--:-- Ryan Hanley: In a crude laboratory in the basement of his home, welcome back to the show. Today we have Chad Spaide on the show. This is a show you're going to love, especially if you are nerdy about the insurance industry. I feel like I say that every episode. I feel like this is just the nerd show. We just dive deep on all kinds of crazy shit that maybe most of you don't even care about. I don't know. I love having these conversations.
--:-- Ryan Hanley: I brought Chad on the show to talk about data. We ended up talking about all kinds of different things around agency operations, sales, setup, and the future of the industry. We talked about data and the role it plays. Ultimately, we broke down this debate of who owns the data—not in the sense of who actually cares who owns it, but in how do we take the data that we do own, or at least have access to, and put it into play? How do we actually deploy it to grow our agency? I think you're going to love it. This was a tremendous conversation.
--:-- Ryan Hanley: If you don't know Chad, he is the president and CEO of Benesource Insurance Services in California, and he founded the Pure Potential Insurance Automation Facebook group, which is baller. I highly recommend going on Facebook and joining that group. It's free to join. It's a private group, so you've got to request access, but as long as you're an agent or involved in the industry, Chad will let you in. It's well worth the time. There's so much good stuff in there. Highly, highly recommend.
--:-- Ryan Hanley: Before we get to Chad, big shout out to my people at Tarmica. Tarmica, T-A-R-M-I-K-A dot com. When I say these cats are changing the game, I know you think I'm playing. I know you listen to this and you're like, "Oh, Hanley's always talking about Tarmica." I'm telling you, there's going to be a day when you wake up and be like, "Oh no, I got on Tarmica late." That would be fine because you'll pay for the tool and you'll catch up because you'll be doing all this cool stuff. But I'm telling you, it is the game changer. No one is doing the stuff that Tarmica is doing. There are people pretending to do what Tarmica does, people positioning themselves in the same space, but there is nobody doing what Tarmica is doing. I'm telling you that right now.
--:-- Ryan Hanley: I just can't wait till you all see the full scope of what they're doing. Even right now, it's baller as hell and changing the game for small commercial and making it better every day. Some of the new features that are coming out are just awesome. So get the demo, know what it's about, be ready to pull the trigger when you feel it's time. Go to T-A-R-M-I-K-A.com. Get that demo today. I promise you, you will not be disappointed. Schedule for a Friday, schedule for a day you don't have anything else going on, but get the demo. You will not be sad that you did. Go to T-A-R-M-I-K-A.com.
--:-- Ryan Hanley: Okay, now on to Chad Spaide. You got me? Hey, what are you doing? Just doing the thing here. All right, keep the motor going. Mixing in some podcasts. That's about the deal. How's business going for you so far?
--:-- Chad Spaide: Okay. I'm not going to say that I'm dominating the world yet. I think we're on the path, but just hacking my way through trying to figure shit out, man. I will never forget that empty filing cabinet, Ryan.
--:-- Chad Spaide: I was talking to my wife about it because we took a three-day vacation to Cape May. A buddy in the insurance industry was busting my chops. He asked me a question, I said whatever. I said, "Hey, I'm going to be out of town for a couple of days because I'm going to Cape May." He said, "Oh shit, a six-month-old startup insurance agency." Part of it was I started the agency because I wanted to spend time with my family. The previous six years of my life before I started this agency, I was on the road three to four times a month. So a big part of the agency was, I'm not going to be gone all the time.
--:-- Chad Spaide: The other side of me was, I am a startup, six-month-old agency that isn't started with all this capital and setting the world on fire. I'm hacking my way through it. Did I really deserve it? It was a weird sensation, a weird thought.
--:-- Ryan Hanley: It is one of the most rewarding ones when you're at a level where you feel you're making it, or where you feel like you built a book. You should never fully feel that way because you always need to bring new in, but you understand what I'm talking about. You could take off a little bit and things are going to be fine.
--:-- Ryan Hanley: I had to reinvent myself once. It was about two and a half, maybe almost three years ago, a little over that. I took off three months. I only called the office twice. I was kind of nervous. I came back and the group grew. So it's a beautiful, rewarding business, but it sucks to start.
--:-- Chad Spaide: Yeah, it really does. The other thing that I found tough is this is the first business that I've been a part of that I've started from the ground up. I've never done a startup before. I do own another business, my speaking and marketing business, but that's always been a place to run revenue through when I do a speaking gig or consulting. It's not like I launched a business. It's always been a side thing.
--:-- Chad Spaide: There are so many things that I want to do, know I can do, and know I shouldn't be doing. You just can't do them when you're one person in a room and you don't have a mountain of cash to pay people to help you. Prioritizing has been very difficult because I want to do this and I see how to do this, but is this more important than this thing over here?
--:-- Ryan Hanley: That is the nature of the business. There are so many different channels where you'll have those feelings. This is a data-driven, complex business. Then you throw being an independent on top of it where you have all these different carriers. You start bringing on people and you can't see that you're in quicksand until you're in up to your ears. Is that the right decision?
--:-- Ryan Hanley: I listened to one of your other podcasts the other day. The great thing about the Facebook groups that we have today is that one of the biggest contributions IAOA has made to the independent channel is it helped us break down the silos. Before, we would just talk maybe at lunch once in a while or when you're on a company production trip, and then you probably never talk to them after that until the next company trip. So a lot of value is being slung around in between these groups. I love it because finally people are saying that you're not the only one in those shoes.
