[00:00:00.18] CHIP BACCIOCCO: here's my magic tip to any agent, that as you said, you've got to sort of stop them in their tracks, the customer, and get them to believe that trust factor, trust the choice.
[00:00:13.39] NARRATOR: This is the Insurance Technology Podcast, where we bring interesting people from across the insurance ecosystem to discuss and debate technology's impact on the industry. Join us each episode for insights and best practices from industry stewards and tomorrow's innovators. Now, here's your host, Reid Holzworth.
[00:00:34.51] REID HOLZWORTH: All right, we're back with Chip Bacciocco from Trusted Choice. In this episode, we're going to get into what Chip coined the producer availability challenge and what he and his team are doing to solve this epic problem. It's really cool stuff. Stay tuned. It's going to be awesome.
[00:00:53.91] CHIP BACCIOCCO: You're exactly right. And we encounter the exact problem that you have described every day. So the challenge, I now call it, the producer availability challenge.
[00:01:05.97] REID HOLZWORTH: The producer availability challenge, I like it.
[00:01:06.99] CHIP BACCIOCCO: Sounds very fancy, academic. Sounds like we researched it.
[00:01:10.83] REID HOLZWORTH: It's very peaceful.
[00:01:11.43] CHIP BACCIOCCO: Sounds like there's math behind it.
[00:01:13.35] REID HOLZWORTH: And they say, you suck at that.
[00:01:14.19] CHIP BACCIOCCO: Well, they do, they suck. So we've had our own site secret shopped, whatever you call that, secret shopper when you have somebody, right. I've even had board members, board members, executives of nice insurance companies that have gone to the site and said Chip, I'll secret shopper it for you. And they put in their real house and their real cars. And they have nice houses and nice cars.
[00:01:34.77] And they hit, Choose a Couple Agents and the same thing as you, nobody fricking called them. How is that possible? Then they'll let me know, usually 48 hours later, I did it. It's been 48 hours. And maybe in the 44th hour, they heard from one guy, right.
[00:01:53.22] We've had employees do it. I've done it. Doesn't matter. Insurance, what they think, mistakenly, is that they have time. And they don't have time. You're exactly right. Right, so I don't know why they think this, by the way, because in the rest of their lives, they expect everything else to be instantaneous.
[00:02:10.59] When they're doing their Christmas shopping this month on Amazon.com and they're like, oh, I'm going to buy my wife a popcorn maker or whatever you're going to do, and they go through and they see all the different choices and they go, I want that one. They would never accept not hearing back from Amazon as to whether their order was placed and when it would be delivered. They wouldn't wait two days for that. Would they?
[00:02:31.54] They'd be like, I pushed the little buy button and nothing happened. Right. And that's what we do to them in the IA channel historically is they push the button on whatever website, it could be an agency website, TrustedChoice.com, choice lots of other places. They push the button and nothing happens.
[00:02:48.87] I mean, maybe they get a little thank you for submitting your thing, we'll be back to you shortly. That's not good enough. They want to know, to your point, they were out-- they had to solve their problem that afternoon. They wanted to place, especially business insurance. They've got other things to do, right. I need to get. I need a certificate of insurance. I need my GL placed today. I'm going to spend two hours on this.
[00:03:06.78] If that agent is not talking to that customer in less than 10, 15 seconds, they go to the next website. And they do it all over again, you've lost them. The first person-- I loved what you said when you said, the first person I talked to-- I've been trying to teach agents for years, because we record all the phone calls to that come through TrustedChoice.com. So I've heard the train wreck conversations and I've heard lots of them, like when they make the person answer the same set of questions three times.
[00:03:34.89] First, they answer them all for the receptionist. Then they go to the next screener, they answer the same questions. They go to the next screener, they're like are you kidding, I told my last name three times now. But whatever. Yeah. It's just a train wreck with all that stuff.
[00:03:48.90] REID HOLZWORTH: By the way, I want to talk about that real quick.
[00:03:50.68] CHIP BACCIOCCO: Sure.
[00:03:50.88] REID HOLZWORTH: Because we did, in our agency we did studies on that. We had super high conversion ratios once we get somebody on the phone. That's the reality. And what we did was, and so like, we had the agency-- my ex-partner and I, we had crazy high conversion ratios. I'm not even going to say it because people aren't going to believe me.
[00:04:05.49] But like, why? Because we knew what questions to ask. Very quickly, we knew what to say and we could quote it real quick for them. Like we we're just experts on that. When we started scaling our agency, we started adding people, their conversion ratios were like shit compared to ours.
[00:04:20.73] Well we pulled the calls. We recorded every call, right. And so we pulled all the calls. And they were doing just that. What happens is that they would get the call, and they would ask them like 10 questions, right. And this is like, it's all different types of things. But like the majority of it was this, they'd ask 10 questions. They'd hang up. They go, OK, let me call you back.
[00:04:41.10] They would call them back again, and they go, oh wait, I forgot to ask you this thing. Oh wait, oh, blah, blah, blah, blah, blah. Hang on, call them back again. Blah, blah, blah, blah, blah. Now by that time, one, somebody's probably already on the phone with them.
[00:04:56.00] And that somebody, you know like some of these guys that I used to work with, and even us in our agency, has pure script, the whole nine-- has actual flow like a wizard where you're asking questions all conditional, oh, do you own a home? Yes. Oh, OK. This address? Oh, yeah. Blah, blah, blah. Ask a couple homeowners' questions, even though they're getting an auto quote, you're still quoting them home insurance at the same time. Stuff like this, they're going through a flow.
[00:05:18.00] Oh, your phone is ringing, oh, don't worry about that. That's just one of my-- I've been in call centers where the guy is like, oh, don't worry about that. That's one of my colleagues calling you right now. Don't even answer. Yeah, seriously. 100%. I've seen people do that shit. These guys are pros.
[00:05:31.68] Anyways, and so what would happen, though, is if you ask the same question, multiple times, or you hang up and call them back to ask them more questions, you lose confidence--
[00:05:44.97] CHIP BACCIOCCO: Oh, 100%.
[00:05:45.81] REID HOLZWORTH: --in that prospect. That prospect is just like, what are we doing here?
[00:05:49.77] CHIP BACCIOCCO: They don't know what they're doing, you know, It's I'm going in circles.
[00:05:51.69] REID HOLZWORTH: Exactly, or like you just said, I just gave that to Jeff. I just gave that to Mary. You know, why am I doing this again? You know, and that's-- and so--
[00:06:02.02] CHIP BACCIOCCO: They still don't know if they're going to get help at the end. So here's my magic tip to any agent that as you said, you've got to sort of stop them in their tracks, the customer and get them to believe that trust factor, trust the Choice, that trust factor that this is going to work out OK. There's going to be some questions, but this is going to work out OK.
[00:06:19.57] And here are the magic words, and I've heard it on the phone. I did not come up with this. I learned it. The customer states what their challenge is and then this is what I want the agents to say, if they can do it, I can help. Just those three-- That's it. I can help.
[00:06:36.17] I've heard the voice of the customer. You can feel the stress come out of them. Now they're prepared to answer questions, because they want to know that if I answer the questions, you're going to help me.
[00:06:46.04] REID HOLZWORTH: That's a great tip.
[00:06:46.43] CHIP BACCIOCCO: We're going to get through this. If I just, all I do is answer a question, it's all one sided. Tell me your name. Tell me this. Tell me-- why, I'm telling you an awful lot of stuff. And then I have to tell it again to the second person. And I still don't know if this has any positive outcome for me.
[00:06:59.90] We could get through all this and you say, go to hell, we can't help you. That's a waste of my time. Tell me now, can you help me or not? And so when I've heard agents go, just, whatever you start, I'm looking for insurance for my two cars. I can help. I can help. Let's walk through it.
[00:07:15.08] REID HOLZWORTH: Oh, 100%.
[00:07:15.71] CHIP BACCIOCCO: Right. I can help. Just say those words.
[00:07:17.81] REID HOLZWORTH: I like that.
[00:07:18.26] CHIP BACCIOCCO: And then do something, and then there's a little process.
[00:07:21.08] REID HOLZWORTH: I think, we used to do-- I don't remember the exact script, but what we used to do too is we'd say, listen, we have x amount of carriers, all the markets out there. We have this huge inventory of products that we can offer you. So I'm just going to collect a bunch of information from you and we're going to help you out. We're going to find what makes the most sense for you.
[00:07:40.10] And it's funny. We won so many deals because of that, like saying that. And the other thing too is they go, oh, I just got a quote from this guy down the street, whatever it was, and it was less money. I said, oh, who was it? And they'd say who the carrier was. And I said, no, it's not that, it's this. And they go, no, it's not, it's cheaper.
[00:07:57.35] I said, you watch. When you go under there, it's fine. You can go ahead and buy it. I'm telling you right now. I'm professional at this, blah, blah, blah, blah, blah. But go ahead. And go quote it. They go down to that office to buy that policy and it would come back to, we were saying, you know, and they would walk out of that office and come back and buy the policy from us.
[00:08:15.17] CHIP BACCIOCCO: I'm told that happens all the time.
[00:08:17.48] REID HOLZWORTH: All the time.
[00:08:18.17] CHIP BACCIOCCO: But getting back to the, I can help. You have to get to the point where you can say that in a timely manner. This is the first part we were talking about. You can't wait a day, then call them back and go, what do you need? Oh, I need help with my house insurance. Oh, I can help.
[00:08:31.73] That won't work because they've already talked to seven people. You missed it. Yeah, so go back to that Amazon.com. This is what I call the producer availability problem. Here's the issue. It's not-- I used to think that the agents were just lazy. They're not. I mean, they are-- there's some that are. That's really-- mostly, they're just busy. They are helping some other damn customer.
[00:08:50.63] REID HOLZWORTH: It's prioritizing them.
[00:08:52.40] CHIP BACCIOCCO: They're literally on the phone with customer 24, and if 25 comes in, they can't drop the phone and be talking to them in five seconds. And I want them talking in five seconds. So or their whatever-- we all live lives. Remember, agencies are relatively small. They have four producers, five producers. How could any one of them be available like as fast as a State Farm giant call center could be? Right? You can't do it.
[00:09:21.09] So that's what I call the producer availability challenge. And it's unique to the IA system which is, we have all these independent agents. And pick any town you want, Cincinnati, Ohio. If you added up all the independent agents as if they all worked for one company, I'm going to make a number up here. There's 500 of them, whatever, that are producers that are qualified to help you with something.
[00:09:39.89] But you can't call one number to get distributed to 500 to see who's available right now. So you have to pick one out of the 15 or 16 agencies. You pick one and maybe, possibly, somebody is ready to talk to you right now, but probably not. Then you have to find the next one, find the next one, find the next one.
[00:09:58.52] So TrustedChoice.com has really figured out that this is the issue, the challenge that we can step in and solve. And we do it through, you've heard me talk about this before, Claim It. So Claim It, I don't know if you remember, is just Uber for insurance agents, meaning, we take in that prospect and we realize, OK, we have a pizza--
[00:10:17.45] I'll switch to commercial lines. We have a pizza shop. I always do barber shop, but I'll do pizza shop.
[00:10:22.13] REID HOLZWORTH: Yeah, there it is. I use barber shop all the time too. You say that.
[00:10:26.15] CHIP BACCIOCCO: Yeah, I know. So I'll use pizza shop. It's the same thing. No chairs. People throwing dough in the air, probably some kind of hazard there I don't know about. Anyway, hot dough. The pizza shop owner is looking for insurance. They come to TrustedChoice.com or anywhere. They come to some part.
[00:10:41.81] If we can capture that pizza shop owner for just a second, just have enough information about them, like, it's a pizza shop. We know the person's name. We know how many years they've been in business, maybe how many employees, and what are they looking for, work comp, general liability, whatever?
[00:10:54.50] That's all we really need. We don't need enough to underwrite the darn thing. Just get enough, oh, it's Joe's Pizza Shop. And then we know at TrustedChoice.com because of that giant network of independent agencies, we know who the agencies are in Cincinnati.
[00:11:07.04] And if they'll tell us, we know a lot, but we'd love to know more about which ones of them love to write pizza shops and have other pizza shops as clients. That's the appetite part. We also know which IA insurance companies have an appetite in Cincinnati to write pizza shops.
[00:11:22.67] We've put all that puzzle together inside of our system. And then we poll 15 or 20 local producers in Cincinnati that we know have appointments with insurance companies that can write a pizza shop and that they themselves, that agency wants to write a pizza shop, and we poll them in real time on their phone and go, we have a pizza shop. Who can help right now? Right now being the most important words. Who can help right now?
[00:11:46.04] Just like Uber, who can take you-- who can take Reid to the airport right now?
[00:11:50.24] REID HOLZWORTH: Yeah, exactly.
[00:11:50.99] CHIP BACCIOCCO: Right. One of them goes, I'll take Reid to the airport and they click their little button and boom, that driver is on his way to you. We do the same thing with insurance producers. So we believe, and we are really seeing some math on this that could solve the independent agency producer availability challenge, that we're going to basically have this giant network of producers all across the country.
[00:12:11.09] When an opportunity comes in, in real time, we will poll and just ask them, who can help this customer right now? And when they push that button, boom. Hopefully, if it's a warm transfer, they push that button, they're in a conversation immediately with that customer.
[00:12:25.40] REID HOLZWORTH: Yeah, that's awesome.
[00:12:26.54] CHIP BACCIOCCO: That's where we got to get to. And that's what we're going to work on. That's our-- we've really made a lot of progress here at the end of 2022. And 2023 is going to be all about building out that claimant capability even further.
[00:12:37.76] REID HOLZWORTH: Unfortunately, I mean, just being real on this, because I could see a lot of people clicking it and going, oh, I'm available and they're really not. And they don't call.
[00:12:45.80] CHIP BACCIOCCO: They have to pay money right then and there, Reid.
[00:12:48.50] REID HOLZWORTH: There we go.
[00:12:49.18] CHIP BACCIOCCO: Skin in the game.
[00:12:49.79] REID HOLZWORTH: Yeah, that's true.
[00:12:50.78] CHIP BACCIOCCO: Skin in the game. So I mean, you can do that if you're just frivolous with $30 at a time or whatever the price is going to be for various leads, but yeah, that's--
[00:13:02.70] REID HOLZWORTH: And then I would also assume that you're going to have to-- you're going to have to do a deal with the National Call Centers in some ways where these local guys, they just don't want it. It just-- it goes to somebody that's going to take it.
[00:13:16.16] CHIP BACCIOCCO: We will.
[00:13:16.73] REID HOLZWORTH: Because what infuriates me about this, and we talked about this before, it really does piss me off, like what happens is when you guys are doing all this marketing. Somebody comes in to TrustedChoice.com. They submit their information to get a quote through an independent agent and nobody calls them. What happens? They go to frickin' a captive.
[00:13:36.35] CHIP BACCIOCCO: They do.
[00:13:36.92] REID HOLZWORTH: They do. And guess what, you'd call, name a captive, not to name names, they're going to answer the phone. And they're going to give you a quote, right then and then.
[00:13:45.77] CHIP BACCIOCCO: That's certainly for personal lines, you bet.
[00:13:47.45] REID HOLZWORTH: Yeah, exactly. Commercial a little bit different. But like, generally speaking, I mean that's what happens. And that's-- all that marketing, everything you guys have done to tell the customer that they should live in the IA channel, boom, now, they're gone.
