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In this episode of The Power Producers Podcast, David Carothers and co-host Kyle Houck discuss how you can relate issues to your clients or prospects in defined terms, and how you can calculate the total cost of risk.

Episode Highlights:

  • David mentions that there’s a gentleman who’s currently recruiting for an insurance sales representative in his branded office. (2:00)
  • David thinks that most of the time when they get in front of their clients, we start explaining, and expect them to understand insurance jargon. (3:17)
  • David shares that a lot of people don’t do the total cost of risk, but if they’re going to do it, they must understand the calculations. (4:14)
  • David mentions that it’s significant to give those calculations to the client in a way that’s directly tangible to their business. (4:37)
  • David explains how to calculate the total cost of risk. (4:48)
  • David shares that he’s been in situations where he had clients that are over 100 million a year in sales that weren’t willing to give him the sales figures. (6:10)
  • David mentions that you should always go high on sales, and always go high on profit. (7:09)
  • How does David estimate their sales? (7:46)
  • David mentions a scene from Jim Carrey’s movie called, Liar Liar. (13:26)
  • David shares that every time he’s in a meeting, he always thinks about that scene. (13:36)
  • Kyle mentions that David has more experience in the insurance world than him. (16:22)
  • David shares that they use frequency and severity rates, for calculation. (18:07)
  • David mentions that when they do the Mod analysis, they’re relating to somebody in defined terms. (18:30)
  • Kyle mentions that you don’t get very much more defined than the ModMaster. (19:51)
  • David mentions that they’re in the process of placing subcommittees for each department. (20:48)
  • David shares that one of the subcommittees they have is on graphics, and they’re working on creating a proposal template for any kind of middle-market company. (20:58)
  • David mentions that from a service standpoint, you need to define what you’re going to do. (22:11)
  • David shares that the same big brokerages that are taking business from insurance salespeople are the same big brokerages they’re taking business from, every single day. (24:51)

Key Quotes:

  • “So you know, a lot of people out there don’t do a total cost of risk, I get it, we’re trying to change the world, one recovering agent at a time. But, you know, if you’re going to go in with the total cost of risk, you need to understand that calculation. But you also need to understand how to articulate what that calculation is to your clients.” – David Carothers
  • “It goes back to the difference between selling somebody a product and solving a problem. You’re going to tell them premium, but you’re not going to talk about all the other stuff because quite frankly in many cases, agents don’t know that other stuff in the total cost of risk calculation.” – David Carothers
  • “Setting expectations for clients is paramount. Because if you don’t set them, they’re going to formulate their own and they may not be even remotely close to reality.” – David Carothers
  • “What I’m going to tell you is customer service. It doesn’t cut it. Customer service is the expectation. If you can’t talk to people in defined terms that they can understand that relates to the sales and profitability of their business and give them results in an awesome client experience, you’re done. You will lose every single time.” – David Carothers
  • “The revenue that you lost by that account leaving you is the tuition that you are paying to never have to learn to never have to deal with this again.” – David Carothers 

Resources Mentioned:

The Power Producers Podcast where we are refining and redefining the sales game.

Kyle Houck