--:-- Ryan Hanley: The reps will come in and make you feel like you're the only one of my agents that aren't doing that right.
--:-- Chad Spaide: I know. What's probably happened for you is you're the only one of my agents that actually wants to do that thing. That's what I get so often. I'll explain an idea to them and they'll look at me like... I had one come in a month ago and I lost her. She just tranced out on me. She went like... I'm like, "Whoa, whoa, come back here." They're just not ready on some stuff.
--:-- Ryan Hanley: Yeah. I was talking to one of my commercial lines carriers about the first policy I'd written with this carrier. It was a BOP, a small BOP. I took the guy's credit card information to do credit card EFT, like every other carrier that I have does. They said, "Oh yeah, we don't really do that." I said, "What? You don't take credit card payments for your insurance BOP? That's not something you do?" They said, "Well, they can do checking account EFT." I said, "Wow, this is like 2004." I couldn't believe it.
--:-- Ryan Hanley: Then juggling that becomes a decision. This carrier over here is a hundred dollars more, but he can pay by credit card. So who do I want to go with? It doesn't matter.
--:-- Chad Spaide: Yeah. It's like, "Oh my gosh, it's just all the different things you got to manage." Then you throw people into the mix and it's like, "Oh yeah." Wait till you have one retire on you and don't tell you. They sit in front of you and they look like they're working hard, and you're like, "Where's it at?"
--:-- Ryan Hanley: Yeah, I know. I actually have two people right now that I'm in talks with about being potentially 1099 producers who have approached me. It makes me very nervous. The whole idea of it makes me a little nervous because I feel like I don't have the process worked out enough for myself, let alone to go teach another human the processes that I want to be done.
--:-- Chad Spaide: I think go with your feeling. It's probably right. Especially in the early years, you're in this thing where you're like... I learned this in the military. We always had a thing called "hurry up and wait." That's kind of where you're going to be living for a little while. You see it, you get to it. I had a guy come in my office, one of my agencies, and he said, "This is never going to change." I said, "I see it. I know it's there. I know it has to be dealt with, but I can't get to it right now. I'll get to it. Don't worry about that. But right now, there are higher priorities. That's the least of my problems right now." It's major on your side, but not on mine.
--:-- Ryan Hanley: I know. I'm in this place, and this will lead us into why I wanted to have you on for a bunch of reasons. I've been in your ecosystem for a while, watching what you do, and I love it. I'm such a huge fan of all the stuff that you put out and how much value you deliver, asking nothing in return. I have a ton of questions.
--:-- Ryan Hanley: To what you just said specifically, I have a very clear vision of how I want to operate this agency. It is crystal clear. I know the different types of business I want to go after. I know the brand tone that I want to use. I know the process that I want to build. I find myself every day caught between three things. I need to make revenue now to pay the bills. That doesn't necessarily completely align with where I want to be long term. At the same time, I have some tools that actually helped me grow the business, and I have other tools that only really drag me down. Changing from those tools to other tools is a whole other thing.
--:-- Ryan Hanley: You're in this place where you feel like you have all these shells. Which ones do I move? How do I make sure that the boat stays above the water line while at the same time trying to go from a rowboat to a powerboat?
--:-- Chad Spaide: It was very frustrating for me for a long time, even in really rapid growth mode. That vision, that brand, that service that you want to deliver, you can do it now. That's the good news. You're coming in at a really great time, in my opinion. But I had to set a good decade on not having the tools. In essence, we still don't have them. But you could take somebody who didn't even want to hook up a Bluetooth before, and if they're pissed off and persistent enough, they'll go learn this stuff and build what they need.
--:-- Chad Spaide: Because now we actually have access to it. Before, we just had to say, "This is what you use. We're the best. Pay us money and do your job." It bugged me for a long time, to the point where I almost lost my heart in it. I was kind of treating it like the average age, just some annuity that bothered me. It's exciting.
--:-- Ryan Hanley: It is exciting. I don't know if you have this or not, but I definitely... I don't know if it's because I have this vision of where I want to go, or because for so long and just the nature of who I am, I'm always thinking out into the future. I really do struggle with today. I can see where I want to go and I can build the path, but I waste a lot of brain cycles on that versus the brain cycles that need to be spent on this moment. That's a hard thing.
--:-- Chad Spaide: I hate to be a book dispenser, but I had to take a good smack in the head with *The Power of Now*. What can I do in this moment? The rest of the stuff... living in the past and fretting about the future doesn't allow you to get anything done today. That's what really needs to happen.
--:-- Ryan Hanley: I agree. Brian Falchuk is a big... I know you interviewed him. He's got it going on in presence.
--:-- Chad Spaide: Yes. No, he's great. For anyone listening to this show, you can go back and listen to the episode. I don't know how many it was ago, but Brian Falchuk came on. He's got a new book out, but he's got a bunch of books. Awesome stuff. Awesome guy. Great resource for the industry. What's great about his books is he's hit bottoms and he's recreated himself, personally and somewhat professionally. I really like that guy. We need him.
--:-- Ryan Hanley: Yeah, I agree. My wife is my grounding mechanism. If it were up to me, I would just float away. That's just the way my brain works. I would just float into the atmosphere.
--:-- Chad Spaide: That's why you started an agency, Lowe.