[00:14:05.74] CHIP BACCIOCCO: I know. And that's a tragedy. I think the good news is we make, at the end of the day, I think everyone needs or wants to know there's some human being that's looking out for them and their insurance needs. Now if you're--
[00:14:19.37] I remember when I was-- we were talking about when we were young and crazy and I was an intern in Chicago and I needed a renter's policy. I didn't even have a renter's policy, and like a non-owned auto kind of thing. It's very little. You could buy that online. You don't really need an agent. I didn't even care to be honest with you. My parents said, you have to have it, so I was just trying to make them happy. Yes, I have a renter's policy.
[00:14:45.86] But once you have a family, once you have property, anything to protect, you have kids, you have a wife, you have a spouse, whatever it is, or you have any kind of business, right. You have even two or three other families that depend on that business to keep going, suddenly, you can't just say to everybody, well, I pushed the button on the website.
[00:15:06.59] I thought I was covered. You want to have somebody. I know Mary. And Mary looked me in the eye and said, you're covered. And you know, right.
[00:15:16.40] REID HOLZWORTH: That's true.
[00:15:17.00] CHIP BACCIOCCO: There's value to having that. We just have to get better as an industry, a lot better as you're saying and I'm saying too, we have to get a lot better at being much faster and much more responsive.
[00:15:27.11] REID HOLZWORTH: You know what the other thing too is funny, is in the IA channel, I feel like a lot of people, a lot of agents are picky about the stuff they write too.
[00:15:37.07] CHIP BACCIOCCO:
[00:15:37.25] REID HOLZWORTH: Totally. And it's like why. Why do you care?
[00:15:38.72] CHIP BACCIOCCO: I don't know why.
[00:15:39.35] REID HOLZWORTH: It's like I don't want that non-standard business. I don't know. I run a business. And my business is to drive as much premium as possible. If you're non-standard and you're paying $700 a month for auto insurance, I would rather write that policy than 10 $700 a year auto policies. Why do you not want that? And that's what's crazy.
[00:16:01.16] You have to have the markets for it. You're not going to put that with the Hartford Travelers or Liberty or something. Not going to compete any names, but you know I mean. You put that with the company that makes sense for with.
[00:16:16.11] And so it's like, that's part of it too. It's like, nah, I don't want it because it's not exactly what I want. It's crazy. I used to-- back when we had the [INAUDIBLE], we'd write everything. We'd go-- I'd go to-- our people would. They go to all of the captive agencies, State Farm, Allstate Nationwide, Farmers, all of it.
[00:16:36.05] We had somebody go out every day. And they go out and they buy them all cookies and he'd say, send me all the shit you don't want, literally. Send me the shit. And you know what, I'll tell you. This is a great sales thing for you guys in local market. Go to the captives and be like, hey, we love all the stuff you guys don't want.
[00:16:51.44] Because here's what happens. You know, Mary and John Smith get a DUI, right. Mary gets a DUI, let's just say. State Farm cancels it. What are they going to do? There's like, yeah, we got to cancel all of your insurance. That agent has been working with them for 20 years. And they have all their kids' stuff and their family and all this.
[00:17:10.82] They don't want to say, sucks to suck. Go on the internet.
[00:17:14.51] CHIP BACCIOCCO: No.
[00:17:14.99] REID HOLZWORTH: They want to say, hey, I got a guy that's like-- to your point-- that's going to help you. Right, you help them. And then all of a sudden, sure, maybe the personal auto is nonstandard. But then you get all the commercial lines, all the personal line. You get all of that like. Why do you not like-- people are like, no, I don't do that kind of stuff. I just laugh at them, like why would you not?
[00:17:36.06] CHIP BACCIOCCO: I don't know. The one that bothers me more. Your example is totally valid. But the one that bothers me is when they don't want to write just a renter's policy.
[00:17:45.29] REID HOLZWORTH: It's not worth that person.
[00:17:46.85] CHIP BACCIOCCO: Because that person--
[00:17:48.26] REID HOLZWORTH: It's a frickin lead man. It's an opportunity.
[00:17:49.98] CHIP BACCIOCCO: It's an opportunity. That person is going to become a 35-year-old and a 45-year-old. And they're going to have a bigger family. And they're going to maybe have a business. And you're denying yourself the opportunity to have yes, a non-profitable relationship right now. But so what? It's an investment. Make a friend.
[00:18:09.26] REID HOLZWORTH: That's right.
[00:18:09.80] CHIP BACCIOCCO: Make a friend. You can never, in this world, do wrong by making a friend.
[00:18:13.97] REID HOLZWORTH: That's like-- so have somebody in your office that's focused on, the younger person that's getting started in the industry.
[00:18:23.39] CHIP BACCIOCCO: Absolutely.
[00:18:23.82] REID HOLZWORTH: Renter's policy done.
[00:18:25.15] CHIP BACCIOCCO: Done.
[00:18:25.58] REID HOLZWORTH: Track it. Put it in the system. Conversion ratios. What are they doing? When are they closing? Oh, what do they cross them? I can tell you right now, when I was an agent, I was 2.66 policies per customer. Like literally, like what's your policies per customer? Are you cross-selling? Because that's just it. If they're renting, they probably have a car.
[00:18:46.64] CHIP BACCIOCCO: They do. Right. Or they will.
[00:18:47.90] REID HOLZWORTH: They probably have friends that have the same thing.
[00:18:50.36] CHIP BACCIOCCO: That's my other strategy. I'll have some agents say well, you know, I don't want to do an RV or I don't want to do a snowmobile.
[00:18:57.37] REID HOLZWORTH: Oh, that's another one.
[00:18:58.16] CHIP BACCIOCCO: I'm like, if anybody that owns a snowmobile, that's not the only thing they fricking own. Are you kidding me? A snowmobile? Who own just snowmobile? This is totally a toy. So he's got to have a car. And he's got a house, or she's got to have a house.
[00:19:13.43] So those kinds of things, thinking a little bigger, I did have-- I have had a couple of agents that really were very creative. There was an agency that wanted to buy all the flood leads. I'll use the word leads. I'm getting used to it, opportunities, referrals, whatever. I want all the flood stuff, by itself, monoline.
[00:19:30.68] And a lot of agents were like, oh , I don't want to do it. But it's-- but there's a house that comes with it. You don't buy-- there's other stuff. Anybody that's-- plus it always signals to me that it's a responsible person, like that's-- like some people avoid buying flood unless they're told they absolutely have to and the mortgage company needs it and blah, blah, blah.
[00:19:51.92] But if somebody just voluntarily steps voluntarily, steps forward, and says, I just want to have flood, just in case. Yeah, oh my gosh. That's like a responsible person. They're like protecting everything. That's like the dream risk. That's what you want.
[00:20:04.26] So there's little signals in the market. You've got to think ahead. Where will this person be later? Who might they know? How do I-- And that takes time.
[00:20:12.26] REID HOLZWORTH: It's developing that. But I think going back to your point about the producer availability, I think as a producer or an agency owner becomes more mature and they have that book, the reality is they're dealing with kind of their core set of customers all the time in things, real estate developers, huge corporations, whatever it may be, high net worth individuals.
[00:20:37.29] And so they-- because I've been there. And you're busy, right. You have a lot. But here's the thing guys, hire somebody to take that stuff. Why not continue to grow your book. Why not put some technology around this stuff to start to track it. I bet.
[00:20:55.43] I don't know. I'm just going to throw this out there. I bet 80% of the agencies that are listening to this right now, aren't tracking conversion ratios.
[00:21:04.22] CHIP BACCIOCCO: Oh, for sure.
[00:21:05.03] REID HOLZWORTH: You know, like they--
[00:21:06.87] CHIP BACCIOCCO: They don't know that. Well, and another one they don't know is they don't know their cost to acquire the next customer.
[00:21:12.80] REID HOLZWORTH: Acquisition cost.
[00:21:13.49] CHIP BACCIOCCO: They don't know their acquisition cost. They don't know. They don't know a lot of things. And I and I'm not going to beat up on it too much because I think it's-- you could try to calculate it and then somebody else could kind of look over your shoulder and say, you forgot to include that, and you forgot to include that. It's easy to get it wrong. You think you know and you might not really know. But they should. You're right. They should.
[00:21:31.46] REID HOLZWORTH: So like, and it's funny, you know. You want to start doing that? It's cool. You got to start somewhere. Start tracking that. See what your, are the agency owner's conversion ratio is as opposed to one of your new agents that's coming in. Guaranteed, yours is way higher. Why? Teach them that.
[00:21:50.69] Then you start to make more money. And then it's repeatable. I mean, that's what's called predictable revenue. Read the book. Great frickin' book by the way, Predictable Revenue. That's how you really grow this thing. So you say, hey, every new agent has this conversion ratio. Our customer acquisition cost is x amount.
[00:22:08.90] Our lifetime value is x amount. Hey, we bring in a person. It costs us x amount of dollars. They produce x amount which equals x amount. When they get to this level, they're now bringing in another one and another one and another one. And that's how you grow.
[00:22:22.23] CHIP BACCIOCCO: You're thinking of scale. You know, you're thinking of scale--
[00:22:24.44] REID HOLZWORTH: I'm thinking of scale, but that's how my brain works.
[00:22:26.02] CHIP BACCIOCCO: And you're thinking of it as a math formula. And I remember actually another thing I learned at some point in my career was that sales was not just an art form. I think when I was early on, I thought sales is an art form. You just have to have the gift of communication and persuasion and then later on, I'm like, no, no, no.
[00:22:46.04] It's actually math. It's just, you have to know which conversations to get yourself into, how frequently. Make enough of them Yeah and let the math play out.
[00:22:54.20] REID HOLZWORTH: The reason why those guys had a 60% plus conversion ratio, or 56% conversion ratio was because they brought in the leads that fit them perfectly. They knew exactly what they were good at, where the sources were, the scripts to put on that, the whole nine.
[00:23:15.65] They had dialed it in. They didn't start there. They didn't wake up one day and hey, we're the best at this. They started at crap like everybody else. But then they use technology to monitor what the people were doing and the data to tell them and give them insights about hey, we should grab from over here because, once again, our conversion ratios are better there.
[00:23:33.96] People don't even track lead sources, man. Like that's the simplest thing, just start tracking lead sources. Where are our leads coming in? Oh, hey, how did you hear about us?
[00:23:43.28] CHIP BACCIOCCO: They have to-- it is simple, but-- so that's an interesting one. How did you hear about us? So a lot of times now, people will just say, the internet. Well, that's not enough. Which path on the internet? You got to kind of figure out, well did you did you end up on our agency website? Did you find up on our Facebook page? Did you find just through TrustedChoice.com
[00:24:00.92] Did some insurance-- maybe you landed on an insurance company page and they had an agent locator and you came that way. So I know that's a lot to torture people with, but and maybe I'm not even advising that they do torture them when they get them on the phone, that bad. But try to find a little bit out and try to find out again, mathematically, where are they coming from? Because then you're right, you can reinvest in those segments.
[00:24:25.20] The scalability, too many agencies just they kind of grew up thinking, it is a good attitude to have, that we're here to help people. So they start on service. And how many agencies have you heard say, when they say, what makes you special? Service. We have the best service. They all have the best service.
[00:24:43.62] But it reflects their own attitude that they-- and it's a good attitude, that they're there to serve. Right. That's my job. I help people with insurance. But if that's all you ever think about is just helping, helping, helping, and you never think about the math of your business and how to scale.
[00:24:57.00] Like you said, you have it down to like a formula. If I can do this and if I can make a margin, all I have to do is then just hit repeat. Hit repeat. Hit repeat. Hit repeat.
[00:25:05.73] REID HOLZWORTH: And easier said than done. You've got to have the right people and all of that. But you start to build that muscle. You know what to look for over time. But it's actually not that complicated. I think in our industry, it's tough because like you said, we're helpers. And we help people. And we really feel for our customers. At least I do. But you have to remember we're running a frickin' business man.
[00:25:28.53] CHIP BACCIOCCO: Yeah, we are.
[00:25:29.34] REID HOLZWORTH: If you're running a business and what does a business do? It drives revenue, drives profit. Right. And what does that do? And people, like they're like scared to talk about that stuff. No. That's how you impact other people. Because if you're driving a business that's profitable, you can hire more people.
[00:25:44.79] And guess what, if you're super profitable, give the money away. Charity. Do things. Impact others. But hey, just by your business making money and you spending money on shit, that drives the economy. It's good. So do that. And do that the best you can.
[00:26:00.60] But just by you saying, no, I don't want to do that. Or I don't have time for that, or this, that and the other, OK. I get it. You want to sail into retirement. Yeah. That's like Rich Dad, Poor Dad shit. That's working in the business, not on the business. Those are good books. When you're older, kinda funny. I heard you read that shit back in the day.
[00:26:19.74] But it is. It is that, right. It's working in the business, not on the business, you know. I have a friend, really good friend of mine. He owns a motorcycle custom shop here in Milwaukee. It's called Moto-fied. Awesome guys, good friend of mine. And like I've helped him with his business.
[00:26:34.29] And it's funny, because he's an artist. The guy is a freakin' artist, man, like he really is. But he has so much customer, so much work coming in all the time he can't handle it. And it's simple stuff like that. It's like dude, you need to step back and start to look at what's profitable.
[00:26:49.32] I know you want to help everybody, but you can't. Take a step back and start to look at what's coming in. You can't do a tire change for $20 anymore. Yep, like hey, my minimum ticket is $250 because I'm so busy. You know, I'm sorry. I'll do tires and do all kinds of other custom cool shit if you want that.
[00:27:07.86] But it's like, it's that kind of mindset. And it's so hard when you're in the business, you started it from nothing, and you're just scrappy, just grinding as an agent. And then you hire the CSRs and now they're helping you and this. And it's like, stepping out of that and going, what is going to drive profitability?
[00:27:25.68] CHIP BACCIOCCO: So Pat Gallagher had another thing that he said and this was one of those, again, early career lessons, that at the time, I don't think I knew what the hell he was talking about. But it has resonated over the years. And he said, "Nothing happens until a sale is made." And I would go, I don't-- of course a lot happens. To me, that didn't make any sense. What do you mean, nothing happens until a sale is made.
[00:27:45.03] What he meant was if there's not a sale at the end, the sale was the goal, that was the purpose. There's no reason to put a whole lot of work into an account in terms of how are we going to service it. Don't get all focused on servicing accounts. Figure out how we're going to win a client.
[00:28:02.43] After we've won a client, then we'll help the hell out of them. But make sure we've won a client. And I think this is also lends itself a little bit to the insurtech space. Because if I do have some advice for our insurtech friends, it's-- and whenever you're about to build technology, so in the technology business, we have all this fixed costs that we have to put into every damn product.
[00:28:21.87] And so we're going to build this platform. We're going to build this. We're going to write all this code. And I've often had some pushback from people that work for me or that I've worked with and I've even been guilty earlier in my career saying, well, we're going to build this product. And then we're going to sell it.
[00:28:38.25] And I think over as I've gotten older, I go, no, no, no, no, no. Let's sell it first. Meaning, let's find out that we have a paying customer that wants to buy this. Let's make sure that's absolutely solid. If possible, we can even get a check, which by the way, that's what Henry Ford did.
[00:28:56.49] He actually sold his cars before he ever built them because he sold them to dealers. He would go out to dealers all over the Midwest. He started there and he said, hey, I'm going to I'm going to send you 20 cars next spring. Here's what it's going to look like. I need a check. So you'll be the first dealer in town to get them.
