked about bringing a marketing person in, and for my two cents I think that’s proactive thinking but the third topic that I wanted to talk to you about because man, this was something that’s been talked about and talked about on here and on our webinar series. I’ll tell you when I talk to our team here, our business development manager team, here at Agency Revolution, one of the most common things we come up against and stumbling blocks for agencies making a decision, whether that’s for our solutions or any solution is this idea of the generational agency.

I personally see a stumbling block or I run across a stumbling block in that all time and I know you all are a very successful generational agency from my eyes anyway, but I’d love for you to share a little bit about that process and I know you actually mentioned you wrote a paper and we’re going to share that out. Maybe just give us a bit overview of where you guys maybe started with that whole process and some advice you give to people that are sitting in that same situation where it’s an agency is, shall we call it trying to move from one generation to the next?

Matt: Sure, I mean our history. I’m technically a second-generation principal. I like to think of it as more of a generation 1.5, maybe even 1.25. We’re not quite– I didn’t come in here out of college and have an established agency where I can jump in on a few accounts that have been here forever, get a guaranteed paycheck and move forward like some generation 2 agents do. I started in the agency early 2000s, right out of high school, went to college, worked full time during college here, left, got a master’s,worked in a couple of different areas and then came back in 2010.

Well, I came back to and realized that if I didn’t make sure I maintained my book of business and sold new business, my paycheck wasn’t guaranteed either. Understanding that kind of gives a little different philosophy and appreciation for the dollar, but when it comes to the generational shift I was blessed in one thing. My father and mother who owned the business, my mother’s not active in it. My father was the sole principal for a long time.

He had a longstanding relationship with agency revolution and insurance profit systems before that, but he’s quick to invest in the business, but when it came time for me to start buying into the business and we start that transition, we found even with my father having more of kind of the younger generation philosophy that you have competing interests and if you don’t address them and you’ve got to talk about it, you’ve got to talk about the 800-pound gorilla in the room.

Otherwise, you’re going to have just frustration. That’s an older, more seasoned principal is looking at more of the cash cow philosophy of their agency. They’re taking profits off the top. They’re worried about profitability, they’re trying to maximize that profit revenue before they retire. They think that that’s where the value of the business is. Well, we all hear these huge multipliers now. If you understand how those multipliers are calculated, you don’t necessarily have to show astronomical amount of pretax income.

You have to adjust to that but if you’re investing in something or whatnot, those are things that could be explained. Now myself as the younger agency owner, I’m coming in and I’m like, “Well, man, I’ve got to build this asset. I’ve got to buy this thing out. How am I going to do this?” Where I was fortunate is that if there was an idea that either myself or my father saw that could be beneficial, the other one of us is usually willing to spend the money.

I have a lot of friends that’s not the case though. They’re slated to buy in, or they’ve already bought partially into a business, they don’t have enough control of it to say, “No, we need to shift directions, we need to pivot now or we’re going to be behind the eight ball 8-10 years from now or 5 years from now.”

Joel: Hey, Matt, just let me ask you a question here quickly. I promised I wouldn’t interrupt you, but I just did.

Matt: [chuckles]

Joel: How much of what you just said do you think is impacted– Like, I know your dad and been friends with him for some time, but how much of that, the positive is because you had that open and honest conversation from day one. How much does that going forward, you say you have some friends that deal with that stumbling block. If they found themselves in a much more open conversation from day one, could it stop some of the problems they’re having?  

Matt: It could as long as both parties are– You’re not going to be open and honest upfront, both parties– Let me tell you right now, I love my parents to death, but in business, there’s frustrations we don’t deal with personally on a usual basis, but if you’re open and honest about it and the other party’s open and honest about it. `If you’re the younger generation speaking to the older and you’re, “Hey, look, I’m getting a little frustrated because I would like to see growth here, I want to invest in this, for the benefit of all concerned.”

The older generation may or may not accept that upfront. They may not ever accept it, but if you don’t address it, you’re already just agreeing to fail, and you have to do that. I have friends that it’s like, “Oh yes, two of the three siblings are going to be owning the business.” Well, if you don’t memorialize that on paper, it’s not going to happen. Then guess what happens? The principal or the patriarch of the family passes away.

That’s my done now, all of a sudden they got a buyout a sibling that shouldn’t have had to be bought out, or they didn’t invest in the systems they wanted and it was always, “We’ll look at it in six months, we’ll look at it in three months.” Six years later, you’re still kicking the can down the road and getting nowhere. You have to get to that. It’s really hard with family to have that conversation.

It’s much easier to have it with a business partner who’s not family because you’re not going to see them at Thanksgiving, you’re not going to see them at the family barbecue, you’re not going to see them at Christmas. You’re not going to be frustrated with the grandparents of your kids, right? That could be one of those struggles to where people don’t want to address it, but you have to.