--:-- Ryan Hanley: Yeah. I'm serious. It used to be my ex-wife that would do that. Like, "Hey, what do you..." and I'm like, "Yeah, but we could go out and do all this." I know.
--:-- Ryan Hanley: This weekend, she asked, "What do you got going on this week?" I was telling her. She said, "So how many cold calls did you make last week?" That's my trigger for being in the now. If I'm doing the calls, doing the outreach, that's a part of bringing the business in. I have some advertising stuff bringing in small business and personal lines. But for me, I'm trying to bring in some of these middle market accounts that can help me get ahead because I like working on them.
--:-- Ryan Hanley: I said, "Well, last week I did zero." She said, "Well, you had two days." I said, "Yeah, but we left for vacation on Wednesday." She said, "So what were you doing that you didn't make your calls?" Now I'm starting to get mad at her. She has the most exposed nerve and she's just pressing it. I know that you weren't present. I know that you were doing stuff that isn't going to make you money in the next three months. You're working on shit that's a year from now.
--:-- Ryan Hanley: She said, "I think you need to take on a partner who's going to stay today all the time. Then you can do all the stuff from tomorrow to forever, but you need a today person." I think that's a good thing.
--:-- Chad Spaide: I used to do this thing with my ex-wife. She's a wonderful woman, one of the most amazing large group agents I know. I got her into the business. When I first started, when people asked me what I do at social gatherings, when it came to personal lines, I would do this and we do this. I was a big "clothes elephant" guy. She'd say, "What are you doing?" I used to piss her off because I felt like personal lines demeans me. We all have our little things that we go through.
--:-- Ryan Hanley: That is something that I am constantly fighting. The agency owner in me says I need to be doing personal lines. The reason I say that is because I've watched my wife's agency navigate a lot of ups and downs in both the local and national market. They're about 75% personal lines, and they've been able to weather every storm because we don't get natural disasters up here in New York. Our rates go up and down, but they're steady. We're not talking about wide, huge swings like you see in other parts of the country.
--:-- Ryan Hanley: I look at that and say to myself, "I'm staring at the blueprint." They work a 50-mile radius. I can take exactly what they're doing and do it statewide. I can replicate a well-run agency. Then I can replicate it with small commercial because I believe the same things can be done there. I also think there's opportunity in the middle market over the long term. I'm not saying I'll do all these things at one time. I'm saying stack them.
--:-- Ryan Hanley: I'm constantly flip-flopping between starting with the more ego-driven whale hunting middle market side, where it's like, "Cast now, oh, I go whale hunting." He writes it all the time and he's a whale hunter all of a sudden, which I think is great for him. But I also think he's a jackass. It's fun to make fun of him. Then there's the other side of me that says, "I also know and have people who are willing to help me set up these really well-run, streamlined, personalized processes which deliver good coverage, great price, great service." I can do that too because I understand those systems. On a day-to-day basis, I'm flip-flopping on where I should spend my time.
--:-- Chad Spaide: I've done that for a long time. We all have friends in the business. For me, in the beginning, it was mostly older people. A lot of times you don't forget the personal lines. Maybe right now we haven't seen the effect of what this virus is going to do to certain commercial agencies. When payrolls come in and they're less and they renew less, it's kind of what happened in the mortgage crisis. You see big firms go down.
--:-- Chad Spaide: I've had a million-dollar account. They sold. My friend had a $2 million and a $5 million account. One he had 10 years, one he had 15. He lost them both in one week. One sold. Everyone said, "Just time for a change." My ex-wife's largest group health plan, the owner died and the daughter came in and said, "We're changing all the vendors just because."
--:-- Chad Spaide: In the meantime, you've got all these little oil wells and you can close them fast and high volume. I don't prefer one over the other, but what I do prefer is direct bill policies. We used to have a lot of car dealerships. You're living your life around renewal dates. It's always five minutes to five o'clock on Friday and there's three guys with another 10 grand in their back pocket to throw at it. For me, it got old because I had to reset why I got into this business, which is what you said when we first started talking: it's supposed to create more time for my family. But now I can never go on vacation this time of year because this account has to renew. We could never celebrate the major holidays, Christmas and New Year's, because we had 31 dealerships renewing their comp on January 1st.
--:-- Chad Spaide: I just went back that route. For me, my personality where I'm at today, I'm all about direct bill, auto renew.
--:-- Ryan Hanley: Yeah. That doesn't mean I won't take an agency bill account. That's good, but I have to really be convinced they're going to be a good client. I have actually turned down two accounts that came in. Neither one were very large. One was about $7,000 in premium, the other was $5,000 in premium. They would have been agency bill accounts that very likely could have been sold. I talked with my wife about all this stuff because she's so involved in her agency. She basically runs her family agency now. They do a lot of agency bill stuff.
--:-- Ryan Hanley: I said to her, "If I had agency bill, I now have a whole other thought process that I have to walk through every month that isn't just, 'Oh, maybe I don't know exactly where I'm at revenue versus expense.' I literally have a fiduciary responsibility to the client's money. It's a whole other thing. Why am I doing that? Why am I walking into that?" Granted, a hundred thousand dollar, great account comes walking in the table, they need to pay agency bill for some reason, maybe I consider that. But a little account where I'm going to make $600 on this agency bill account? That just seems like a bad decision.
--:-- Chad Spaide: And you'll really be loving that one every year at renewal.