[00:29:12.39] OK, here's a check Mr Ford. And he would use that check to go finance actually building the cars. They didn't exist. And some degrees, we have to do that too. If I was today going to start another brand new insurtech company, and you've done a couple.
[00:29:26.49] You want to know for sure, not just, I feel it in my bones. This is going to be a great product. And agents are going to want it. Insurance companies to love it, right. OK, that's great. It's good to have that in your bones. But it's a lot better to have, this company is going to buy it and they're going to pay x. And this company is going to buy, and I've got letters of intent or handshakes or something, to know that you have customers lined up. Then as soon as you do, then go back and build it.
[00:29:51.99] REID HOLZWORTH: The other thing too, I talked to so many guys in the industry startups, and they're like, I have this big blah, blah, blah, all this stuff. And that's great. Get somebody to buy it like you said. That is a big leap.
[00:30:04.86] CHIP BACCIOCCO: Big leap.
[00:30:05.58] REID HOLZWORTH: Big leap.
[00:30:06.27] CHIP BACCIOCCO: So you might as well do it first.
[00:30:07.47] REID HOLZWORTH: Yeah, you know. I mean, get them to buy it. And then it's funny, because then you get these guys that are smart. Like I've talked to a few of them recently. And they're like, I have all these-- they are ready to buy this thing. Like you said, letters of intent. Like some of them have even funded me and helped me like they really believe in what I'm doing.
[00:30:25.56] That's something. That's something, because you're so right. And it's funny because so many companies in technology, not even in our industry, but just technology in general, they go out, they build this thing and it never takes off, because they never sell it.
[00:30:39.03] CHIP BACCIOCCO: They never sell it. So let's give credit to Pat Gallagher. I'll give you the quote again, "Nothing happens." He said it this way, and it confused me. "Nothing happens until a sale is made." And that's what he meant. The rest, don't build anything. Sell it first. Then invest your world, invest your life in it. Pour yourself into it. But don't just pour yourself into something and have no customer.
[00:30:59.55] REID HOLZWORTH: That's every business, and it's as a small business. And I've talked about this before. They call it like the entrepreneurial stage where everybody like, they love it. And it is fun. I can pick my logo. And I do this. And I spend all this time building the systems and doing this and blah, blah, blah, blah, blah.
[00:31:16.93] You know, I've worked at those guys in the past. And I'm like, we wouldn't sell them, our system. I'd be like sorry, dude, can't sell it to you. He's like, what do you mean? I'm like just not going to do it. Right now you need to go out and close some frickin' deals. You know, but go close some deals.
[00:31:32.55] Here's the reality, selfishly you know, what happens there is we spend a ton of time with these guys and they go belly up in a year. And it just doesn't work. You know what's funny is many years ago I was looking at HubSpot actually for marketing automation. And I remember the sales guy, I was like, I always mess with sales guys. I always like try to dig in like, why are you asking me that? Why is that, the mechanics of it all.
[00:31:57.39] And he said, we won't sell this to you unless you have a dedicated admin. And I'm like, really? You're not going to sell me this shit. And he's like, he's like, nah, we won't do it, can't do it. And I'm like why? I'm like, why is that, like give me the real deal? And he said, well, because first and foremost, I get comped on here too.
[00:32:16.92] And you know, and if you're not going to stick around, you know. And he's like, if you don't have a dedicated person, because we found this thing, it's ugly, it's hard, it's a lot to do. And a lot of people just want to buy it. And they have the thing. And they tell everybody they have the thing, but they never actually implement it and use it. And then two years from now, I don't get paid my commission but I want to get paid. You know, so he's like, I'm not going to sell it to you until you have a dedicated admin.
[00:32:40.02] And that's so true in technology. And so that's part of it is a lot of people get caught up in building the best, nicest thing. It's like building the most awesome race car and putting tons of money into it and never learning how to drive. I crush guys with expensive cars in these old cars, crush them, because they don't know how to drive.
[00:33:04.07] CHIP BACCIOCCO: They don't know how to drive.
[00:33:04.62] REID HOLZWORTH: I raced a fricking McLaren not that long ago in my GT350 Shelby 2018. That McLaren will crush that car, like hands down. Crushed them, crushed them. You know, and it was off-- the guy was super cool about it. Like he wasn't mad about it. But the reality is, that's the same thing.
[00:33:22.59] You can buy it, build it, do all this stuff, but you really need to learn how to drive. And your point here is you've got to sell shit.
[00:33:30.63] CHIP BACCIOCCO: You've got to sell shit.
[00:33:31.41] REID HOLZWORTH: That's how it works. We're running business.
[00:33:32.85] CHIP BACCIOCCO: Running business, a business needs customers, make sure you have customers.
[00:33:35.70] REID HOLZWORTH: If they build it, they will not come.
[00:33:37.41] CHIP BACCIOCCO: That's true. And I know that's the romantic thing, I've got this idea, and I'm going to write this software and it's going to be great. No, don't be romantic. Don't be romantic.
[00:33:46.44] REID HOLZWORTH: No, I will say though, to be fair, there's a lot of people that have pedigree. Like I have friends in this world that have done it. They've built companies. They know it. They have huge networks. It's a little bit different. When they build it, they will come.
[00:34:04.53] CHIP BACCIOCCO: They will. The most famous example maybe is Steve Jobs. I mean, he would make products that everybody would go, that's dumb. No one's going to buy. And he'd go, just I'm not taking any input. I know exactly what it should do. I know exactly what it should look like. I know you think it looks alien, it's going to be fine.
[00:34:21.27] They kicked him out of his own company because he was-- can't design anything. There are a few that have that gift. But for most people, when you're risking your career, your capital, your friendship, whatever it is, why not sell it first? And I just-- that's been my advice for a while. Sell it first. I don't want to say sell it, just share the idea, make sure people, don't do it unethically, you know you're not like you're selling things that don't exist.
[00:34:47.07] This is what we're going to build. This is what it's going to do. This is what's going to do for you. Here's what I need from you. And if they're there then and they write, if you build a chip, I will buy it and put it in writing or something. Like I said, give them a check. You can get a discount now. Pay now. This is your coupon. You can buy it later, you'll be first in line. But I need to check. Then go build it. You're doing everybody a favor. Do it that.
[00:35:10.50] REID HOLZWORTH: I think it depends. Sometimes you got to build a little bit to well--
[00:35:13.14] CHIP BACCIOCCO: You got to build enough to-- you got to proof a concept, nothing wrong with that.
[00:35:17.07] REID HOLZWORTH: But it's the it's the gold plating. That's why they say, like developers should never be a CEO or run a software.
[00:35:23.91] CHIP BACCIOCCO: That's where I was really going, right. I talk to my software developers and they're all such purists. They're idealists. And we're going to build this thing. And it's going to be better than the pyramids. And I just look, I go huh. And I was that guy. I remember, I was a young idealist. I was.
[00:35:40.20] And there's people out there that are listening that know, oh my god, Chip, you were the guilty guy. You always had this vision. You were going to build this thing and then everyone would buy it. So I've learned the hard way. It's great to have a vision. You got to have a vision. But make sure you have a customer before you build the entire damn thing.
[00:35:58.83] REID HOLZWORTH: It's [INAUDIBLE] right? I mean, you can build as you go. And that's the thing. When you sell something and somebody puts down some hard-earned cash on something, they're going to help mold that into what makes sense for business. 100%.
[00:36:12.64] CHIP BACCIOCCO: So on that frame, right I would probably need to talk about agents a little bit. So if you're selling a product to independent insurance agents, which many of our friends are, and I guess I am too.
[00:36:26.41] REID HOLZWORTH: Yeah, sure.
[00:36:27.53] CHIP BACCIOCCO: Absolutely. You have to understand, and most of us do, if you've met one independent agent, you've met one independent agent. I mean you just can't-- I wish we could generalize. I mean, you can for some things. They are challenged to answer the phone and so forth.
[00:36:42.71] They all are unique, and that's their strength. Their strength is their diversity of skill sets and talents and location and size and experience and appointments and a million other things. So their diversity in that way is their strength. But it's also the challenge when you're trying to sell a product to them and trying to get them to use that product.
[00:37:02.03] And you really have to be prepared for the fact that they are-- I don't know. All the agency managements, and you ran one. You ran a great one. And every agency wants to use your tool a little bit differently, didn't they?
[00:37:17.22] REID HOLZWORTH: Oh. 100%.
[00:37:19.02] CHIP BACCIOCCO: You built one tool.
[00:37:20.64] REID HOLZWORTH: You know what, I'll tell you. You know what's funny about that, though, Chip is [INAUDIBLE]. So it's funny because we would sell, this is all on Salesforce, those that don't know. And it's all like-- we built it native to Salesforce so they could declaratively build whatever the hell they want.
[00:37:33.15] We always sell this thing, sky's the limit, build whatever you want. We sold a shit ton of agencies because of that. But I'll tell you, man, they all did it different. And everybody does everything different. But I'll tell you, probably 90% of our customers used it as it is.
[00:37:48.33] CHIP BACCIOCCO: And survived.
[00:37:48.99] REID HOLZWORTH: And survived. And they did, they did well. Like they changed a little couple of little small things. But they weren't doing like, I don't know, like I'll just name a few, like what [INAUDIBLE] was, or the name of cover that were like our customers, all these crazy [INAUDIBLE], all kinds of shit, right.
[00:38:04.44] Generally speaking, they kinda did some little stuff to make it kind of custom to them and that was all they needed. But they love the idea of technically being able to do whatever they want. But you're right in that they do. Their businesses are all different. They are. Technology is kind of the same.
[00:38:21.57] CHIP BACCIOCCO: Kind of the same. And they want to think that because their business is different, they want to bend your product and there's some happy balance. Because remember the other thing that I would remind the insurance agencies and the insurtechs is that I'll go back to that quote I said earlier in our conversation, "The silicone is easy, carbon is hard."
[00:38:42.96] So it's actually the change management within the agency. This is a brand new tool. Brand new tool, here's a brand new tool here. The agency owner says, we're going to use this tool. It's going to be great. We're going to be able to finally track our acquisition costs, whatever it is.
[00:38:56.19] Oh, he's all excited, and all the people are like, I didn't used to have to click on this stupid thing. I didn't use to have to do this. I didn't use to have to type in here. And so they're all finding little ways to undermine your thing. They don't mean to be counterproductive. They're not like waking up in the morning, I'm going to undermine my boss.
[00:39:19.78] But it's just their natural, this goes back to what we were talking about too. Humans are awesome at adapting, and the only thing they hate to do-- nothing they hate to do more than change. So it's that yin and that yang that we just have to deal with. But so when you're building a product for agencies and you would know this better than me, be prepared that everyone's going to want to use it a little differently, so be flexible as the vendor, but to your point, don't be too flexible so you end up with 17 different implementations you can't support.
[00:39:48.49] REID HOLZWORTH: Oh 100%, right.
[00:39:49.18] CHIP BACCIOCCO: And there's no user, you couldn't have a user group meeting and no one would agree on how the thing worked. That would be terrible.
[00:39:54.91] REID HOLZWORTH: And I mean, I'll say something to that too. This is like advice on technology, one version. Everybody's on the same version. You can't do different versions for different people. That is bad news. That will bite you. But you're right, it can't be so complex where you have all these different templates and all these things because to support that, train that, implement that, it's a nightmare.
[00:40:15.31] CHIP BACCIOCCO: And they can't even teach each other, because the other thing you want is you want a little cross-pollination of ideas and best practices. So among those agents, we have all these thousands of agencies. I really like the idea of several different people lately have tried to come up with these ideas. Let's let agents talk to each other about what works and what doesn't work. And I that's a really great thing because then they can start sharing.
[00:40:34.94] But if everybody's doing everything totally differently, than there is no way to share. You have to share how to use three or four solutions well. And then for agency owners, I would just say, if you're going to buy an insurtech product, my best advice is realize that your change management, changing behavior will actually be the biggest challenge.
[00:40:53.23] The tool is not going to be the hard part. It does what it does. Rely on a good technology partner to deliver you a good product and tell you what it does and how to do it. But it's going to be incentivizing your team.
[00:41:05.64] REID HOLZWORTH: Well, that's a good point. I was just thinking about that. I saw agencies that adopted extremely well. And what they did was when they bought a new product, they really like incentivized their team to use it. And they did like all these games. They put like parties around it. And they made it so much fun and like the whole team, I mean, they just loved it because of that.
[00:41:23.41] Not just the owners or the people that bought the software from us, but the agency itself. I mean, they just-- they all adopted it that well because of that. But you're right it's kind of the naysayers and the change management. I've had the opposite where literally, I mean, I've had agency owners call me and just say, this isn't working blah, blah, blah, blah, blah.
[00:41:45.74] Why isn't it? Oh, the staff hates it. They don't want to use it. You know, and it's like, well, did you do this? Did you do this? No. Mary just said no. You know, Jeff said no. You know and it's just like, I'm like--
[00:41:55.96] CHIP BACCIOCCO: And Mary's been there for 25 years. And Mary knows where everything is and we can't upset Mary and that's a universal truth.
[00:42:04.85] REID HOLZWORTH: And I literally said to a guy one time, this is no bullshit, I said, well, I can tell who is wearing the pants in that agency. He got mad at me about it, but it's like, I'm not wrong, you know.
[00:42:17.74] CHIP BACCIOCCO: And Mary could be named Steve. It's not about-- there's always a person that has a lot of tenure, that has a lot of indirect clout in the office. And if they aren't on board, if you haven't incentivized them to get out of the way, you've got a big problem.
[00:42:34.06] REID HOLZWORTH: Yeah. Let's get off this. Let's get off the agency adoption topic. We beat this thing to death.
[00:42:39.73] CHIP BACCIOCCO: We have.
[00:42:40.18] REID HOLZWORTH: Look, agents adopt a solution.
[00:42:43.04] CHIP BACCIOCCO: Please.
[00:42:43.48] REID HOLZWORTH: Just do it, you know or don't buy it. That's it. It's that simple.
[00:42:49.04] CHIP BACCIOCCO: And be prepared to get your people to embrace it. And you'll have to win them over.
[00:42:53.83] REID HOLZWORTH: Yes, they are going to push back and you may not even see it because it's a new thing. And some people are scared for a number of reasons, job security, whatever it may be. It's just a new thing they have to learn and they're already stressed.
[00:43:06.46] Every day they end up with an extra 500 activities in their agency management system or whatever it is they've got to get through that. And so it's tough. It's really tough. But if you're going to do it, you've got to do it. And then incent the team to love it. It'll make all of our lives easier.
[00:43:24.31] Agencies, generally speaking, really do like technology. And they do really want technology to help their business. There are so many though agents that come up with the next bell and whistle that's going to revolutionize the industry. And it does make sense. And there's things that need to be solved in this industry.
[00:43:49.21] But going back to your point, outside of you using it, who's going to buy it? And I'll say this too, being that guy and being in that world, it's tough to have an agency and a technology company as well. You need to pick one. You get to branch off.
[00:44:07.51] And it doesn't work very well in my experience, and I've seen a lot of companies that have done this, it doesn't work well when you have both. And so you need to step out.
[00:44:17.26] CHIP BACCIOCCO: And we know some guys that have-- we do.
[00:44:19.57] REID HOLZWORTH: Oh yeah, we do. And it hasn't gone well. It doesn't.
