The $65K Wake-Up Call That Saved My Career

Your producers hit their new business number every year and still have no idea if they can retire, pay for their kids' weddings, or send them to college. That's not a motivation problem, it's a math problem, and most agency owners never do the math with them. 

Randy Schwantz breaks down the 3-tier goal-setting process that turns a vague commission target into a real savings number, then reverse-engineers it into the exact activity a producer needs every week to hit it. He'll tell you about the $65,000 wake-up call that almost cost him his family's future, plus the rule of 25 every producer needs to know before they retire broke. If your top producer is coasting on a goal that has nothing to do with their real life, they need this episode before they burn out and walk. 

If this episode was helpful, share it with a producer or agency leader who needs it. 

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Transcript

[00:00:00] Hey, when your producers are financially astute, they understand money, making money, saving money, growing wealth, they stay put in the [00:00:10] game. When they don't, man, they get burned out and they bug out. So in this video we're gonna be talking about kind of a 3D process, three-dimension process [00:00:20] to keep your producers in the game, keeping them financially on track with a target so that things become really good.

Welcome to the Agency Growth Machine [00:00:30] podcast, where it's all about transforming potential into profit. And now your host, Randy Schwantz[00:00:40] 

Welcome to The Agency Growth Machine podcast, where we talk about all things related to growing your agency, which is your number one biggest asset, the most important thing that [00:00:50] maybe you got going on in your life other than your family and your God. So let's get rolling

Now, this all started for me, and by the way, my name is Randy Schwantz. I'm [00:01:00] the author of The Wedge Sales book, developer of The Wedge Sales Call Process, and also developer of Bignition.io. Uh, it's the triple threat solution for agencies that want to [00:01:10] go drive middle market organic growth. Triple threat in that it's a sales training platform, a sales CRM, and a sales management platform all squished into one cohesive, [00:01:20] integrated unit, making it easy for you to go drive growth.

3D process to get producers deeply motivated in the [00:01:30] game, stay in the game, keep growing their books, and grow wealth. Okay, 3D. Here's kind of my backstory. A number of years ago I was down in Houston running a sales meeting, and a guy shows up [00:01:40] late. His name's Paul, and it was about 8:30. We started at 8, he shows up at 8:30, and he apologized.

I go... And I kind of looked at him and said, "Dude, are you okay?" He goes, "Yeah, I didn't get in until about 4:30 in the morning." [00:01:50] "Really? 4:30? What are you doing out so late?" He said, "Well, I just got through driving, you know, from Houston to Lubbock, put my daughter up at school, and drove all the way back, and it just took a lot longer than what I [00:02:00] thought."

I go, "Ah. So, uh, do you have any other kids in school?" And he said, "Yeah, this is my second." And I kind of go, "Well, at least the good news is it's all paid for, isn't it?" And he kind of ducked his head and did this thing. [00:02:10] Now, Paul at that point had about a three-quarter million dollar book of business, which means he made somewhere in, like, the 30%, that'd be $250,000.

At 40%, it'd [00:02:20] be $280,000. So he's making a really good living. But he also had a really good lifestyle. Annually with a spouse and two kids, living the good life down in [00:02:30] Houston. It appears he might not have prepared as well as he maybe should have. So that got me thinking that morning, 'cause at that point I had a [00:02:40] six, a four, a two, and a newborn.

All girls. And I was thinking, I, I have no plan for them. I have no plan for their college and their cars and their weddings and all that [00:02:50] kind of stuff. So I come back to Dallas, call up a financial advisor, invite the guy, guy over. A couple of weeks later we're sitting around my, my glass, uh, table around in the kitchen, and he asked me, you [00:03:00] know, like, "What are your goals?"

And he could see my, my leg, man, it was just bouncing. He could see it through the glass table top. As he looked at me, he said, "W- what are you nervous about?" I'm like, "I don't know, man, it's just, it's just a lot of pressure." [00:03:10] So he said, "Well, tell me, what are your goals?" I said, "Well, I got a six, four, two newborn.

I gotta buy four cars. I gotta pay for four universities. I gotta pay for four weddings, and I gotta fund a [00:03:20] retirement, and I have no clue how much money I need to make or save or anything to be able to accomplish that." I honestly had no clue and had no plan. [00:03:30] So he gets out the 10-key or 80-key HP calculator, and he starts punch, punching buttons.