--:-- Ryan Hanley: Oh yeah.
--:-- Chad Spaide: We do them, but I don't like them. Sometimes out here for risk reasons to keep the account.
--:-- Ryan Hanley: There's an episode that hasn't actually come out as of us having this conversation, but will by the time this episode comes out, with John Mason of Shenango Brokers. He used to own five locations in New York, was offered the opportunity to buy a small wholesale operation named Shenango Brokers, and eventually left retail completely to grow this wholesale operation. Now he's in 24 states.
--:-- Ryan Hanley: I said to him, "I think a lot of people use wholesale brokers, but maybe they don't understand other than just access. Why would you use a wholesale broker?" He said, "I think one of the things that is incredibly underrated about using wholesale brokers is not just that you don't have a quota that you have to hit with a certain carrier if you're putting the business there. That's probably number one. But number two is if you take something like direct bill commercial auto with a commercial auto carrier and you peel that out of your direct appointments where you care about the loss ratio, and you put that with a wholesale broker, now the losses on that account go to the wholesaler. They don't go to you. Maybe you have the more profitable parts of the account in your direct bill carrier and you just peel off the unprofitable pieces to wholesale, and you can still do direct bill." I thought that was a really interesting way of starting to think about your business.
--:-- Chad Spaide: There are a lot of different ways. I looked into that when we were thinking about... I had an agent, a long-time agent, move to Texas. I thought, "I don't want a small book there." It destroyed my California loss ratio. But then you look at the maintenance of it. It's like, "Okay, then I got to go here and beg them to do this." If those types of places got their efficiency down, there would be a lot of reasons to use them.
--:-- Ryan Hanley: That's why I love being a member of Indium, the market access provider. Because of the nature of all the different work that I've done, the podcast, and being in the marketing industry for so long, I get opportunities from a lot of different states than New York. What's cool about Indium is through them I can write in any state. It comes through on their paper. I explain to the insured, "Hey, I work through a partner company, so it's not going to say 'Rogue Risk' on it. It's going to say 'Indium' on all the letterhead." It's a really interesting relationship where now you can serve someone you're referred to. I do try to refer out to other agents where it makes sense. But it's interesting how some of these relationships work. You might have somebody that moves to a state and you need a carrier that you can't write with there, but you have access to it there to keep the relationship.
--:-- Chad Spaide: We're having a hard time getting ASI in Texas, even though we already have Progressive. It's like, "Well, of course they're competitive there."
--:-- Ryan Hanley: All right, man, I want to swing. We've been bullshitting for 25 minutes now. Not that we couldn't do that for another 25 easy. But you posted something, and this was the impetus for reaching out. Not that I necessarily need a reason because there's so much stuff that we could talk about that you do. But you posted in your Facebook group, Pure Potential Insurance Automation, which is awesome and one of my favorites. I only probably do 5% of the stuff that you talk about, but I just love seeing it. I love thinking about the way that you think about this stuff.
--:-- Ryan Hanley: You posted this article from *Insurance Journal* called "The Value of Agency Data and Who Owns It." I read the article. I read your comment on the article. Then I came back and read the article again, and then went back and read your comment again. I immediately reached out to you after that and said, "This is a topic that data is everywhere. Everyone's talking about data. I think half the people, probably 90% of the people talking about data, don't even really know what they're talking about. I think they're just using the term." As someone who I think has a really good perspective on it, seems to have spent a lot of time thinking about it, and has a clear position, I just wanted to dive into this topic. To spend some time helping the people that are listening, regardless of what space they're in—vendor, carrier, agency—just kind of wrap their head around this.
--:-- Ryan Hanley: One of my dearest friends, Seth Zaremba, is on this mission for agents to own their data. At face value, most people are like, "Yeah, but I don't know that they even know what that means." Other people are like, "It doesn't matter." Another guy I had on the podcast, Chris Langell, is like, "Own your data, don't own your data. Why does it really matter?" I can see both perspectives. I think it's confusing for a lot of people. That's my intro to this conversation. Wherever you want to go.
--:-- Chad Spaide: In reference to the article that kicked off that post, this is about our clients' data. I struggle with it daily. It could be from the carriers, it could be from our management system. Of the management systems that I've had experience with, proper reporting has been very flawed. The reason for it is I think the way they store it. Some are using multiple databases and they're not even using the same naming conventions across those databases. When you get a report that says how many policies you have per household, it's more than likely nowhere near being accurate. Active versus inactive clients or policies, it's really difficult. To me, it seems so simple. If you have the database underneath it, why can't you snap and use it?
--:-- Chad Spaide: And then you're oftentimes restricted on developing your own reports. And that can be hard because does your management system have those variables that you can create a report on to pull? Years ago, I was with another management system. We would spend more time figuring out on their "home, no auto" or whatever list like that—what policies does this person have so we can call them up and try to round them out. We would spend more time reviewing the account to see that the report was wrong. So what happened? That killed our prospecting time.
--:-- Chad Spaide: So to me, at the agency level, whether there's interest in owning your data or not owning it, the purpose of this post was to specifically address how we can use it. That's the biggest part of it for me: how do I know what I need to know to run my agency and to help my agents, but more importantly, provide the experience to the client that they're expecting?