[00:44:22.96] CHIP BACCIOCCO: Well, you got to pick one as you said. I mean, one can go well if you pick one. And there's nothing wrong with morphing, Zywave Foundation, they won't mind me saying at all, came from an agency. And it was an agency. And Bill Hack ran that agency and they created some internal software tools that they realized every employee benefits brokers should have.
[00:44:43.99] But that transition when they were doing the juggle, they were-- both were suffering a little bit right because they weren't focused on either being a really good agent or being a really good software provider. And so they had to make the full transition.
[00:44:57.26] And obviously today, Zywave is a full technology company. But there were days when they weren't. And to your point, I won't name any more current organizations, but they struggle with it. It's really tough, and you really have to step away and focus on one or the other.
[00:45:12.80] REID HOLZWORTH: Which means you have to give up something you love. They got into both because they were either good at it or loved it or had some passion for it. And so I don't know, that would be hard for me too.
[00:45:23.17] CHIP BACCIOCCO: And I mean, it is successful if you pick. I'll just name one, like [INAUDIBLE] and he was at his dad's agency. Boom. He's like, I'm going to build this thing because it's better because we suck at this and I think this tool is going to be good. And they're like, OK, but then go do that. Don't do both.
[00:45:39.88] I'll mention another one if we can. Peter MacDonald at Wunderite.
[00:45:43.48] REID HOLZWORTH: There you go, same thing.
[00:45:44.86] CHIP BACCIOCCO: Family Agency, he pulled-- he had an interesting idea, but separate, went on his own way. He's committed to one.
[00:45:52.24] REID HOLZWORTH: Peter's a good dude. I like Peter. Yeah so anyways, fun stuff. So Chip, advice, back to the listeners. What would you change in this industry if you could change one thing?
[00:46:03.76] CHIP BACCIOCCO: If I could change one thing.
[00:46:05.29] REID HOLZWORTH: How about in technology, I don't know. That's pretty broad.
[00:46:08.53] CHIP BACCIOCCO: I mentioned before that for the IA channel. I'm going to stay in the AI channel for a minute. When we solve this producer availability challenge, that's going to be huge. So that's my personal mission that I can most influence is to help get opportunities to independent agents that will talk to a customer right now.
[00:46:28.39] We have this huge network of agents. We know what they do. We know where they are. And if we can come up with the right notification systems and kind of borrow from Uber, we will solve that problem. From a technology standpoint, and you and I have talked about this before, but I still think it comes down to integration.
[00:46:46.18] I still think-- and I think we're on the cusp by the way. I think we are headed into a time where, this is me, and you work for one of these companies. So I'm going to, but I think you work on the-- I think you're on the side of integration. I think you are.
[00:47:01.63] REID HOLZWORTH: That is our business.
[00:47:03.16] CHIP BACCIOCCO: And I think once everybody embraces the idea that all the major systems have to have, I'm going to call it an open API, a secure open API. And of course, they are businesses, they can charge for access to that API. But once everybody embraces that, and it really becomes possible that all these systems can talk to each other relatively easily. It's not a fortune to connect this system to that system and so forth.
[00:47:27.40] Then we'll start to see best practices around how do you wire these together, which combination of solutions really produce great results. I think we're on the cusp. I've already told people when I've had presentations, I'll say we're entering this era of-- we've been in an era of integration, much more rapid in the last two or three years than it was six or seven years ago. And I think the next two years will be definitive. And I really think we'll go over the tipping point.
[00:47:52.75] And I want to encourage all of the agency management system providers, especially, not just them, though. But get away, please abandon, and I have to do the same. We've all had ambitions of this monolithic solution stack. and
[00:48:07.78] REID HOLZWORTH: That's not a thing.
[00:48:08.84] CHIP BACCIOCCO: It's not a thing. It's not going to be a thing.
[00:48:10.38] REID HOLZWORTH: It's too much. There's too many components.
[00:48:12.01] CHIP BACCIOCCO: Too many components. We are too diverse of an industry as we've talked about before. Too many things need to happen. The strength of the IA channel is all these different business specializations that we have. And the only way to empower that is to let innovators figure out how.
[00:48:25.99] So I think of it as a patchwork of LEGOs. This is an old analogy I've used. And you got to let the agency or insurance company assemble the right LEGOs for them, but those LEGOs have to snap together. We can't just all be out there building hand-carved solutions out of a single piece of wood.
[00:48:43.91] REID HOLZWORTH: That's the issue. I think you're right, though. I think we're of at the tipping point there. You know, and I've been in those conversations, multiple conversations around kind of that monolith thing. And the big systems out there have now realized, like there's no way. Like it's not-- focus on the things they're good at.
[00:49:01.96] Acquire things that make sense to bolt on as they become successful, but let everything connect. Because ultimately, that's what in this case and this agency kind of technology and insurance technology in our world, especially connected to the distribution, that's what the distribution agents are calling for.
[00:49:20.74] Yeah, everybody knows that. They're doing it. I think it's at a tipping point because the bigs that are out there, and I know this because I'm part of this is they've been held back by the technology itself. People don't realize that. They think it's because they want to hold it. And at one point it was. They didn't want to open it up for competitive reasons. But that was many, many years ago.
[00:49:42.01] Now when you have their top, call it top 50 customers that equal 90% of their revenue or whatever it is that are screaming for this type of stuff, they're doing--
[00:49:53.41] CHIP BACCIOCCO: I know. And I know it's knotty. I know that behind the scenes, it's easy. For those don't know, and it's your podcast. So they know, you're on the executive committee at Applied. You're right there. This is something you guys talk about at least once a month.
[00:50:09.40] And it's one thing to say, well, great, we'll have this single. But then you realize, wait, right behind that or two layers behind that it gets really complicated. Like how do you get this system and that system? Technically this data model is a little different than that data model. And there's no easy way to get. I get it. I get it. I do. So be honest about that. You don't want to say, don't look in the back room, it's messy back there.
[00:50:33.16] REID HOLZWORTH: It is. And that's everybody.
[00:50:34.68] CHIP BACCIOCCO: It is. It absolutely is everybody. It is absolutely everybody.
[00:50:37.64] REID HOLZWORTH: These systems have been around a long time. And then when you bring it all the acquisitions over the years and all of that stuff that's connected, I mean, different code base. It is complicated.
[00:50:48.07] CHIP BACCIOCCO: It is complicated. And it is messy. But you're right, the language, and maybe that's what I'm seeing. I'm seeing there's a lot of very positive language, the simpler systems. It's easier for them, so I'm not going to mention names either. But there's some agency management systems that for whom it's easier and for whom they've opened it up.
[00:51:05.80] So as long as Applied and Vertafore, let's use the two big dogs in the room, Zywave, I guess, might be starting to be the third. If you guys-- I would love to see it.
[00:51:15.40] REID HOLZWORTH: It is kind of like a radio right now.
[00:51:17.23] CHIP BACCIOCCO: Yeah, it is like radio. It's like ooh, ooh, like oh it is. We even have a microphone between us, it feels like radio.
[00:51:23.68] REID HOLZWORTH: It's fun. [INAUDIBLE] is just coming out.
[00:51:26.08] CHIP BACCIOCCO: Yeah, right, exactly, like you don't know what's next. So we sorta do it by the seat of our pants and everything. But it's great. We're going to-- 100 years from now, insurance is going to be boring. No, not true. I'm sure it'll be fine. It's really great. It's very interesting right now.
[00:51:44.59] REID HOLZWORTH: All right, two more questions.
[00:51:46.18] CHIP BACCIOCCO: You bet.
[00:51:46.57] REID HOLZWORTH: Question one, who do you think I should bring on the show? Who would be good for me to interview?
[00:51:50.54] CHIP BACCIOCCO: I mean, you know so many great people. So I don't know who you've had on here, Reid, but we mentioned Peter MacDonald before. I think if you haven't had him on, I would do him. Jason Walker, have you ever interviewed Jason Walker.
[00:52:03.67] REID HOLZWORTH: Oh, yeah, I know Jason.
[00:52:05.23] CHIP BACCIOCCO: Smart Harbor.
[00:52:06.13] REID HOLZWORTH: I have not. I know Jason well.
[00:52:07.09] CHIP BACCIOCCO: And now with Agency Revolution, I'm a big fan of Jason's.
[00:52:12.88] REID HOLZWORTH: He just started the company. Now he's doing like basically consulting for agencies on technology.
[00:52:18.82] CHIP BACCIOCCO: Well, he was and even newer than that, he started. It was called Agency InsurTech I believe.
[00:52:24.13] REID HOLZWORTH: Yeah, that's what it was.
[00:52:25.18] CHIP BACCIOCCO: But then he-- almost immediately, one of his clients pulled him in. So now he's effectively running Agency Revolution which used to be run by years ago by Michael Jans, and I think he's going to transform that organization. I think he would be a good guest.
[00:52:41.83] REID HOLZWORTH: Smart Harbor, a lot of people don't realize that Ilya was involved in that.
[00:52:44.97] CHIP BACCIOCCO: 100%.
[00:52:45.88] REID HOLZWORTH: I remember that.
[00:52:46.57] CHIP BACCIOCCO: We all-- there's a circle. We were just in a meeting in Alexandria last week, and we were talking about that summit that we had at your office and my office back in 2017. Do you remember that? We were all whiteboarding together. Yeah, Ilya was there. That's when you said Ilya, I remember that. Ilya was there. The guy that reminded me was an agent from Ohio named Matt Simon. And he was there that day, and I ran into him last week, and he's like, remember that day.
[00:53:12.67] REID HOLZWORTH: That was funny.
[00:53:13.03] CHIP BACCIOCCO: Yeah, I mean everybody was there. The Ask Kodiak guys were there. Seth Zarembo was there.
[00:53:18.40] REID HOLZWORTH: Salesforce was there.
[00:53:19.33] CHIP BACCIOCCO: Salesforce was there. They just showed up.
[00:53:22.48] REID HOLZWORTH: Yeah, they totally did.
[00:53:24.71] CHIP BACCIOCCO: It was one of those funny, funny days. But anyway, who should you have? Those two for sure. Those are the two names that pop into my head off the top of my list. Michael Lebor. Michael's got a lot of interesting ideas, InsuranceGiG, I think. I don't know if his-- I think he's got-- I don't want to say his half.
[00:53:49.16] He's going to figure it out. It's one of those companies that's got an interesting core idea, and they're going to figure out how to get where they want to go. But it's about integration, and again that's one of those topics that I think is really timely.
[00:54:00.39] REID HOLZWORTH: That's his whole business.
[00:54:02.82] CHIP BACCIOCCO: So and he's a character. And you get a free hat. He sent me a hat.
[00:54:06.86] REID HOLZWORTH: I already have one.
[00:54:07.52] CHIP BACCIOCCO: Oh, yeah, you have a hat.
[00:54:08.30] REID HOLZWORTH: [INAUDIBLE] don't need more.
[00:54:09.29] CHIP BACCIOCCO: Good. Yeah.
[00:54:10.37] REID HOLZWORTH: He's a good friend.
[00:54:11.12] CHIP BACCIOCCO: He's a good guy. Bill Devine, have you had him?
[00:54:14.40] REID HOLZWORTH: I haven't had Bill. Bill is a good guy. He's really promoting the IA channel. And like you said, I mean, they're vested in [INAUDIBLE]. I actually know for a fact, a couple of carriers right now that are the opposite of that, pushing back because they want to continue to hold their position of everybody going to their portal. And so yeah, Bill has done.
[00:54:32.84] CHIP BACCIOCCO: Bill's done, yeah he has. And he's a real innovator. And he kind of sees I think well over the horizon. He'll give you that, where's the industry going to be in three or four years.
[00:54:42.41] REID HOLZWORTH: All right, last question Chip, what do you like to drink? Favorite drink? What do you like?
[00:54:47.31] CHIP BACCIOCCO: I just got back from Napa, which I had never done a multi-day trip to Napa in my life. I've been there for one day, you know, you're in San Francisco for business and somebody says, hey, we have the whole afternoon, let's drive over to Napa. It was our first multi-day.
[00:55:01.19] So if you ask my wife and what we spend money on, she will tell you that Cabernet is apparently my favorite drink. But that's not really true. It's just where some of the money goes. But actually a martini.
[00:55:16.88] REID HOLZWORTH: Oh, nice.
[00:55:17.93] CHIP BACCIOCCO: Again, back to my roots in the insurance industry, back when we actually had real martini lunches, like that actually was a real thing. I've never gotten over the glamour of a good vodka martini with two blue cheese olives. There's nothing better in the world. Now you can only have one or two and then you're, time to go to bed.
[00:55:38.33] REID HOLZWORTH: Like a lot of things, I'd say overall, that's my drink of choice.
[00:55:41.12] CHIP BACCIOCCO: Oh, OK, I didn't know that.
[00:55:42.20] REID HOLZWORTH: I'm a gin guy though.
[00:55:43.34] CHIP BACCIOCCO: I'm a vodka guy.
[00:55:44.15] REID HOLZWORTH: I like gin dirty, up blue cheese olives. You know, I've got to like blue cheese actually recently now, it's more just regular. I love a good martini.
[00:55:52.28] CHIP BACCIOCCO: We should have some sometime.
[00:55:53.84] REID HOLZWORTH: Chip, thank you for all the listeners out there. You see Chip out and about, buy Chip a martini. Buy him four martinis and see what happens though, fun night.
[00:56:02.93] CHIP BACCIOCCO: I would enjoy that.
[00:56:04.49] REID HOLZWORTH: Chip, thank you for joining, always a pleasure. And thank you for everything you're doing for the industry. You've done a lot. What a great career, man. You've done some really cool shit and continue to do so. So hey, producers out there, your availability sucks.
[00:56:18.65] CHIP BACCIOCCO: We're going to fix it. Sign up for Claim It. We're going to fix it. Thanks, Reid, I appreciate it. Great to be here.
[00:56:25.31] REID HOLZWORTH: Yeah, Thank you. Chip Bacciocco is an awesome guy, awesome friend, awesome family man, just good dude all together. He's one of those guys, that although I don't hang out with Chip all the time, he's not one of my best friends, but he's a good friend. I know that Chip would answer the phone and he would help, 100%, and drop what he's doing.
[00:56:47.56] I know myself to be that person as well. And us, as good people, helping others is what helps this industry. And it helps us, as real industry people, there's a lot of people that are part of this industry that I believe aren't industry people. And I think that the big eye is really investing in insurance technology and helping educate their force and help their force in that way.
[00:57:13.71] With all the stuff they're doing with TrustedChoice.com, with what they're doing with ACT now that Chris Klein has just taken the reins over there. Love Chris, spent a lot of time with Chris over the years. He's at Westfield, a breath of fresh air, really awesome.
[00:57:29.70] With Lou Moran taking the InsurTech Task force. Now the big I doing this InsurTech Summit that we are all just at and met a bunch of really cool people, was on a great panel with some really awesome people within our world, true industry people. Not all of them on the panel, I'm not going to name names, but most of them, but all knew their stuff. Let's say that.
[00:57:54.84] But yeah, really good. So they're really going after it. And they're not going after it because it's like something that the big I should be doing. It's because they really see that it'll help this industry and the brokers. I've spent a lot of time with those guys professionally, unprofessionally I guess you'd say, I don't know.
[00:58:21.00] It's true stuff. So you know, Chip has been in the industry a long, long time, longer than I expected, longer than I knew. And he knows a lot of people in this industry and has developed a really great reputation, all that said. And he's a good person. It was a pleasure to have him on the show.