Took him about five minutes, and he writes on a piece, a yellow pad, [00:03:40] "$65,000 annually," and he holds it up to me. He said, "Randy, to accomplish what you said you wanna accomplish, you've gotta save $65,000 a year for the next 20 [00:03:50] years." Ugh. And I kinda threw up because at that point in my life, honestly, I was able to save about $7,500 a year [00:04:00] after, you know, housing, mortgage expense, you know, medical insurance, utilities, couple of car payments, kindergarten, and everything else you [00:04:10] can imagine.

Man, I started thinking about it, and then, and to be honest with you, I got a little depressed, uh, for probably about 45 days. And then I had read that book, The Road Less Traveled. You know, you got [00:04:20] the high road, the low road. Low road is where everybody goes. High road is where, you know, you make a decision, and I just knew that couldn't let my family sacrifice, so I had to get on with my game, and so then I did.[00:04:30] 

I got fired up and went to work, and things have turned out pretty well. But I bring this up because I'm asking you the question. How many of your producers honestly [00:04:40] know- to the dollar or to the $500, round up by 500 bucks, how much they need to save every year to fund [00:04:50] for the kids' cars, the kids' university, the kids' weddings, and their own retirement.

Now, here's the interesting thing, if you're a producer [00:05:00] watching this, you need to have about 25 times whatever your annual expenses are when you retire in your retirement account. So if you [00:05:10] wanna live on $100,000, you need a $2.5 million retirement account. If you wanna live on $150,000... And think about this.

If you're a young dude, like in your [00:05:20] 40s, and that's 25 years from now, and you're living on $200,000 a year now, well, by the time you add inflation, all that sort of stuff to it, and yeah, you'll get [00:05:30] maybe a little bit of Social Security, maybe you'll get something else, I don't know, but when it's all said and done, whatever that net number is, you need 22- five times that number, not today's number.[00:05:40] 

I've asked literally thousands of producers. I generally start off with, "What's your new business commission goal?" And they'll give me a number, and I'll go, "How'd you come up with that?" And they'll make up some lame [00:05:50] excuse. It was interesting that on one of my Monday mastermind calls just this week, one of my sales leaders was on the phone, and he was talking [00:06:00] about how he had to go make the rounds, he's got about 35 producers, and go tell them what their assigned new business goal is, because [00:06:10] that's how he does budgeting.

That's how he... You know, they drive to make sure they're gonna meet the, the financial budgets of the firm as well as the, the budgets and the commitments they've got to insurance carriers. [00:06:20] But that number has absolutely nothing to do with your financial needs. When somebody assigns you a new business commission goal, you gotta ask the [00:06:30] question, is that gonna help you fund the kids' cars, universities, weddings, and your own retirement?

In most cases, the answer is not even close. Not even close. So when I think about a 3D or 3 [00:06:40] Tier goal-setting process, it all starts off with, is really mapping out your career. And over your career, over the next 20, 25 years, however long you're gonna be around, you know, you're putting in the cars, the universities, and the [00:06:50] weddings for all the kids, you're putting in your retirement number.

And then that will, will come back to you, and that will give you a how much I need to save every year Now, for a lot of people, that's gonna be [00:07:00] overwhelming number. There's a lot of people watching this that probably need to be saving, like I did. I had to save $65,000 a year, and that's a 22-year-old story, almost [00:07:10] 25-year-old story.

So I could imagine that if you have, say, three kids and they're relatively young, you probably need to save 65, 70, 75 or 80 to [00:07:20] accomplish what you wanna accomplish. And so then most people are funding the 401, patting yourself on the back, "Oh, I'm doing a good job, doing a good job." But the reality is you're grossly underfunding your future like [00:07:30] I was.

I was underfunding my future $57,500 a year. It's like the national debt. So number one, get clear on what your annual savings goal is. [00:07:40] Then our second tier is we help people break it down to four-year action plan. Here's what's interesting about a four-year action plan. If you need to go from saving 20 grand a year to 80 grand a year, [00:07:50] then you sit there and think about it.