--:-- Chad Spaide: A lot of the stuff I build and use is like, what would I want if I were them? And then what would happen if we did that? Because it's really hard to do business with us, and it's primarily coming down to our tools. Nobody's fault, just how we got here. Technology is evolving so fast that a lot of this is available to us, whether we make it or somebody else makes it or some vendor makes it. It doesn't matter.
--:-- Chad Spaide: I think we collectively as an agency force used to just accept a "policies per household" number—what's your average policy per household—as fact. When a carrier rep would come in and say, "You might be running a fever on your loss ratio because of this," I'd say, "Okay. Based on what? Tell me what?" More than likely, it's their three-year snapshot, or they're not even sure. They're just bringing it off somebody else who ran a company-wide report for your state.
--:-- Chad Spaide: That gets me into, "Okay, how can we use this?" Why don't we have a report to know the spread on an agent to see if they're making it or not? Why don't we have reports for the—or at least the ability to do the 80/20 that Brent Kelly talks about? I love that. We actually did that and implemented it, and it was brutal to get something automated that felt like that. Because to be honest with you, if I pull Excel reports and upload them into something every month, it'll break. So I needed a way to make sure it was happening, and it was visible within our servicing automation for them to always know where that client sat.
--:-- Chad Spaide: So when I read the post on that, it hit me hard. Who owns it? Well, I don't know that for sure. But it seems to me we don't own it, because we can't get good access to use it how we want it. If you look at it in that context, I'm not determining value or anything like that. That's kind of what led up to it. We should be able to create a report to know where everything is in our agency and to use the data for how it can help us actually grow.
--:-- Chad Spaide: We should be able to know about a client's frequency over time of claims, how much time was spent on servicing, how many times did we rewrite them, did they lapse, all this stuff to determine it. That led into the 80/20 thing. If we have these people in the lower percentage, what's their policies per account? What's their revenue or commission per premium and revenue per account?
--:-- Chad Spaide: Since I'm personal lines heavy, I want to know in those 80% that make up X percent. It's true—I'm a little heavier than 20, but the 80/20 principle definitely rings true. It might be off, there might be a margin of error or a difference for every agency, but we have that. So when it's primarily personal lines based, I look at it and think, "What can I do?" If I knew the claims history, if I knew the service request—like how much time is it taking? Maybe it's a DP3 or a secondary home for somebody that lives in Canada and it'll never cancel. To me, there's a little bit of value there. So you start getting into opinions.
--:-- Chad Spaide: I like to look at it as, if there's no service and it's highly retentive and no chance, that's still a good account to keep in my opinion. You never know what may change—they may retire and move here. So I'll leave it on that part. On the policies per household, why don't we know the inactives? Why can't we have an API that just says "these are inactive" when we start, and give the agent an option: "Is this finally somebody we got rid of? Is this a celebration, or is this something that we messed up on, or they just got lost in our relationship?"
--:-- Chad Spaide: Data is going to be very, very crucial on how successful we can be, especially outside of our own agency's data for new prospects. The new popular thing coming out is your two-question personal lines quote. That technology already exists. There are some agencies that have it, and there are some new companies that are MGAs that already have that. They're finding new ways to rate, and it's ultra fast. As independents, we need to be able to compete with that because we are supposed to be advisors, in my opinion. We need to be able to do it at the speed of light. Maybe not as fast as these new insurtechs coming up, but we can't be light years behind it expecting people to wait around for us.
--:-- Chad Spaide: I think we need this data so we can work on the technology to reclaim our time, so we actually create the space to be the advisors that we all said we signed up for. That's kind of a quick summary of that article. That article goes deep in many ways for me because I do spend a lot of time on it.
--:-- Ryan Hanley: If you're looking for the article, it will be at ryanhanley.com forward slash chad dash spaide, or just look for Chad on the site. I'll have the article linked up in the show notes so you can see exactly what we're talking about. I'll also have the post linked up that kind of started the whole thing.
--:-- Ryan Hanley: To your point about the speed—I believe in Seth's mission wholeheartedly, mostly because I believe that I don't know that I actually care who owns the data. I do care from the standpoint of usability of the data. I agree. One of the things that I have struggled with is that I think in the same terms that you're thinking about. For me to even do that at my small level, at the very small level that I'm at so far early on, I can barely operate. I am literally still having to take data out of one system and hand punch into another system. Now I'm talking to Wes Anderson about a VA because it's not worth my time to do that. So now I got to hire a human to do this.
--:-- Ryan Hanley: To me, that's the part of the ownership of the data that is kind of inexcusable. If you can't deploy the information, if you can't deploy what you're learning to better serve your business, your people, your clients, yourself, your operations—if you can't actually deploy the data, then taking out the pure ownership idea, you don't own it. That's really what it is. If you can't deploy it, you don't own it. Taking away the pure ownership perspective from a contractual standpoint, I think the truth is really in between Seth and Chris in terms of how much we should care that on paper you own it. I don't know what that means really.
--:-- Ryan Hanley: I agree with you. I think your thought process is where we specifically as agency owners and agency personnel need to be thinking: can you deploy it? Yes or no. Can you learn in real time? Because if you have to wait for someone in your office to concatenate and pivot table three different spreadsheets to give you some basic high-level information once a month, then you're not actually being able to make decisions on that data. Who the hell knows what it looks like after all that work has been done and how accurate it is to begin with?