[00:00:13.39] NARRATOR: This is the Insurance Technology Podcast, where we bring interesting people from across the insurance ecosystem to discuss and debate technology's impact on the industry. Join us each episode for insights and best practices from industry stewards and tomorrow's innovators. Now, here's your host, Reid Holzworth.
[00:00:34.51] REID HOLZWORTH: All right, we're back with Chip Bacciocco from Trusted Choice. In this episode, we're going to get into what Chip coined the producer availability challenge and what he and his team are doing to solve this epic problem. It's really cool stuff. Stay tuned. It's going to be awesome.
[00:00:53.91] CHIP BACCIOCCO: You're exactly right. And we encounter the exact problem that you have described every day. So the challenge, I now call it, the producer availability challenge.
[00:01:05.97] REID HOLZWORTH: The producer availability challenge, I like it.
[00:01:06.99] CHIP BACCIOCCO: Sounds very fancy, academic. Sounds like we researched it.
[00:01:10.83] REID HOLZWORTH: It's very peaceful.
[00:01:11.43] CHIP BACCIOCCO: Sounds like there's math behind it.
[00:01:13.35] REID HOLZWORTH: And they say, you suck at that.
[00:01:14.19] CHIP BACCIOCCO: Well, they do, they suck. So we've had our own site secret shopped, whatever you call that, secret shopper when you have somebody, right. I've even had board members, board members, executives of nice insurance companies that have gone to the site and said Chip, I'll secret shopper it for you. And they put in their real house and their real cars. And they have nice houses and nice cars.
[00:01:34.77] And they hit, Choose a Couple Agents and the same thing as you, nobody fricking called them. How is that possible? Then they'll let me know, usually 48 hours later, I did it. It's been 48 hours. And maybe in the 44th hour, they heard from one guy, right.
[00:01:53.22] We've had employees do it. I've done it. Doesn't matter. Insurance, what they think, mistakenly, is that they have time. And they don't have time. You're exactly right. Right, so I don't know why they think this, by the way, because in the rest of their lives, they expect everything else to be instantaneous.
[00:02:10.59] When they're doing their Christmas shopping this month on Amazon.com and they're like, oh, I'm going to buy my wife a popcorn maker or whatever you're going to do, and they go through and they see all the different choices and they go, I want that one. They would never accept not hearing back from Amazon as to whether their order was placed and when it would be delivered. They wouldn't wait two days for that. Would they?
[00:02:31.54] They'd be like, I pushed the little buy button and nothing happened. Right. And that's what we do to them in the IA channel historically is they push the button on whatever website, it could be an agency website, TrustedChoice.com, choice lots of other places. They push the button and nothing happens.
[00:02:48.87] I mean, maybe they get a little thank you for submitting your thing, we'll be back to you shortly. That's not good enough. They want to know, to your point, they were out-- they had to solve their problem that afternoon. They wanted to place, especially business insurance. They've got other things to do, right. I need to get. I need a certificate of insurance. I need my GL placed today. I'm going to spend two hours on this.
[00:03:06.78] If that agent is not talking to that customer in less than 10, 15 seconds, they go to the next website. And they do it all over again, you've lost them. The first person-- I loved what you said when you said, the first person I talked to-- I've been trying to teach agents for years, because we record all the phone calls to that come through TrustedChoice.com. So I've heard the train wreck conversations and I've heard lots of them, like when they make the person answer the same set of questions three times.
[00:03:34.89] First, they answer them all for the receptionist. Then they go to the next screener, they answer the same questions. They go to the next screener, they're like are you kidding, I told my last name three times now. But whatever. Yeah. It's just a train wreck with all that stuff.
[00:03:48.90] REID HOLZWORTH: By the way, I want to talk about that real quick.
[00:03:50.68] CHIP BACCIOCCO: Sure.
[00:03:50.88] REID HOLZWORTH: Because we did, in our agency we did studies on that. We had super high conversion ratios once we get somebody on the phone. That's the reality. And what we did was, and so like, we had the agency-- my ex-partner and I, we had crazy high conversion ratios. I'm not even going to say it because people aren't going to believe me.
[00:04:05.49] But like, why? Because we knew what questions to ask. Very quickly, we knew what to say and we could quote it real quick for them. Like we we're just experts on that. When we started scaling our agency, we started adding people, their conversion ratios were like shit compared to ours.
[00:04:20.73] Well we pulled the calls. We recorded every call, right. And so we pulled all the calls. And they were doing just that. What happens is that they would get the call, and they would ask them like 10 questions, right. And this is like, it's all different types of things. But like the majority of it was this, they'd ask 10 questions. They'd hang up. They go, OK, let me call you back.
[00:04:41.10] They would call them back again, and they go, oh wait, I forgot to ask you this thing. Oh wait, oh, blah, blah, blah, blah, blah. Hang on, call them back again. Blah, blah, blah, blah, blah. Now by that time, one, somebody's probably already on the phone with them.
[00:04:56.00] And that somebody, you know like some of these guys that I used to work with, and even us in our agency, has pure script, the whole nine-- has actual flow like a wizard where you're asking questions all conditional, oh, do you own a home? Yes. Oh, OK. This address? Oh, yeah. Blah, blah, blah. Ask a couple homeowners' questions, even though they're getting an auto quote, you're still quoting them home insurance at the same time. Stuff like this, they're going through a flow.
[00:05:18.00] Oh, your phone is ringing, oh, don't worry about that. That's just one of my-- I've been in call centers where the guy is like, oh, don't worry about that. That's one of my colleagues calling you right now. Don't even answer. Yeah, seriously. 100%. I've seen people do that shit. These guys are pros.
[00:05:31.68] Anyways, and so what would happen, though, is if you ask the same question, multiple times, or you hang up and call them back to ask them more questions, you lose confidence--
[00:05:44.97] CHIP BACCIOCCO: Oh, 100%.
[00:05:45.81] REID HOLZWORTH: --in that prospect. That prospect is just like, what are we doing here?
[00:05:49.77] CHIP BACCIOCCO: They don't know what they're doing, you know, It's I'm going in circles.
[00:05:51.69] REID HOLZWORTH: Exactly, or like you just said, I just gave that to Jeff. I just gave that to Mary. You know, why am I doing this again? You know, and that's-- and so--
[00:06:02.02] CHIP BACCIOCCO: They still don't know if they're going to get help at the end. So here's my magic tip to any agent that as you said, you've got to sort of stop them in their tracks, the customer and get them to believe that trust factor, trust the Choice, that trust factor that this is going to work out OK. There's going to be some questions, but this is going to work out OK.
[00:06:19.57] And here are the magic words, and I've heard it on the phone. I did not come up with this. I learned it. The customer states what their challenge is and then this is what I want the agents to say, if they can do it, I can help. Just those three-- That's it. I can help.
[00:06:36.17] I've heard the voice of the customer. You can feel the stress come out of them. Now they're prepared to answer questions, because they want to know that if I answer the questions, you're going to help me.
[00:06:46.04] REID HOLZWORTH: That's a great tip.
[00:06:46.43] CHIP BACCIOCCO: We're going to get through this. If I just, all I do is answer a question, it's all one sided. Tell me your name. Tell me this. Tell me-- why, I'm telling you an awful lot of stuff. And then I have to tell it again to the second person. And I still don't know if this has any positive outcome for me.
[00:06:59.90] We could get through all this and you say, go to hell, we can't help you. That's a waste of my time. Tell me now, can you help me or not? And so when I've heard agents go, just, whatever you start, I'm looking for insurance for my two cars. I can help. I can help. Let's walk through it.
[00:07:15.08] REID HOLZWORTH: Oh, 100%.
[00:07:15.71] CHIP BACCIOCCO: Right. I can help. Just say those words.
[00:07:17.81] REID HOLZWORTH: I like that.
[00:07:18.26] CHIP BACCIOCCO: And then do something, and then there's a little process.
[00:07:21.08] REID HOLZWORTH: I think, we used to do-- I don't remember the exact script, but what we used to do too is we'd say, listen, we have x amount of carriers, all the markets out there. We have this huge inventory of products that we can offer you. So I'm just going to collect a bunch of information from you and we're going to help you out. We're going to find what makes the most sense for you.
[00:07:40.10] And it's funny. We won so many deals because of that, like saying that. And the other thing too is they go, oh, I just got a quote from this guy down the street, whatever it was, and it was less money. I said, oh, who was it? And they'd say who the carrier was. And I said, no, it's not that, it's this. And they go, no, it's not, it's cheaper.
[00:07:57.35] I said, you watch. When you go under there, it's fine. You can go ahead and buy it. I'm telling you right now. I'm professional at this, blah, blah, blah, blah, blah. But go ahead. And go quote it. They go down to that office to buy that policy and it would come back to, we were saying, you know, and they would walk out of that office and come back and buy the policy from us.
[00:08:15.17] CHIP BACCIOCCO: I'm told that happens all the time.
[00:08:17.48] REID HOLZWORTH: All the time.
[00:08:18.17] CHIP BACCIOCCO: But getting back to the, I can help. You have to get to the point where you can say that in a timely manner. This is the first part we were talking about. You can't wait a day, then call them back and go, what do you need? Oh, I need help with my house insurance. Oh, I can help.
[00:08:31.73] That won't work because they've already talked to seven people. You missed it. Yeah, so go back to that Amazon.com. This is what I call the producer availability problem. Here's the issue. It's not-- I used to think that the agents were just lazy. They're not. I mean, they are-- there's some that are. That's really-- mostly, they're just busy. They are helping some other damn customer.
[00:08:50.63] REID HOLZWORTH: It's prioritizing them.
[00:08:52.40] CHIP BACCIOCCO: They're literally on the phone with customer 24, and if 25 comes in, they can't drop the phone and be talking to them in five seconds. And I want them talking in five seconds. So or their whatever-- we all live lives. Remember, agencies are relatively small. They have four producers, five producers. How could any one of them be available like as fast as a State Farm giant call center could be? Right? You can't do it.
[00:09:21.09] So that's what I call the producer availability challenge. And it's unique to the IA system which is, we have all these independent agents. And pick any town you want, Cincinnati, Ohio. If you added up all the independent agents as if they all worked for one company, I'm going to make a number up here. There's 500 of them, whatever, that are producers that are qualified to help you with something.
[00:09:39.89] But you can't call one number to get distributed to 500 to see who's available right now. So you have to pick one out of the 15 or 16 agencies. You pick one and maybe, possibly, somebody is ready to talk to you right now, but probably not. Then you have to find the next one, find the next one, find the next one.
[00:09:58.52] So TrustedChoice.com has really figured out that this is the issue, the challenge that we can step in and solve. And we do it through, you've heard me talk about this before, Claim It. So Claim It, I don't know if you remember, is just Uber for insurance agents, meaning, we take in that prospect and we realize, OK, we have a pizza--
[00:10:17.45] I'll switch to commercial lines. We have a pizza shop. I always do barber shop, but I'll do pizza shop.
[00:10:22.13] REID HOLZWORTH: Yeah, there it is. I use barber shop all the time too. You say that.
[00:10:26.15] CHIP BACCIOCCO: Yeah, I know. So I'll use pizza shop. It's the same thing. No chairs. People throwing dough in the air, probably some kind of hazard there I don't know about. Anyway, hot dough. The pizza shop owner is looking for insurance. They come to TrustedChoice.com or anywhere. They come to some part.
[00:10:41.81] If we can capture that pizza shop owner for just a second, just have enough information about them, like, it's a pizza shop. We know the person's name. We know how many years they've been in business, maybe how many employees, and what are they looking for, work comp, general liability, whatever?
[00:10:54.50] That's all we really need. We don't need enough to underwrite the darn thing. Just get enough, oh, it's Joe's Pizza Shop. And then we know at TrustedChoice.com because of that giant network of independent agencies, we know who the agencies are in Cincinnati.
[00:11:07.04] And if they'll tell us, we know a lot, but we'd love to know more about which ones of them love to write pizza shops and have other pizza shops as clients. That's the appetite part. We also know which IA insurance companies have an appetite in Cincinnati to write pizza shops.
[00:11:22.67] We've put all that puzzle together inside of our system. And then we poll 15 or 20 local producers in Cincinnati that we know have appointments with insurance companies that can write a pizza shop and that they themselves, that agency wants to write a pizza shop, and we poll them in real time on their phone and go, we have a pizza shop. Who can help right now? Right now being the most important words. Who can help right now?
[00:11:46.04] Just like Uber, who can take you-- who can take Reid to the airport right now?
[00:11:50.24] REID HOLZWORTH: Yeah, exactly.
[00:11:50.99] CHIP BACCIOCCO: Right. One of them goes, I'll take Reid to the airport and they click their little button and boom, that driver is on his way to you. We do the same thing with insurance producers. So we believe, and we are really seeing some math on this that could solve the independent agency producer availability challenge, that we're going to basically have this giant network of producers all across the country.
[00:12:11.09] When an opportunity comes in, in real time, we will poll and just ask them, who can help this customer right now? And when they push that button, boom. Hopefully, if it's a warm transfer, they push that button, they're in a conversation immediately with that customer.
[00:12:25.40] REID HOLZWORTH: Yeah, that's awesome.
[00:12:26.54] CHIP BACCIOCCO: That's where we got to get to. And that's what we're going to work on. That's our-- we've really made a lot of progress here at the end of 2022. And 2023 is going to be all about building out that claimant capability even further.
[00:12:37.76] REID HOLZWORTH: Unfortunately, I mean, just being real on this, because I could see a lot of people clicking it and going, oh, I'm available and they're really not. And they don't call.
[00:12:45.80] CHIP BACCIOCCO: They have to pay money right then and there, Reid.
[00:12:48.50] REID HOLZWORTH: There we go.
[00:12:49.18] CHIP BACCIOCCO: Skin in the game.
[00:12:49.79] REID HOLZWORTH: Yeah, that's true.
[00:12:50.78] CHIP BACCIOCCO: Skin in the game. So I mean, you can do that if you're just frivolous with $30 at a time or whatever the price is going to be for various leads, but yeah, that's--
[00:13:02.70] REID HOLZWORTH: And then I would also assume that you're going to have to-- you're going to have to do a deal with the National Call Centers in some ways where these local guys, they just don't want it. It just-- it goes to somebody that's going to take it.
[00:13:16.16] CHIP BACCIOCCO: We will.
[00:13:16.73] REID HOLZWORTH: Because what infuriates me about this, and we talked about this before, it really does piss me off, like what happens is when you guys are doing all this marketing. Somebody comes in to TrustedChoice.com. They submit their information to get a quote through an independent agent and nobody calls them. What happens? They go to frickin' a captive.
[00:13:36.35] CHIP BACCIOCCO: They do.
[00:13:36.92] REID HOLZWORTH: They do. And guess what, you'd call, name a captive, not to name names, they're going to answer the phone. And they're going to give you a quote, right then and then.
[00:13:45.77] CHIP BACCIOCCO: That's certainly for personal lines, you bet.
[00:13:47.45] REID HOLZWORTH: Yeah, exactly. Commercial a little bit different. But like, generally speaking, I mean that's what happens. And that's-- all that marketing, everything you guys have done to tell the customer that they should live in the IA channel, boom, now, they're gone.
