The Most Expensive Data Breach You’ll Ever Have

By | October 5, 2020

Last week, a producer in one of my classes was distracted beyond belief — fidgeting with his mobile device, sending emails, and texting. As happens to most of us when we’re nervous, his leg was shaking like a tree in the middle of a Texas thunderstorm.

I tried to get his attention twice, to no avail. So, this time, I screamed, “Bob, what the hell is going on over there?”

He looked up with a sordid frown on his face and said, “Someone hacked my bank account.”

“Oh man, I’m sorry. How much did they get?”

“About $600 so far,” which to him was more than beer change.

“But, I think I have it under control,” Bob reaffirmed himself.

That is a breach. Someone broke in, took Bob’s money, and left. But it’s nothing compared to the data breach most agency owners suffer every year.

When someone doesn’t observe a law, agreement, or code of conduct, it’s a breach.

By definition, when a producer doesn’t enter prospects into your pipeline system, that is a data breach.

You’re probably laughing and thinking, “Randy, that’s not a data breach. That’s just producers being producers.”

Right, and when a Russian hacker bores a hole through your firewall and steals your money, you’ll say, “that’s not a breach, that’s just Russian hackers being Russian hackers.”

So why is this the most expensive data breach you’ll probably ever have?

In economic terms, it’s pretty simple.

When you don’t have valuable data from your producers’ pipeline, you have to listen to B.S. litany:

  • How hard they work.
  • All the great things they’re working on.
  • All the calls they’re making.
  • How they will “absolutely” make their numbers.

The problem is, you have no way to validate, verify, or substantiate any of it until it is too late.

It’s not until they miss their quarterly goal, then their annual goals, then their decade goals, and ultimately their career goals, that it’s too late.

You categorize this in your mind as not necessary, just a nice to have. But when you dig deeper, this costs you not just thousands of dollars every year, it costs you millions over your business’ lifetime.

The irony is you pay $50,000 to $100,000 a year to make sure someone is managing your accounts receivable and accounts payable along with updating your P&L.

Nice job! You’ve done a great job of recording and reviewing the past. We know, only a fool would argue against doing that.

But you flunked the test of managing your future because of the most horrific data breach possible.

You made it okay for your producers to tell you, “Kiss it, I’m not putting my data there.”

You say, “Not a problem,” but your sales meetings are becoming even more lifeless.

And your administrative assistant scowls every Friday when you say, “Need that pipeline report for Monday’s meeting.”

Because she knows it’s code words for “Track down every producer and ask them to update the spreadsheet.”

The problem with the spreadsheet is simple — it’s naked.

Most agencies update their spreadsheets with:

  • Name of the business;
  • (Maybe) a buyer’s name;
  • Potential revenue (probably premium);
  • One line of poorly written notes;
  • No information about the incumbent;
  • No information about the risk.

There’s nothing you can sink your teeth into, and it drives you mad.

You get to the sales meeting on Monday morning and review the list with the team.

“Charlie, let’s go through your stuff. You’re working on the Texas Roadhouse restaurant. How’s it going with them?”

Charlie has a vivid response, “Pretty good.”

You ask him, “What do you think of your chances of closing this?”

Charlie states, “Probably better than 50/50.”

You confirm, “Do you have carriers lined up?”

Charlie verifies, “Yes, sir.”

You ask him, “Need any help?”

Charlie ends with, “No, I think we’re good, sir.”

Then you repeat the same motions with the next producer.

Would the meeting be more useful if you had data to strategize how to win the deal together? Would it be more beneficial if your producers captured your competitors’ proposals and put them in your system?

That way, you could then quickly review them and see just how great, or sorry, the competition stacks up.

Would the sales meetings be more effective if instead of the “kiss it” attitude, your producers shared information on their competitor’s agents to figure out how they can stand out?

Would it be more advantageous if they knew whom the incumbent was so that you could help your producer win by broker of record instead of quoting on the account?

Would you feel more in control of your producers if their goals and accounts sold were in your data system, so you could instantly review their progress with these goals?

I’m sure you think this is foolish and that it’s overkill. But I’m 100% certain that Bill Belichick, Nick Saban, and Mike Krzyzewski couldn’t run their organization without player data. I’m 100% confident that Tiger Woods, Phil Mickelson, and Jordan Speith wouldn’t be caught dead without their humidity, wind direction, and stimpmeter reading data. By definition, data is facts and statistics collected together. It’s the antithesis of B.S.

About Randy Schwantz

Schwantz is founder of The Wedge Group. Phone: 214-446-3209. Website: Email: More from Randy Schwantz

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Insurance Journal West October 5, 2020
October 5, 2020
Insurance Journal West Magazine

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