--:-- Chad Spaide: Well, it is. Most reports, if you ask the criteria, you just get deer in the headlights. "What makes this up?" Nobody's ever asked that before. "How do I know what I know or don't know about it?" Then you got to spend the time to be certain on it. Especially if you're going to make decisions or have conversations about that, it's awful embarrassing to have the wrong situation.
--:-- Chad Spaide: There's two parts of that. One is what we do with it to facilitate the growth and improve and grow our current relationships. But there's also the operational side of it where it's boiled down to commission statements and not a whole lot beyond that. When you get into it, we have a need now. I think maybe for some of us, and I think collectively the agent force is moving into awareness that we're doing things really, really long and inefficient. We don't know exactly what to do with it. There's some stuff that has to evolve and be created for us, but it's important to pay attention to it because we can't sit here operating with the strategies that we're operating with today if we're going to be able to compete.
--:-- Chad Spaide: One of those things is quoting and binding. You talk about BOBs a lot with Tarmica. I love that program. It's going to be really exciting to see what Rajiv does with that going into the future. But on personal lines as well, the most expensive thing—and it's not on your P&L—is data collection, quoting, and binding. If you spend some time surfing out on the web, you're going to find agencies and new carriers where with something as simple as an email and a cell phone, they already have everything. You're making models, dates of birth, DL numbers, all of that. There might be some specific criteria that we have to ask like discounts or in California work address, but for the most part, we should not be asking for that anymore.
--:-- Chad Spaide: I really think the rating companies can get it, but they haven't come around to it yet because we still like handwriting stuff down or having them fill out a quote form on our website and going back and using our finger again. How ridiculous is that in today's time? It's the same way as going back from e-signature. Who would want to go without that? You want to fax somebody or mail it out and wait for it to come back? Quoting is there today. The whole process is completely wrong for what you can pull in now.
--:-- Chad Spaide: If an agent can do that, everybody else can. Why are we still asking for any of this stuff? We should be in data validation and then talk about the risk. What did that do? It created the space to have a more meaningful conversation about the other stuff that we usually leave on the table. That's one of the things that bothered me once I got in the business. We were talking about that a little bit before—prospecting momentum. "Find your target and go pull it in." That's great, but what's the emotional roller coaster? The guy wants to quote, so I gotta quote it. The guy wants to bind it, so I gotta bind it. Then you get a snag where you have to call an underwriter in there and your whole day goes crazy. What happens to that momentum that you were supposed to create? It really destroys it.
--:-- Chad Spaide: If you find somebody that once their book gets going, where's prospecting? They better have built the relationships to get referrals because it's going to be really limited. Usually it's after an exhausting day of fighting all our software systems or underwriters that we finally come around to having the time to do that. But now we're in the wrong state. If you're not really skilled at shifting that state, your prospecting once again takes the backseat.
--:-- Ryan Hanley: It's funny. I actually believe to a certain extent—I have two thoughts. One, the technology for the data collection issue that you're talking about—that problem is solved. That's a solved problem. The reason it's not widespread is that the people that have it don't want it to be widespread. Why would you give that up? It's such a competitive advantage. If I have to ask 30 questions for a quote and you only have to ask two, you're winning. You're winning the game. I'm not winning. You're winning. So why would you make it easy for me to figure out how you're making that happen? You just wouldn't.
--:-- Ryan Hanley: I do think that there are companies like Tarmica, a few others, that are solving this problem and making it accessible to more agencies, which is a tremendous thing. But it's absolutely—I was talking to one of my, we'll say large national carriers. I hadn't talked to the rep in four months. He called me and said, "How things are going?" I said, "Things are going good. You probably saw that I haven't really placed much stuff with you. The issue is that it takes me 35 minutes to quote a home and auto with you. I can quote a home and auto with Plymouth Rock in about four minutes."
--:-- Ryan Hanley: Their home process is name, address, homeowner's quote. Then you just put in their birthday to validate and it is done. That's it. Policy's over. You know the price, you pick the coverage, they give you a good, better, best. The one in the middle is really good coverage. The only reason you'd want the best is if they had special circumstances. So I'm three questions for a homeowners quote. If you're in Pennsylvania and you have Hippo or you have Openly or you trust Swift in your state, you have three or four carriers that with just a tiny bit of information, you can pull back a ton of homeowners business.
--:-- Ryan Hanley: The fact that we have carriers that are still requiring you to enter, "Is there circuit breakers in the house?" is freaking bananas to me.
--:-- Chad Spaide: I know that.
--:-- Ryan Hanley: There are like 17 databases online that have that information. If you cross-reference two, you know the answer. You just pick the best one.
--:-- Chad Spaide: Well, we got that backwards a little bit. A lot of times you might go and collect all that, and depending on the client in question, it might take them time to get some of that stuff to you where the carrier already has it. It's like, you're making me collect it to put it in so you can tell me something's wrong. Let's just go with yours and I'll validate it with the client. That process—there's so much work and so much pushback on us that's stealing all the time from doing what we were really meant to do. I think what we signed up to do.
--:-- Ryan Hanley: I agree. The point that you made about all this data collection taking away from being able to be—it was 20 years ago or so that we really started to have the frontline underwriter taken away as part of the independent insurance agent's job. We were always kind of part of our job description, whether implied or explicit, that we were frontline underwriters for the carriers that we were directly appointed with. Over time, that has been seeded back to the carrier where now we just send them information and they send us a quote back.