[00:14:05.74] CHIP BACCIOCCO: I know. And that's a tragedy. I think the good news is we make, at the end of the day, I think everyone needs or wants to know there's some human being that's looking out for them and their insurance needs. Now if you're--
[00:14:19.37] I remember when I was-- we were talking about when we were young and crazy and I was an intern in Chicago and I needed a renter's policy. I didn't even have a renter's policy, and like a non-owned auto kind of thing. It's very little. You could buy that online. You don't really need an agent. I didn't even care to be honest with you. My parents said, you have to have it, so I was just trying to make them happy. Yes, I have a renter's policy.
[00:14:45.86] But once you have a family, once you have property, anything to protect, you have kids, you have a wife, you have a spouse, whatever it is, or you have any kind of business, right. You have even two or three other families that depend on that business to keep going, suddenly, you can't just say to everybody, well, I pushed the button on the website.
[00:15:06.59] I thought I was covered. You want to have somebody. I know Mary. And Mary looked me in the eye and said, you're covered. And you know, right.
[00:15:16.40] REID HOLZWORTH: That's true.
[00:15:17.00] CHIP BACCIOCCO: There's value to having that. We just have to get better as an industry, a lot better as you're saying and I'm saying too, we have to get a lot better at being much faster and much more responsive.
[00:15:27.11] REID HOLZWORTH: You know what the other thing too is funny, is in the IA channel, I feel like a lot of people, a lot of agents are picky about the stuff they write too.
[00:15:37.07] CHIP BACCIOCCO:
[00:15:37.25] REID HOLZWORTH: Totally. And it's like why. Why do you care?
[00:15:38.72] CHIP BACCIOCCO: I don't know why.
[00:15:39.35] REID HOLZWORTH: It's like I don't want that non-standard business. I don't know. I run a business. And my business is to drive as much premium as possible. If you're non-standard and you're paying $700 a month for auto insurance, I would rather write that policy than 10 $700 a year auto policies. Why do you not want that? And that's what's crazy.
[00:16:01.16] You have to have the markets for it. You're not going to put that with the Hartford Travelers or Liberty or something. Not going to compete any names, but you know I mean. You put that with the company that makes sense for with.
[00:16:16.11] And so it's like, that's part of it too. It's like, nah, I don't want it because it's not exactly what I want. It's crazy. I used to-- back when we had the [INAUDIBLE], we'd write everything. We'd go-- I'd go to-- our people would. They go to all of the captive agencies, State Farm, Allstate Nationwide, Farmers, all of it.
[00:16:36.05] We had somebody go out every day. And they go out and they buy them all cookies and he'd say, send me all the shit you don't want, literally. Send me the shit. And you know what, I'll tell you. This is a great sales thing for you guys in local market. Go to the captives and be like, hey, we love all the stuff you guys don't want.
[00:16:51.44] Because here's what happens. You know, Mary and John Smith get a DUI, right. Mary gets a DUI, let's just say. State Farm cancels it. What are they going to do? There's like, yeah, we got to cancel all of your insurance. That agent has been working with them for 20 years. And they have all their kids' stuff and their family and all this.
[00:17:10.82] They don't want to say, sucks to suck. Go on the internet.
[00:17:14.51] CHIP BACCIOCCO: No.
[00:17:14.99] REID HOLZWORTH: They want to say, hey, I got a guy that's like-- to your point-- that's going to help you. Right, you help them. And then all of a sudden, sure, maybe the personal auto is nonstandard. But then you get all the commercial lines, all the personal line. You get all of that like. Why do you not like-- people are like, no, I don't do that kind of stuff. I just laugh at them, like why would you not?
[00:17:36.06] CHIP BACCIOCCO: I don't know. The one that bothers me more. Your example is totally valid. But the one that bothers me is when they don't want to write just a renter's policy.
[00:17:45.29] REID HOLZWORTH: It's not worth that person.
[00:17:46.85] CHIP BACCIOCCO: Because that person--
[00:17:48.26] REID HOLZWORTH: It's a frickin lead man. It's an opportunity.
[00:17:49.98] CHIP BACCIOCCO: It's an opportunity. That person is going to become a 35-year-old and a 45-year-old. And they're going to have a bigger family. And they're going to maybe have a business. And you're denying yourself the opportunity to have yes, a non-profitable relationship right now. But so what? It's an investment. Make a friend.
[00:18:09.26] REID HOLZWORTH: That's right.
[00:18:09.80] CHIP BACCIOCCO: Make a friend. You can never, in this world, do wrong by making a friend.
[00:18:13.97] REID HOLZWORTH: That's like-- so have somebody in your office that's focused on, the younger person that's getting started in the industry.
[00:18:23.39] CHIP BACCIOCCO: Absolutely.
[00:18:23.82] REID HOLZWORTH: Renter's policy done.
[00:18:25.15] CHIP BACCIOCCO: Done.
[00:18:25.58] REID HOLZWORTH: Track it. Put it in the system. Conversion ratios. What are they doing? When are they closing? Oh, what do they cross them? I can tell you right now, when I was an agent, I was 2.66 policies per customer. Like literally, like what's your policies per customer? Are you cross-selling? Because that's just it. If they're renting, they probably have a car.
[00:18:46.64] CHIP BACCIOCCO: They do. Right. Or they will.
[00:18:47.90] REID HOLZWORTH: They probably have friends that have the same thing.
[00:18:50.36] CHIP BACCIOCCO: That's my other strategy. I'll have some agents say well, you know, I don't want to do an RV or I don't want to do a snowmobile.
[00:18:57.37] REID HOLZWORTH: Oh, that's another one.
[00:18:58.16] CHIP BACCIOCCO: I'm like, if anybody that owns a snowmobile, that's not the only thing they fricking own. Are you kidding me? A snowmobile? Who own just snowmobile? This is totally a toy. So he's got to have a car. And he's got a house, or she's got to have a house.
[00:19:13.43] So those kinds of things, thinking a little bigger, I did have-- I have had a couple of agents that really were very creative. There was an agency that wanted to buy all the flood leads. I'll use the word leads. I'm getting used to it, opportunities, referrals, whatever. I want all the flood stuff, by itself, monoline.
[00:19:30.68] And a lot of agents were like, oh , I don't want to do it. But it's-- but there's a house that comes with it. You don't buy-- there's other stuff. Anybody that's-- plus it always signals to me that it's a responsible person, like that's-- like some people avoid buying flood unless they're told they absolutely have to and the mortgage company needs it and blah, blah, blah.
[00:19:51.92] But if somebody just voluntarily steps voluntarily, steps forward, and says, I just want to have flood, just in case. Yeah, oh my gosh. That's like a responsible person. They're like protecting everything. That's like the dream risk. That's what you want.
[00:20:04.26] So there's little signals in the market. You've got to think ahead. Where will this person be later? Who might they know? How do I-- And that takes time.
[00:20:12.26] REID HOLZWORTH: It's developing that. But I think going back to your point about the producer availability, I think as a producer or an agency owner becomes more mature and they have that book, the reality is they're dealing with kind of their core set of customers all the time in things, real estate developers, huge corporations, whatever it may be, high net worth individuals.
[00:20:37.29] And so they-- because I've been there. And you're busy, right. You have a lot. But here's the thing guys, hire somebody to take that stuff. Why not continue to grow your book. Why not put some technology around this stuff to start to track it. I bet.
[00:20:55.43] I don't know. I'm just going to throw this out there. I bet 80% of the agencies that are listening to this right now, aren't tracking conversion ratios.
[00:21:04.22] CHIP BACCIOCCO: Oh, for sure.
[00:21:05.03] REID HOLZWORTH: You know, like they--
[00:21:06.87] CHIP BACCIOCCO: They don't know that. Well, and another one they don't know is they don't know their cost to acquire the next customer.
[00:21:12.80] REID HOLZWORTH: Acquisition cost.
[00:21:13.49] CHIP BACCIOCCO: They don't know their acquisition cost. They don't know. They don't know a lot of things. And I and I'm not going to beat up on it too much because I think it's-- you could try to calculate it and then somebody else could kind of look over your shoulder and say, you forgot to include that, and you forgot to include that. It's easy to get it wrong. You think you know and you might not really know. But they should. You're right. They should.
[00:21:31.46] REID HOLZWORTH: So like, and it's funny, you know. You want to start doing that? It's cool. You got to start somewhere. Start tracking that. See what your, are the agency owner's conversion ratio is as opposed to one of your new agents that's coming in. Guaranteed, yours is way higher. Why? Teach them that.
[00:21:50.69] Then you start to make more money. And then it's repeatable. I mean, that's what's called predictable revenue. Read the book. Great frickin' book by the way, Predictable Revenue. That's how you really grow this thing. So you say, hey, every new agent has this conversion ratio. Our customer acquisition cost is x amount.
[00:22:08.90] Our lifetime value is x amount. Hey, we bring in a person. It costs us x amount of dollars. They produce x amount which equals x amount. When they get to this level, they're now bringing in another one and another one and another one. And that's how you grow.
[00:22:22.23] CHIP BACCIOCCO: You're thinking of scale. You know, you're thinking of scale--
[00:22:24.44] REID HOLZWORTH: I'm thinking of scale, but that's how my brain works.
[00:22:26.02] CHIP BACCIOCCO: And you're thinking of it as a math formula. And I remember actually another thing I learned at some point in my career was that sales was not just an art form. I think when I was early on, I thought sales is an art form. You just have to have the gift of communication and persuasion and then later on, I'm like, no, no, no.
[00:22:46.04] It's actually math. It's just, you have to know which conversations to get yourself into, how frequently. Make enough of them Yeah and let the math play out.
[00:22:54.20] REID HOLZWORTH: The reason why those guys had a 60% plus conversion ratio, or 56% conversion ratio was because they brought in the leads that fit them perfectly. They knew exactly what they were good at, where the sources were, the scripts to put on that, the whole nine.
[00:23:15.65] They had dialed it in. They didn't start there. They didn't wake up one day and hey, we're the best at this. They started at crap like everybody else. But then they use technology to monitor what the people were doing and the data to tell them and give them insights about hey, we should grab from over here because, once again, our conversion ratios are better there.
[00:23:33.96] People don't even track lead sources, man. Like that's the simplest thing, just start tracking lead sources. Where are our leads coming in? Oh, hey, how did you hear about us?
[00:23:43.28] CHIP BACCIOCCO: They have to-- it is simple, but-- so that's an interesting one. How did you hear about us? So a lot of times now, people will just say, the internet. Well, that's not enough. Which path on the internet? You got to kind of figure out, well did you did you end up on our agency website? Did you find up on our Facebook page? Did you find just through TrustedChoice.com
[00:24:00.92] Did some insurance-- maybe you landed on an insurance company page and they had an agent locator and you came that way. So I know that's a lot to torture people with, but and maybe I'm not even advising that they do torture them when they get them on the phone, that bad. But try to find a little bit out and try to find out again, mathematically, where are they coming from? Because then you're right, you can reinvest in those segments.
[00:24:25.20] The scalability, too many agencies just they kind of grew up thinking, it is a good attitude to have, that we're here to help people. So they start on service. And how many agencies have you heard say, when they say, what makes you special? Service. We have the best service. They all have the best service.
[00:24:43.62] But it reflects their own attitude that they-- and it's a good attitude, that they're there to serve. Right. That's my job. I help people with insurance. But if that's all you ever think about is just helping, helping, helping, and you never think about the math of your business and how to scale.
[00:24:57.00] Like you said, you have it down to like a formula. If I can do this and if I can make a margin, all I have to do is then just hit repeat. Hit repeat. Hit repeat. Hit repeat.
[00:25:05.73] REID HOLZWORTH: And easier said than done. You've got to have the right people and all of that. But you start to build that muscle. You know what to look for over time. But it's actually not that complicated. I think in our industry, it's tough because like you said, we're helpers. And we help people. And we really feel for our customers. At least I do. But you have to remember we're running a frickin' business man.
[00:25:28.53] CHIP BACCIOCCO: Yeah, we are.
[00:25:29.34] REID HOLZWORTH: If you're running a business and what does a business do? It drives revenue, drives profit. Right. And what does that do? And people, like they're like scared to talk about that stuff. No. That's how you impact other people. Because if you're driving a business that's profitable, you can hire more people.
[00:25:44.79] And guess what, if you're super profitable, give the money away. Charity. Do things. Impact others. But hey, just by your business making money and you spending money on shit, that drives the economy. It's good. So do that. And do that the best you can.
[00:26:00.60] But just by you saying, no, I don't want to do that. Or I don't have time for that, or this, that and the other, OK. I get it. You want to sail into retirement. Yeah. That's like Rich Dad, Poor Dad shit. That's working in the business, not on the business. Those are good books. When you're older, kinda funny. I heard you read that shit back in the day.
[00:26:19.74] But it is. It is that, right. It's working in the business, not on the business, you know. I have a friend, really good friend of mine. He owns a motorcycle custom shop here in Milwaukee. It's called Moto-fied. Awesome guys, good friend of mine. And like I've helped him with his business.
[00:26:34.29] And it's funny, because he's an artist. The guy is a freakin' artist, man, like he really is. But he has so much customer, so much work coming in all the time he can't handle it. And it's simple stuff like that. It's like dude, you need to step back and start to look at what's profitable.
[00:26:49.32] I know you want to help everybody, but you can't. Take a step back and start to look at what's coming in. You can't do a tire change for $20 anymore. Yep, like hey, my minimum ticket is $250 because I'm so busy. You know, I'm sorry. I'll do tires and do all kinds of other custom cool shit if you want that.
[00:27:07.86] But it's like, it's that kind of mindset. And it's so hard when you're in the business, you started it from nothing, and you're just scrappy, just grinding as an agent. And then you hire the CSRs and now they're helping you and this. And it's like, stepping out of that and going, what is going to drive profitability?
[00:27:25.68] CHIP BACCIOCCO: So Pat Gallagher had another thing that he said and this was one of those, again, early career lessons, that at the time, I don't think I knew what the hell he was talking about. But it has resonated over the years. And he said, "Nothing happens until a sale is made." And I would go, I don't-- of course a lot happens. To me, that didn't make any sense. What do you mean, nothing happens until a sale is made.
[00:27:45.03] What he meant was if there's not a sale at the end, the sale was the goal, that was the purpose. There's no reason to put a whole lot of work into an account in terms of how are we going to service it. Don't get all focused on servicing accounts. Figure out how we're going to win a client.
[00:28:02.43] After we've won a client, then we'll help the hell out of them. But make sure we've won a client. And I think this is also lends itself a little bit to the insurtech space. Because if I do have some advice for our insurtech friends, it's-- and whenever you're about to build technology, so in the technology business, we have all this fixed costs that we have to put into every damn product.
[00:28:21.87] And so we're going to build this platform. We're going to build this. We're going to write all this code. And I've often had some pushback from people that work for me or that I've worked with and I've even been guilty earlier in my career saying, well, we're going to build this product. And then we're going to sell it.
[00:28:38.25] And I think over as I've gotten older, I go, no, no, no, no, no. Let's sell it first. Meaning, let's find out that we have a paying customer that wants to buy this. Let's make sure that's absolutely solid. If possible, we can even get a check, which by the way, that's what Henry Ford did.
[00:28:56.49] He actually sold his cars before he ever built them because he sold them to dealers. He would go out to dealers all over the Midwest. He started there and he said, hey, I'm going to I'm going to send you 20 cars next spring. Here's what it's going to look like. I need a check. So you'll be the first dealer in town to get them.