Joel: Got it. At one point, we get this on paper and I guess just for the on the struggles that I see is you hit the nail on the head with this idea that and I mentioned this in a previous podcast I did with Michael, that we often run into this situation where the next generation, whether it’s 1.5 or generation 2, whatever we’re going to call it, has control of the day to day but has really little to no control on the overall operation to make a decision on, well, most anything. Obviously aside from the discussion we just had, any additional advice you could maybe help people out of that situation.

Matt: That’s a good step in the transition. What we’ve seen and there’s some fairly large agencies and brokerages in our geographic territory that we compete against and they were very late to start perpetuation planning internally. What happened is the senior person there starts having health problems or is starting to check out but nobody’s trained and/or they don’t have the authority to actually step in and do more of the management.

Managing the day to day transactions, the business is one thing, insurance transactions anyway, but then you got to get into the planning phase. The senior side of it needs to or the senior owners need to then step back a little bit or give some latitude, give the younger generation some rope to operate. Give some guidelines say, “No, you can renegotiate this contract with our management system vendor, or you can look at these, let’s look at the proposals for a new marketing system.”

Share the concerns and the strategies upfront. I know I had a frustrating point because my father he didn’t intend to but just out of habit would make an on the fly decision, which would then have undermined a decision I had made just hours earlier or a day before that I’d been working on for a long time. I had to go in and be like, “Hey, dude, what the hell man, you just stepped on my toes.”

It was a very uncomfortable thing, it took me an hour or two just to get the fortitude to go in there and say it, and then he felt bad too. It’s like, you don’t want to make people feel bad, especially if it’s a family business, but us both feeling a little bad for a few minutes, sure as hell fixed feeling really bad for a really long time. I know we’re talking about business, but if it’s a family matter, it’s very hard to separate the two.

You can’t just say, okay, you’re operating the operations and have no plan going forward, you need to start stepping into all of it. The older generation needs to start looking at being more of the board of directors, giving guidance and then having the next generation actually act as the operating executives. If they don’t do that you’re just basically giving them the title and name only.

The younger generation is going to get frustrated feeling like a puppet, and then they also potentially lose staff trust, because if the younger generation is supposed to be managing and starting to lead the organization, and it gets under minded or gets stopped short of multiple decisions, the staff will start to believe that they don’t have any actual authority, then they start feeling uncomfortable with the direction of the business and may not feel secure in their future job, either.

Joel: Yes, I love it. I guess it boils down to just having, don’t let things linger, have open and honest conversations. I guess for that generation, that’s leaving the business or whether you started the business or maybe you were once upon a time coming on board. Is if this is your decision, if this is what’s going to come of your agency, of your business, then that’s the way it should be. Don’t undermine the people that you care about. Obviously, they have a future or they see a future in the business and they want that business to live on. You got to let them at a certain point take the reins, but it’s important on both sides to talk about everything. Don’t let it linger.

Matt: Absolutely. One other point too where my father I think had a little bit of where he felt, “Oh man, what’s going on? I’m losing control.” Was we talked about it. Through hiring new staff is where he started I think seeing it too, is where he used to have the final decision on every staff member that’s hired. Well, when I came in, I realized I’m not good at hiring staff and I really don’t like firing. To be honest, I like seeing the good in everything.

When Matt Davis is in the interview room, doesn’t matter how good or bad that candidate is, all he sees is sunshine and rainbows. What I did is I didn’t necessarily delegate but we promoted from within somebody who’s very strong at getting through the muck and mud and seeing what somebody’s character is. Who’s good at holding people accountable and hiring. Well, she starts hiring so we have an opening that we need to fill, that person’s hired but when my father comes in following week and it’s like, “Who the heck is sitting outside my office?” He doesn’t know.

He’s then meeting them for the first time and they’re already on payroll, but those things you don’t think about. You’re like “Oh, that’s just part of the progression of transitioning the management?” Well, those things, a lot of agency principles, especially first-generation principles. They made every decision because they had no other option. Then as they’re starting to let go, it’s harder for them to let go than a second-generation to let go to a third.

A lot of what I’ve said previously has been hey, the older generation needs to give up some control. Younger generation, on the flip side of that coin, needs to be respectful of it and understand, “Hey, look, they’re the founder of this, if it wasn’t for them, we’d be out there pounding the pavement. We did get a benefit whether you’re generation 1.2 or 2.0. You started with a head start from somebody who started from scratch and do be respectful of that and understand that, look, there’s still benefit to have the founder around or the prior generation around because there’s some experience, either as an insurance practitioner by itself, managing employee issues.

It’s hard to put a value on experience and you don’t want to burn that. Even with family, you get people disgruntled and family sometimes may not voice a comment or concern that you really need to hear if you’ve disgruntled.

Joel: Yes. Matt, listen, I appreciate what you’ve just shared with our listeners. I know there’s going to be questions. If somebody wants to reach back out to you. How do they find you?

Matt: They can just reach out via e-mail, [email protected].

Joel: Awesome. Thanks, Matt once again for your time, I do appreciate it.

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