--:-- Ryan Hanley: By removing data collection, we are given that ability back, which is better for the carriers. We get to actually talk to the person and learn about them. Is this person a kook? Their house may line up perfectly from a data perspective, but they might be completely batshit crazy. We can only figure that out by talking to them. If we're just going, "Oh, okay, no dog, great. Do your stairs have a handrail? Oh, yeah, okay, good, check. When was the last time your roof was completely redone?" Everyone says five years ago. "Okay, great, five years ago." We're not actually talking to the person. If you do spend that time, now your conversation's an hour long and no one's giving us an hour. You're not getting an hour on personal lines anymore on the phone with somebody.
--:-- Ryan Hanley: That's stopping you from going into the conversation and figuring out what their values and beliefs are and what's important to them. I'm not saying this because I want to get out of work. It's an unnecessary need. We need to validate, not chase down and do all of that stuff. I certainly don't want to take away anything that's our responsibility. But I know I can get the data right now. I just haven't gotten to it right now. We don't need those big handful of data providers to get at it anymore. It's so abundant out there and it's cheap. We can get it now. It's pretty much available for anybody.
--:-- Chad Spaide: It's just a matter of getting the time to actually bring it in. But you're going to need an API. You're going to do one-offs. But you get my point. We really shouldn't be doing that anymore. We need to actually make sure it's correct and get into the conversation to figure out how we can actually be the advisor role that we were meant to be. If we don't create that space and we stay buried underneath our work, it's going to really start taking away from the profit margin.
--:-- Chad Spaide: The second level to freeing up time is properly setting expectations for the relationship as well, which drastically improves retention. So much of retaining business—and this I know from my old, obviously I haven't renewed a single policy yet, six months in—but from eight years in the business prior, so much of that was taught to me by my father-in-law. The last 10 minutes of every conversation was setting expectations for the next conversation. If you are ultimately binding that policy, setting expectations for what the relationship would look like moving forward.
--:-- Chad Spaide: By doing that, our clients at the Murray Group had no surprises. Rarely surprised—the one-offs were the surprises. It wasn't like people were ranting, things were randomly happening. They always knew what the next steps were. That's why the Murray Group has amazing retention rates. Today, a lot of times when I listen to someone talk about struggling with their retention rates, when you dive into it, it's because they either feel like they don't have the time or they're not able to make the time in their business to properly set those expectations so the customer knows what's coming next.
--:-- Ryan Hanley: Those are tough ones. The first thing that pops into my mind—I'm not saying it's going to be everybody's case. Sometimes it's geographical or it's the markets there. But if you're matching coverage and beating price, I really think it's not going to be a whole lot longer before you're feeling some pain. They need to know why they're buying you, and they want to buy you.
--:-- Ryan Hanley: One of the scariest things a client ever said to me was, "That's what I had you for." I'm like, "Whoa, I thought you were cheap." If we let our own opinions and judgments go into it, aren't we managing their risk by default to the worst? We have to give them that opportunity. I don't think it's really about price unless it's ridiculous. If it's tripled, double, triple, it doesn't make any sense. Help them out where they need to be.
--:-- Ryan Hanley: If I were to send out a text message to a hundred prospects—and I've done this before—and say, "What's most important to you about your insurance?" Depending on their situation, if we're talking normal, stable people, price is usually last if mentioned at all. They want to know they have the right coverage. They want to know they can get service, callbacks. "Do I have what I need?" When they don't know what they're buying is when they default to price, which is what we do with stuff outside of insurance all the time. It's the natural thing to do. But when we know why we're buying it and what the value of it is, what the differences are, then most of the time we end up paying a lot more than what we expected.
--:-- Ryan Hanley: Let's say you're able to—and this is kind of where I want to finish, just being respectful of your time. I want to coast this in because we've gone a lot of other places other than data, but it's all good. Let's say you are able to, quote unquote, own your data. I know you do a tremendous amount of work inside of Infusionsoft, and your Infusionsoft probably looks like a cartoon metropolis with all the buildings and networks and throughways. You're able to actually take ownership of it. What is possible? What do you see as a deliverable result? Where do you see agencies being able to go when they can actually pull this stuff out?
--:-- Ryan Hanley: You're probably one of the few agencies that has gotten close to this idea, or as close as possible. Where do you see agencies being able to go? They've probably heard so far and gone, "This sounds great. I can buy into everything these two yahoos have said, but what the hell's in it for me?" What are you able to do because you've spent time thinking about this?
--:-- Chad Spaide: It's really limitless if you go from any sort of memo to ongoing the relationship and getting out of the cross-sell business. I feel cheap when I sell that because it makes me feel like I'm getting a quick hit. But if you can begin to look at the household or small business overall risk, there's a lot of stuff that you can do in there. If we add direct access through full APIs to the carriers and our management system, if necessary, you can start to trigger stuff.
--:-- Chad Spaide: Some stuff you can never fully automate, in my opinion. I don't want to send a cancellation notification to some guy who just passed away or got divorced or moved out of the state and legitimately we lost them. The same way with if you're sending an automation to somebody saying, "You reviewed it and it looks great, just go ahead and renew." You don't want to send them something saying you're going to reshop it when he just added a 16-year-old. There's some stuff—you could tag them when that event happens if your automation system's on the tag system. You can really start getting into their lives with meaningful, direct, specific-to-them communications.