[00:29:12.39] OK, here's a check Mr Ford. And he would use that check to go finance actually building the cars. They didn't exist. And some degrees, we have to do that too. If I was today going to start another brand new insurtech company, and you've done a couple.
[00:29:26.49] You want to know for sure, not just, I feel it in my bones. This is going to be a great product. And agents are going to want it. Insurance companies to love it, right. OK, that's great. It's good to have that in your bones. But it's a lot better to have, this company is going to buy it and they're going to pay x. And this company is going to buy, and I've got letters of intent or handshakes or something, to know that you have customers lined up. Then as soon as you do, then go back and build it.
[00:29:51.99] REID HOLZWORTH: The other thing too, I talked to so many guys in the industry startups, and they're like, I have this big blah, blah, blah, all this stuff. And that's great. Get somebody to buy it like you said. That is a big leap.
[00:30:04.86] CHIP BACCIOCCO: Big leap.
[00:30:05.58] REID HOLZWORTH: Big leap.
[00:30:06.27] CHIP BACCIOCCO: So you might as well do it first.
[00:30:07.47] REID HOLZWORTH: Yeah, you know. I mean, get them to buy it. And then it's funny, because then you get these guys that are smart. Like I've talked to a few of them recently. And they're like, I have all these-- they are ready to buy this thing. Like you said, letters of intent. Like some of them have even funded me and helped me like they really believe in what I'm doing.
[00:30:25.56] That's something. That's something, because you're so right. And it's funny because so many companies in technology, not even in our industry, but just technology in general, they go out, they build this thing and it never takes off, because they never sell it.
[00:30:39.03] CHIP BACCIOCCO: They never sell it. So let's give credit to Pat Gallagher. I'll give you the quote again, "Nothing happens." He said it this way, and it confused me. "Nothing happens until a sale is made." And that's what he meant. The rest, don't build anything. Sell it first. Then invest your world, invest your life in it. Pour yourself into it. But don't just pour yourself into something and have no customer.
[00:30:59.55] REID HOLZWORTH: That's every business, and it's as a small business. And I've talked about this before. They call it like the entrepreneurial stage where everybody like, they love it. And it is fun. I can pick my logo. And I do this. And I spend all this time building the systems and doing this and blah, blah, blah, blah, blah.
[00:31:16.93] You know, I've worked at those guys in the past. And I'm like, we wouldn't sell them, our system. I'd be like sorry, dude, can't sell it to you. He's like, what do you mean? I'm like just not going to do it. Right now you need to go out and close some frickin' deals. You know, but go close some deals.
[00:31:32.55] Here's the reality, selfishly you know, what happens there is we spend a ton of time with these guys and they go belly up in a year. And it just doesn't work. You know what's funny is many years ago I was looking at HubSpot actually for marketing automation. And I remember the sales guy, I was like, I always mess with sales guys. I always like try to dig in like, why are you asking me that? Why is that, the mechanics of it all.
[00:31:57.39] And he said, we won't sell this to you unless you have a dedicated admin. And I'm like, really? You're not going to sell me this shit. And he's like, he's like, nah, we won't do it, can't do it. And I'm like why? I'm like, why is that, like give me the real deal? And he said, well, because first and foremost, I get comped on here too.
[00:32:16.92] And you know, and if you're not going to stick around, you know. And he's like, if you don't have a dedicated person, because we found this thing, it's ugly, it's hard, it's a lot to do. And a lot of people just want to buy it. And they have the thing. And they tell everybody they have the thing, but they never actually implement it and use it. And then two years from now, I don't get paid my commission but I want to get paid. You know, so he's like, I'm not going to sell it to you until you have a dedicated admin.
[00:32:40.02] And that's so true in technology. And so that's part of it is a lot of people get caught up in building the best, nicest thing. It's like building the most awesome race car and putting tons of money into it and never learning how to drive. I crush guys with expensive cars in these old cars, crush them, because they don't know how to drive.
[00:33:04.07] CHIP BACCIOCCO: They don't know how to drive.
[00:33:04.62] REID HOLZWORTH: I raced a fricking McLaren not that long ago in my GT350 Shelby 2018. That McLaren will crush that car, like hands down. Crushed them, crushed them. You know, and it was off-- the guy was super cool about it. Like he wasn't mad about it. But the reality is, that's the same thing.
[00:33:22.59] You can buy it, build it, do all this stuff, but you really need to learn how to drive. And your point here is you've got to sell shit.
[00:33:30.63] CHIP BACCIOCCO: You've got to sell shit.
[00:33:31.41] REID HOLZWORTH: That's how it works. We're running business.
[00:33:32.85] CHIP BACCIOCCO: Running business, a business needs customers, make sure you have customers.
[00:33:35.70] REID HOLZWORTH: If they build it, they will not come.
[00:33:37.41] CHIP BACCIOCCO: That's true. And I know that's the romantic thing, I've got this idea, and I'm going to write this software and it's going to be great. No, don't be romantic. Don't be romantic.
[00:33:46.44] REID HOLZWORTH: No, I will say though, to be fair, there's a lot of people that have pedigree. Like I have friends in this world that have done it. They've built companies. They know it. They have huge networks. It's a little bit different. When they build it, they will come.
[00:34:04.53] CHIP BACCIOCCO: They will. The most famous example maybe is Steve Jobs. I mean, he would make products that everybody would go, that's dumb. No one's going to buy. And he'd go, just I'm not taking any input. I know exactly what it should do. I know exactly what it should look like. I know you think it looks alien, it's going to be fine.
[00:34:21.27] They kicked him out of his own company because he was-- can't design anything. There are a few that have that gift. But for most people, when you're risking your career, your capital, your friendship, whatever it is, why not sell it first? And I just-- that's been my advice for a while. Sell it first. I don't want to say sell it, just share the idea, make sure people, don't do it unethically, you know you're not like you're selling things that don't exist.
[00:34:47.07] This is what we're going to build. This is what it's going to do. This is what's going to do for you. Here's what I need from you. And if they're there then and they write, if you build a chip, I will buy it and put it in writing or something. Like I said, give them a check. You can get a discount now. Pay now. This is your coupon. You can buy it later, you'll be first in line. But I need to check. Then go build it. You're doing everybody a favor. Do it that.
[00:35:10.50] REID HOLZWORTH: I think it depends. Sometimes you got to build a little bit to well--
[00:35:13.14] CHIP BACCIOCCO: You got to build enough to-- you got to proof a concept, nothing wrong with that.
[00:35:17.07] REID HOLZWORTH: But it's the it's the gold plating. That's why they say, like developers should never be a CEO or run a software.
[00:35:23.91] CHIP BACCIOCCO: That's where I was really going, right. I talk to my software developers and they're all such purists. They're idealists. And we're going to build this thing. And it's going to be better than the pyramids. And I just look, I go huh. And I was that guy. I remember, I was a young idealist. I was.
[00:35:40.20] And there's people out there that are listening that know, oh my god, Chip, you were the guilty guy. You always had this vision. You were going to build this thing and then everyone would buy it. So I've learned the hard way. It's great to have a vision. You got to have a vision. But make sure you have a customer before you build the entire damn thing.
[00:35:58.83] REID HOLZWORTH: It's [INAUDIBLE] right? I mean, you can build as you go. And that's the thing. When you sell something and somebody puts down some hard-earned cash on something, they're going to help mold that into what makes sense for business. 100%.
[00:36:12.64] CHIP BACCIOCCO: So on that frame, right I would probably need to talk about agents a little bit. So if you're selling a product to independent insurance agents, which many of our friends are, and I guess I am too.
[00:36:26.41] REID HOLZWORTH: Yeah, sure.
[00:36:27.53] CHIP BACCIOCCO: Absolutely. You have to understand, and most of us do, if you've met one independent agent, you've met one independent agent. I mean you just can't-- I wish we could generalize. I mean, you can for some things. They are challenged to answer the phone and so forth.
[00:36:42.71] They all are unique, and that's their strength. Their strength is their diversity of skill sets and talents and location and size and experience and appointments and a million other things. So their diversity in that way is their strength. But it's also the challenge when you're trying to sell a product to them and trying to get them to use that product.
[00:37:02.03] And you really have to be prepared for the fact that they are-- I don't know. All the agency managements, and you ran one. You ran a great one. And every agency wants to use your tool a little bit differently, didn't they?
[00:37:17.22] REID HOLZWORTH: Oh. 100%.
[00:37:19.02] CHIP BACCIOCCO: You built one tool.
[00:37:20.64] REID HOLZWORTH: You know what, I'll tell you. You know what's funny about that, though, Chip is [INAUDIBLE]. So it's funny because we would sell, this is all on Salesforce, those that don't know. And it's all like-- we built it native to Salesforce so they could declaratively build whatever the hell they want.
[00:37:33.15] We always sell this thing, sky's the limit, build whatever you want. We sold a shit ton of agencies because of that. But I'll tell you, man, they all did it different. And everybody does everything different. But I'll tell you, probably 90% of our customers used it as it is.
[00:37:48.33] CHIP BACCIOCCO: And survived.
[00:37:48.99] REID HOLZWORTH: And survived. And they did, they did well. Like they changed a little couple of little small things. But they weren't doing like, I don't know, like I'll just name a few, like what [INAUDIBLE] was, or the name of cover that were like our customers, all these crazy [INAUDIBLE], all kinds of shit, right.
[00:38:04.44] Generally speaking, they kinda did some little stuff to make it kind of custom to them and that was all they needed. But they love the idea of technically being able to do whatever they want. But you're right in that they do. Their businesses are all different. They are. Technology is kind of the same.
[00:38:21.57] CHIP BACCIOCCO: Kind of the same. And they want to think that because their business is different, they want to bend your product and there's some happy balance. Because remember the other thing that I would remind the insurance agencies and the insurtechs is that I'll go back to that quote I said earlier in our conversation, "The silicone is easy, carbon is hard."
[00:38:42.96] So it's actually the change management within the agency. This is a brand new tool. Brand new tool, here's a brand new tool here. The agency owner says, we're going to use this tool. It's going to be great. We're going to be able to finally track our acquisition costs, whatever it is.
[00:38:56.19] Oh, he's all excited, and all the people are like, I didn't used to have to click on this stupid thing. I didn't use to have to do this. I didn't use to have to type in here. And so they're all finding little ways to undermine your thing. They don't mean to be counterproductive. They're not like waking up in the morning, I'm going to undermine my boss.
[00:39:19.78] But it's just their natural, this goes back to what we were talking about too. Humans are awesome at adapting, and the only thing they hate to do-- nothing they hate to do more than change. So it's that yin and that yang that we just have to deal with. But so when you're building a product for agencies and you would know this better than me, be prepared that everyone's going to want to use it a little differently, so be flexible as the vendor, but to your point, don't be too flexible so you end up with 17 different implementations you can't support.
[00:39:48.49] REID HOLZWORTH: Oh 100%, right.
[00:39:49.18] CHIP BACCIOCCO: And there's no user, you couldn't have a user group meeting and no one would agree on how the thing worked. That would be terrible.
[00:39:54.91] REID HOLZWORTH: And I mean, I'll say something to that too. This is like advice on technology, one version. Everybody's on the same version. You can't do different versions for different people. That is bad news. That will bite you. But you're right, it can't be so complex where you have all these different templates and all these things because to support that, train that, implement that, it's a nightmare.
[00:40:15.31] CHIP BACCIOCCO: And they can't even teach each other, because the other thing you want is you want a little cross-pollination of ideas and best practices. So among those agents, we have all these thousands of agencies. I really like the idea of several different people lately have tried to come up with these ideas. Let's let agents talk to each other about what works and what doesn't work. And I that's a really great thing because then they can start sharing.
[00:40:34.94] But if everybody's doing everything totally differently, than there is no way to share. You have to share how to use three or four solutions well. And then for agency owners, I would just say, if you're going to buy an insurtech product, my best advice is realize that your change management, changing behavior will actually be the biggest challenge.
[00:40:53.23] The tool is not going to be the hard part. It does what it does. Rely on a good technology partner to deliver you a good product and tell you what it does and how to do it. But it's going to be incentivizing your team.
[00:41:05.64] REID HOLZWORTH: Well, that's a good point. I was just thinking about that. I saw agencies that adopted extremely well. And what they did was when they bought a new product, they really like incentivized their team to use it. And they did like all these games. They put like parties around it. And they made it so much fun and like the whole team, I mean, they just loved it because of that.
[00:41:23.41] Not just the owners or the people that bought the software from us, but the agency itself. I mean, they just-- they all adopted it that well because of that. But you're right it's kind of the naysayers and the change management. I've had the opposite where literally, I mean, I've had agency owners call me and just say, this isn't working blah, blah, blah, blah, blah.
[00:41:45.74] Why isn't it? Oh, the staff hates it. They don't want to use it. You know, and it's like, well, did you do this? Did you do this? No. Mary just said no. You know, Jeff said no. You know and it's just like, I'm like--
[00:41:55.96] CHIP BACCIOCCO: And Mary's been there for 25 years. And Mary knows where everything is and we can't upset Mary and that's a universal truth.
[00:42:04.85] REID HOLZWORTH: And I literally said to a guy one time, this is no bullshit, I said, well, I can tell who is wearing the pants in that agency. He got mad at me about it, but it's like, I'm not wrong, you know.
[00:42:17.74] CHIP BACCIOCCO: And Mary could be named Steve. It's not about-- there's always a person that has a lot of tenure, that has a lot of indirect clout in the office. And if they aren't on board, if you haven't incentivized them to get out of the way, you've got a big problem.
[00:42:34.06] REID HOLZWORTH: Yeah. Let's get off this. Let's get off the agency adoption topic. We beat this thing to death.
[00:42:39.73] CHIP BACCIOCCO: We have.
[00:42:40.18] REID HOLZWORTH: Look, agents adopt a solution.
[00:42:43.04] CHIP BACCIOCCO: Please.
[00:42:43.48] REID HOLZWORTH: Just do it, you know or don't buy it. That's it. It's that simple.
[00:42:49.04] CHIP BACCIOCCO: And be prepared to get your people to embrace it. And you'll have to win them over.
[00:42:53.83] REID HOLZWORTH: Yes, they are going to push back and you may not even see it because it's a new thing. And some people are scared for a number of reasons, job security, whatever it may be. It's just a new thing they have to learn and they're already stressed.
[00:43:06.46] Every day they end up with an extra 500 activities in their agency management system or whatever it is they've got to get through that. And so it's tough. It's really tough. But if you're going to do it, you've got to do it. And then incent the team to love it. It'll make all of our lives easier.
[00:43:24.31] Agencies, generally speaking, really do like technology. And they do really want technology to help their business. There are so many though agents that come up with the next bell and whistle that's going to revolutionize the industry. And it does make sense. And there's things that need to be solved in this industry.
[00:43:49.21] But going back to your point, outside of you using it, who's going to buy it? And I'll say this too, being that guy and being in that world, it's tough to have an agency and a technology company as well. You need to pick one. You get to branch off.
[00:44:07.51] And it doesn't work very well in my experience, and I've seen a lot of companies that have done this, it doesn't work well when you have both. And so you need to step out.
[00:44:17.26] CHIP BACCIOCCO: And we know some guys that have-- we do.
[00:44:19.57] REID HOLZWORTH: Oh yeah, we do. And it hasn't gone well. It doesn't.