I gotta grow up by 60. I gotta grow my savings capability by 60 over a four-year period of time. I gotta increase it by 15 grand a year. And if I can increase my [00:08:00] savings capability by 15 grand a year, four years from now I'll be saving my 80 grand a year. I sustain that for a period of time, I'm gonna be wealthy.

So then you sit there and think, in order to save [00:08:10] 15 grand, I gotta get paid 25 grand. So I get paid 25 grand by my agency. I pay Uncle Sam 10 of it. I get to keep 15, right? So now [00:08:20] how do I make 25 grand? Well, I mean, it's pretty easy really. If you write $100,000 and you get 25% commission, I'm just making [00:08:30] numbers easy, there's your 25 grand.

25 grand, you pay Uncle Sam, you got 15 left over. So if you sit there and grow by $100,000 four years in a row, you can go from [00:08:40] saving 20 to saving 80, and then you stay on that path for a period of time, you're gonna be rich. You're gonna be wealthy Now, if, if you're an agency [00:08:50] owner, if you're not helping your producers think through this, then chances are they get kind of dogged out, they start to kind of take it easy, they get content [00:09:00] because they're making a living, and they and their spouse are kind of funding the 401if the spouse is working, and they feel like they're doing pretty good.

But they're missing the boat, and part of that's on [00:09:10] you, and, and both of you suffer. They suffer 'cause they could be doing so much better. You suffer 'cause your agency's not growing like it could. So tier one, get clear on your savings goal. Clear two, [00:09:20] break it down into a four-year action plan of what you have to do to be able to grow to go get that.

And then, then tier three is now you turn it into a 12-month action plan. And that action plan, I mean, you're sitting [00:09:30] there going, "Okay, I want $100,000 net growth. I got a half-million-dollar book, and I got a 95% retention rate, so 5% of half a million [00:09:40] dollars is $25,000. So I gotta make up fi- 25,000, add that on my 100, so now my new business commission goal, 125."

Piece of cake. I mean, literally, piece of cake. I look at the, my top [00:09:50] 20 accounts, and the average account size, probably 20 grand. I divide that into 125,000. I gotta write six accounts this year. Then I look at my closing rate, my qualifying [00:10:00] rate. That tells how many appointments I need. And then I go look at my effectiveness rate on either making cold calls or working right on introductions.

That tells me what my activity needs to be. So now I [00:10:10] know how many appointments I need to set. I got my qualifying rate, my closing rate, my average size account, and now I've got my new business commission goal. And I think of those [00:10:20] as your top five KPIs. And in Bignition, we've taken, we've broken all that stuff down.

We've broken down the three-tier goal-setting process. As you do the goal-setting [00:10:30] process, it shows up as the five KPIs in the front. So if you're an agency owner or leader, and you wanna drive this kind of growth in your agency, it's all there. I [00:10:40] make it as simple as possible. I make it simpler than anybody else on the planet because I've thought through this with you for years and years and years, and I've experienced it myself.

When you do, [00:10:50] now your producers have reason and purpose to go make it happen, because what kind of producer worth their salt doesn't care about their family? [00:11:00] And now you get to help them do it, and then what happens is, one of your fears might be, "Well, what happens after firs- year, four years? Do they quit producing?"

No. In most [00:11:10] cases, now they've gotten used, they're in the habit, they got their flow, they got their, their routines, and what they do is then they just keep on doing it. And what they do is, is now you [00:11:20] go from saving 80 grand a year to now the, the go, kinda save 120, because if I could, I could retire at 50, I could pay off my house in 10 years, uh, prepay for everything [00:11:30] buy my second cottage, all that kind of stuff, right?

That's the power of it. So look, if you want a motivated sales force, a group of [00:11:40] producers, show them you care about them by taking them through some amazing goal setting. Make it about them, not about you. Don't be like my friend who has [00:11:50] to, you know, give everybody a c- new, new business goal, and there it is.

Be like my other friend who makes it all about the producers. Get them really [00:12:00] clear, and watch your agency just blow up in a very positive way. Hope you hit the like button, hit the subscribe. I'll be doing more episodes. If you're one of those agency owners that you're sitting there [00:12:10] going, "I want to rapidly grow my agency," and you're looking for a whole platform, again, we call it Bignition, the triple threat, sales training, sales CRM, sales managed deal, [00:12:20] all put together in one thing, then reach out to us.

That's why we're here. All right. Have a good day