--:-- Chad Spaide: So far, the ones that we can do are having incredible results. It's really fascinating to see it actually living and breathing because we're not sending them any newsletter or pumpkin recipe or "stay safe on the 4th of July." The only thing they're getting from our office is just a happy birthday. The rest is specific to managing their risk when that happens. Some of it's manually triggered. Some of it happens through automation and their reaction. It really starts letting them feel like you're there for them, and you're not going to send them junk. For me, it can never be a miscommunication because then they're going to go tone deaf on everything.
--:-- Chad Spaide: I'm having a hard time answering your question because as the risk changes or things happen within the policies, you can actually direct it to happen. But you can also know before it happens so you're aware of it and making it visible. I think that's where it is. A lot of times we can let them experience the insurance. We can facilitate them managing their risk as their lifestyle or life events happen in an automated way where the agent still produces it, the advisor is still advising. It's just they have the support.
--:-- Chad Spaide: Just like two-question quotes free up our time. If you're going to really manage middle-class-up household personal risk, you're going to need that same efficiency in there to start tying this all in together to support the agent. They can free themselves up to build and maintain the relationships. That's really where it'll go. I know I'm not getting too specific on that because it's really difficult to answer in one specific question. But you can actually tie things to the account that's specific to them, whether it's claims, renewals, rounding out through education, stuff like that.
--:-- Ryan Hanley: I think the way I envision it—yes, it's tough. I can see what you're saying. It is a very difficult thing to describe. This is a terrible term, but it's taking a true holistic approach to managing an account that I think traditionally we'd be seen as too small to do that. When we think about holistic risk management, we're thinking about these big middle market accounts that are $250,000 to $500,000 in premium. I believe and agree that these solid package accounts that the middle class person is buying—or I don't want to say middle class, it's just these package accounts that people have—you can do similar risk management to them.
--:-- Ryan Hanley: You can help them better understand, you can retain them, and you can get them to draw in more customers and be magnets in and of themselves to your agency. But it can't just be "write the policy, forget that they exist until they create a problem, try to solve the problem, act like that's service, and then forget about them again until there's another problem."
--:-- Chad Spaide: I think that's where it's going. Part of the reason why people would default to price is that they're not working with somebody that's actually taking the time to get to know them to see what they need. But also we don't really have an efficient way of letting them experience what it'll do for them before they need it, in a way to actually go back and re-experience that if they're ever in question, all while collaborating with a real insurance advisor.
--:-- Ryan Hanley: It's why I've been preaching content marketing for 12 years in the insurance industry. I think it now more than ever. When you look inside operations that are really running well, it's a content operation. You have to be thinking in terms of how you are explaining things to people.
--:-- Ryan Hanley: I don't mean content like doing fancy videos and all this stuff. Not the videos, not important. I just mean even simple emails, simple communications, templated messaging that you can slightly personalize when needed. These types of communications—thinking through, "Hey, in this moment when they're doing this, we need to be thinking about how we say this thing to them." That's content, even if it's not fancy. The kind of fancy content I think a lot of people think about—that's an incredibly important part of delivering our product because we don't... they're not Jordans. We're not selling sneakers. We're not selling some product we can take an Insta banger of. We're selling a promise. And if you can't describe it or talk about it, then I think it gets lost on people.
--:-- Chad Spaide: Yeah, it does. And the good news is that all that is available to us. And it's going to come one way or another, maybe in some form. I think we're definitely in for disruption. We'll see a lot of the ones that are going to challenge us fall away. We'll see some of the ones we have maybe not be so dominant. But when you said three years, no doubt—no longer than five years—we're going to be operating totally different. And we're going to have to maintain profitability because, what was that Grant Davis said? I love that guy. He's like, "Nobody needs a quote." And he's right, because you need to know what your risk is. And now with the technologies there, it's very easily done to actually bring it to life and let them experience it and re-experience it when they forgot. So when it comes time to renewal, they understand why.
--:-- Ryan Hanley: Dude, this has been an awesome conversation. I could do this for like three more hours. I usually know by this point what I'm going to title the podcast because you'll have said something. The guests will have said something. I don't even know what I'm going to title this yet because we've gone so many different places. But I'm so glad we were able to connect and spend some time. You gave me some great advice when I was first forming Rogue, and you spent some time with me. I really appreciated that. I'm a huge fan of what you're doing, man. And I love the Facebook group. I think that the way you're thinking about the business is the future of the business. I just posted an article on LinkedIn called "The Human Optimized Agency." I believe there's a lot of different forms of that—there's no right way—but this concept of being human while actually optimizing your agency for the future, we all have to be thinking through this filter. I think you're one of the guys right on the leading edge. So I just appreciate you and I appreciate your perspective.
--:-- Chad Spaide: Great. I appreciate that. Thanks for having me on.
--:-- Ryan Hanley: Yeah. And for everyone listening at home, is it cool if I shout out the Facebook group? Anyone can join that, right?
--:-- Ryan Hanley: I'll have links to Pure Potential Insurance Automation. It's tremendous. Even if you're not an automation geek, you don't have to be—just to know that this stuff is happening, to see it come through, to see the conversations. It's tremendous. I'll have that linked up and everything. But hey, man, I appreciate you. Be good.
--:-- Chad Spaide: You go fuck yourself with your fat fucking ass. Thank you. Thank you. Thank you. Do you want to have a few drinks and smoke a joint, Bubbles? Yeah.
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