[00:44:22.96] CHIP BACCIOCCO: Well, you got to pick one as you said. I mean, one can go well if you pick one. And there's nothing wrong with morphing, Zywave Foundation, they won't mind me saying at all, came from an agency. And it was an agency. And Bill Hack ran that agency and they created some internal software tools that they realized every employee benefits brokers should have.
[00:44:43.99] But that transition when they were doing the juggle, they were-- both were suffering a little bit right because they weren't focused on either being a really good agent or being a really good software provider. And so they had to make the full transition.
[00:44:57.26] And obviously today, Zywave is a full technology company. But there were days when they weren't. And to your point, I won't name any more current organizations, but they struggle with it. It's really tough, and you really have to step away and focus on one or the other.
[00:45:12.80] REID HOLZWORTH: Which means you have to give up something you love. They got into both because they were either good at it or loved it or had some passion for it. And so I don't know, that would be hard for me too.
[00:45:23.17] CHIP BACCIOCCO: And I mean, it is successful if you pick. I'll just name one, like [INAUDIBLE] and he was at his dad's agency. Boom. He's like, I'm going to build this thing because it's better because we suck at this and I think this tool is going to be good. And they're like, OK, but then go do that. Don't do both.
[00:45:39.88] I'll mention another one if we can. Peter MacDonald at Wunderite.
[00:45:43.48] REID HOLZWORTH: There you go, same thing.
[00:45:44.86] CHIP BACCIOCCO: Family Agency, he pulled-- he had an interesting idea, but separate, went on his own way. He's committed to one.
[00:45:52.24] REID HOLZWORTH: Peter's a good dude. I like Peter. Yeah so anyways, fun stuff. So Chip, advice, back to the listeners. What would you change in this industry if you could change one thing?
[00:46:03.76] CHIP BACCIOCCO: If I could change one thing.
[00:46:05.29] REID HOLZWORTH: How about in technology, I don't know. That's pretty broad.
[00:46:08.53] CHIP BACCIOCCO: I mentioned before that for the IA channel. I'm going to stay in the AI channel for a minute. When we solve this producer availability challenge, that's going to be huge. So that's my personal mission that I can most influence is to help get opportunities to independent agents that will talk to a customer right now.
[00:46:28.39] We have this huge network of agents. We know what they do. We know where they are. And if we can come up with the right notification systems and kind of borrow from Uber, we will solve that problem. From a technology standpoint, and you and I have talked about this before, but I still think it comes down to integration.
[00:46:46.18] I still think-- and I think we're on the cusp by the way. I think we are headed into a time where, this is me, and you work for one of these companies. So I'm going to, but I think you work on the-- I think you're on the side of integration. I think you are.
[00:47:01.63] REID HOLZWORTH: That is our business.
[00:47:03.16] CHIP BACCIOCCO: And I think once everybody embraces the idea that all the major systems have to have, I'm going to call it an open API, a secure open API. And of course, they are businesses, they can charge for access to that API. But once everybody embraces that, and it really becomes possible that all these systems can talk to each other relatively easily. It's not a fortune to connect this system to that system and so forth.
[00:47:27.40] Then we'll start to see best practices around how do you wire these together, which combination of solutions really produce great results. I think we're on the cusp. I've already told people when I've had presentations, I'll say we're entering this era of-- we've been in an era of integration, much more rapid in the last two or three years than it was six or seven years ago. And I think the next two years will be definitive. And I really think we'll go over the tipping point.
[00:47:52.75] And I want to encourage all of the agency management system providers, especially, not just them, though. But get away, please abandon, and I have to do the same. We've all had ambitions of this monolithic solution stack. and
[00:48:07.78] REID HOLZWORTH: That's not a thing.
[00:48:08.84] CHIP BACCIOCCO: It's not a thing. It's not going to be a thing.
[00:48:10.38] REID HOLZWORTH: It's too much. There's too many components.
[00:48:12.01] CHIP BACCIOCCO: Too many components. We are too diverse of an industry as we've talked about before. Too many things need to happen. The strength of the IA channel is all these different business specializations that we have. And the only way to empower that is to let innovators figure out how.
[00:48:25.99] So I think of it as a patchwork of LEGOs. This is an old analogy I've used. And you got to let the agency or insurance company assemble the right LEGOs for them, but those LEGOs have to snap together. We can't just all be out there building hand-carved solutions out of a single piece of wood.
[00:48:43.91] REID HOLZWORTH: That's the issue. I think you're right, though. I think we're of at the tipping point there. You know, and I've been in those conversations, multiple conversations around kind of that monolith thing. And the big systems out there have now realized, like there's no way. Like it's not-- focus on the things they're good at.
[00:49:01.96] Acquire things that make sense to bolt on as they become successful, but let everything connect. Because ultimately, that's what in this case and this agency kind of technology and insurance technology in our world, especially connected to the distribution, that's what the distribution agents are calling for.
[00:49:20.74] Yeah, everybody knows that. They're doing it. I think it's at a tipping point because the bigs that are out there, and I know this because I'm part of this is they've been held back by the technology itself. People don't realize that. They think it's because they want to hold it. And at one point it was. They didn't want to open it up for competitive reasons. But that was many, many years ago.
[00:49:42.01] Now when you have their top, call it top 50 customers that equal 90% of their revenue or whatever it is that are screaming for this type of stuff, they're doing--
[00:49:53.41] CHIP BACCIOCCO: I know. And I know it's knotty. I know that behind the scenes, it's easy. For those don't know, and it's your podcast. So they know, you're on the executive committee at Applied. You're right there. This is something you guys talk about at least once a month.
[00:50:09.40] And it's one thing to say, well, great, we'll have this single. But then you realize, wait, right behind that or two layers behind that it gets really complicated. Like how do you get this system and that system? Technically this data model is a little different than that data model. And there's no easy way to get. I get it. I get it. I do. So be honest about that. You don't want to say, don't look in the back room, it's messy back there.
[00:50:33.16] REID HOLZWORTH: It is. And that's everybody.
[00:50:34.68] CHIP BACCIOCCO: It is. It absolutely is everybody. It is absolutely everybody.
[00:50:37.64] REID HOLZWORTH: These systems have been around a long time. And then when you bring it all the acquisitions over the years and all of that stuff that's connected, I mean, different code base. It is complicated.
[00:50:48.07] CHIP BACCIOCCO: It is complicated. And it is messy. But you're right, the language, and maybe that's what I'm seeing. I'm seeing there's a lot of very positive language, the simpler systems. It's easier for them, so I'm not going to mention names either. But there's some agency management systems that for whom it's easier and for whom they've opened it up.
[00:51:05.80] So as long as Applied and Vertafore, let's use the two big dogs in the room, Zywave, I guess, might be starting to be the third. If you guys-- I would love to see it.
[00:51:15.40] REID HOLZWORTH: It is kind of like a radio right now.
[00:51:17.23] CHIP BACCIOCCO: Yeah, it is like radio. It's like ooh, ooh, like oh it is. We even have a microphone between us, it feels like radio.
[00:51:23.68] REID HOLZWORTH: It's fun. [INAUDIBLE] is just coming out.
[00:51:26.08] CHIP BACCIOCCO: Yeah, right, exactly, like you don't know what's next. So we sorta do it by the seat of our pants and everything. But it's great. We're going to-- 100 years from now, insurance is going to be boring. No, not true. I'm sure it'll be fine. It's really great. It's very interesting right now.
[00:51:44.59] REID HOLZWORTH: All right, two more questions.
[00:51:46.18] CHIP BACCIOCCO: You bet.
[00:51:46.57] REID HOLZWORTH: Question one, who do you think I should bring on the show? Who would be good for me to interview?
[00:51:50.54] CHIP BACCIOCCO: I mean, you know so many great people. So I don't know who you've had on here, Reid, but we mentioned Peter MacDonald before. I think if you haven't had him on, I would do him. Jason Walker, have you ever interviewed Jason Walker.
[00:52:03.67] REID HOLZWORTH: Oh, yeah, I know Jason.
[00:52:05.23] CHIP BACCIOCCO: Smart Harbor.
[00:52:06.13] REID HOLZWORTH: I have not. I know Jason well.
[00:52:07.09] CHIP BACCIOCCO: And now with Agency Revolution, I'm a big fan of Jason's.
[00:52:12.88] REID HOLZWORTH: He just started the company. Now he's doing like basically consulting for agencies on technology.
[00:52:18.82] CHIP BACCIOCCO: Well, he was and even newer than that, he started. It was called Agency InsurTech I believe.
[00:52:24.13] REID HOLZWORTH: Yeah, that's what it was.
[00:52:25.18] CHIP BACCIOCCO: But then he-- almost immediately, one of his clients pulled him in. So now he's effectively running Agency Revolution which used to be run by years ago by Michael Jans, and I think he's going to transform that organization. I think he would be a good guest.
[00:52:41.83] REID HOLZWORTH: Smart Harbor, a lot of people don't realize that Ilya was involved in that.
[00:52:44.97] CHIP BACCIOCCO: 100%.
[00:52:45.88] REID HOLZWORTH: I remember that.
[00:52:46.57] CHIP BACCIOCCO: We all-- there's a circle. We were just in a meeting in Alexandria last week, and we were talking about that summit that we had at your office and my office back in 2017. Do you remember that? We were all whiteboarding together. Yeah, Ilya was there. That's when you said Ilya, I remember that. Ilya was there. The guy that reminded me was an agent from Ohio named Matt Simon. And he was there that day, and I ran into him last week, and he's like, remember that day.
[00:53:12.67] REID HOLZWORTH: That was funny.
[00:53:13.03] CHIP BACCIOCCO: Yeah, I mean everybody was there. The Ask Kodiak guys were there. Seth Zarembo was there.
[00:53:18.40] REID HOLZWORTH: Salesforce was there.
[00:53:19.33] CHIP BACCIOCCO: Salesforce was there. They just showed up.
[00:53:22.48] REID HOLZWORTH: Yeah, they totally did.
[00:53:24.71] CHIP BACCIOCCO: It was one of those funny, funny days. But anyway, who should you have? Those two for sure. Those are the two names that pop into my head off the top of my list. Michael Lebor. Michael's got a lot of interesting ideas, InsuranceGiG, I think. I don't know if his-- I think he's got-- I don't want to say his half.
[00:53:49.16] He's going to figure it out. It's one of those companies that's got an interesting core idea, and they're going to figure out how to get where they want to go. But it's about integration, and again that's one of those topics that I think is really timely.
[00:54:00.39] REID HOLZWORTH: That's his whole business.
[00:54:02.82] CHIP BACCIOCCO: So and he's a character. And you get a free hat. He sent me a hat.
[00:54:06.86] REID HOLZWORTH: I already have one.
[00:54:07.52] CHIP BACCIOCCO: Oh, yeah, you have a hat.
[00:54:08.30] REID HOLZWORTH: [INAUDIBLE] don't need more.
[00:54:09.29] CHIP BACCIOCCO: Good. Yeah.
[00:54:10.37] REID HOLZWORTH: He's a good friend.
[00:54:11.12] CHIP BACCIOCCO: He's a good guy. Bill Devine, have you had him?
[00:54:14.40] REID HOLZWORTH: I haven't had Bill. Bill is a good guy. He's really promoting the IA channel. And like you said, I mean, they're vested in [INAUDIBLE]. I actually know for a fact, a couple of carriers right now that are the opposite of that, pushing back because they want to continue to hold their position of everybody going to their portal. And so yeah, Bill has done.
[00:54:32.84] CHIP BACCIOCCO: Bill's done, yeah he has. And he's a real innovator. And he kind of sees I think well over the horizon. He'll give you that, where's the industry going to be in three or four years.
[00:54:42.41] REID HOLZWORTH: All right, last question Chip, what do you like to drink? Favorite drink? What do you like?
[00:54:47.31] CHIP BACCIOCCO: I just got back from Napa, which I had never done a multi-day trip to Napa in my life. I've been there for one day, you know, you're in San Francisco for business and somebody says, hey, we have the whole afternoon, let's drive over to Napa. It was our first multi-day.
[00:55:01.19] So if you ask my wife and what we spend money on, she will tell you that Cabernet is apparently my favorite drink. But that's not really true. It's just where some of the money goes. But actually a martini.
[00:55:16.88] REID HOLZWORTH: Oh, nice.
[00:55:17.93] CHIP BACCIOCCO: Again, back to my roots in the insurance industry, back when we actually had real martini lunches, like that actually was a real thing. I've never gotten over the glamour of a good vodka martini with two blue cheese olives. There's nothing better in the world. Now you can only have one or two and then you're, time to go to bed.
[00:55:38.33] REID HOLZWORTH: Like a lot of things, I'd say overall, that's my drink of choice.
[00:55:41.12] CHIP BACCIOCCO: Oh, OK, I didn't know that.
[00:55:42.20] REID HOLZWORTH: I'm a gin guy though.
[00:55:43.34] CHIP BACCIOCCO: I'm a vodka guy.
[00:55:44.15] REID HOLZWORTH: I like gin dirty, up blue cheese olives. You know, I've got to like blue cheese actually recently now, it's more just regular. I love a good martini.
[00:55:52.28] CHIP BACCIOCCO: We should have some sometime.
[00:55:53.84] REID HOLZWORTH: Chip, thank you for all the listeners out there. You see Chip out and about, buy Chip a martini. Buy him four martinis and see what happens though, fun night.
[00:56:02.93] CHIP BACCIOCCO: I would enjoy that.
[00:56:04.49] REID HOLZWORTH: Chip, thank you for joining, always a pleasure. And thank you for everything you're doing for the industry. You've done a lot. What a great career, man. You've done some really cool shit and continue to do so. So hey, producers out there, your availability sucks.
[00:56:18.65] CHIP BACCIOCCO: We're going to fix it. Sign up for Claim It. We're going to fix it. Thanks, Reid, I appreciate it. Great to be here.
[00:56:25.31] REID HOLZWORTH: Yeah, Thank you. Chip Bacciocco is an awesome guy, awesome friend, awesome family man, just good dude all together. He's one of those guys, that although I don't hang out with Chip all the time, he's not one of my best friends, but he's a good friend. I know that Chip would answer the phone and he would help, 100%, and drop what he's doing.
[00:56:47.56] I know myself to be that person as well. And us, as good people, helping others is what helps this industry. And it helps us, as real industry people, there's a lot of people that are part of this industry that I believe aren't industry people. And I think that the big eye is really investing in insurance technology and helping educate their force and help their force in that way.
[00:57:13.71] With all the stuff they're doing with TrustedChoice.com, with what they're doing with ACT now that Chris Klein has just taken the reins over there. Love Chris, spent a lot of time with Chris over the years. He's at Westfield, a breath of fresh air, really awesome.
[00:57:29.70] With Lou Moran taking the InsurTech Task force. Now the big I doing this InsurTech Summit that we are all just at and met a bunch of really cool people, was on a great panel with some really awesome people within our world, true industry people. Not all of them on the panel, I'm not going to name names, but most of them, but all knew their stuff. Let's say that.
[00:57:54.84] But yeah, really good. So they're really going after it. And they're not going after it because it's like something that the big I should be doing. It's because they really see that it'll help this industry and the brokers. I've spent a lot of time with those guys professionally, unprofessionally I guess you'd say, I don't know.
[00:58:21.00] It's true stuff. So you know, Chip has been in the industry a long, long time, longer than I expected, longer than I knew. And he knows a lot of people in this industry and has developed a really great reputation, all that said. And he's a good person. It was a pleasure to have him on the show.