Altig Orlovic Agencies with American Income Life
This month’s issue of Forbes magazine ranks the largest companies in the world. They are famous for their Forbes 400, where they list off the 400 largest companies in America. Now they widen the net. They look at the whole world. It’s called the Global 2000, and features the leading companies on earth. Profits, Assets and Market Values are all taken into consideration. By the numbers: Torchmark has $3.4 billion in sales, $17 billion in assets, including $12 billion in cash on hand. That ranks them 1,388 in the world.
You can pull up their stock performance since they went public. Over the past 10 years, their stock has been up 167.23% (that’s 16.7% non-compounding). Last 12 months, they are up 8.5%. Solid results.
What does that mean to you? Couple things. One is that you work for a large conglomerate. That doesn’t mean that it can’t trip up. JP Morgan Chase, one of the largest banks in the world just came out with the news this week that some baboon in their investing department just lost $2 billion in trading. And I thought the Seattle Mariners made some bad trades. But it does mean you have the resources to withstand quite a lot. When you go out and represent American Income Life products, you are saying that they will be there for that family, whether that’s 4 weeks, 4 years, or 40 years away. Nothing in life is guaranteed but you can do so with complete confidence.
It also means that you’re not working for a company that is constantly cutting things. My background is in accounting and I’ve been at those meetings. All the financial statements are run and the boss comes in and says, “Sales are down 10%, we need to cut expenses 10% across the board.” So you go through everything. I mean everything. The first 3% is easy. Cut a few lines, no overtime, the company picnic goes; anything that’s nice and convenient but you’ll survive. Up to 5%. Okay, now we’re feeling it a little. By the time you hit a 10% cut, people are usual getting laid off, departments are getting downsized, and major development projects are getting put on the shelf. Some of that, you feel immediately; some a year or two down the line. Torchmark and American Income Life aren’t cutting. In fact they are expanding, increasing and modernizing. Right now, they are up to 200 people committed to technology. That’s e-apps, CAS improvements, data flow improvements and other applications to make sure all Torchmark companies are on the cutting edge of information resources. Bonuses are up. Training and leadership development are upsizing. Convention this year is in Punta Cana. You feel it everywhere.
Here’s one last thing. You can financially invest in your and the company’s success. Put yourself on a stock purchase program with Torchmark. If you had put in $75 a paycheck in Torchmark stock for the past 10 years, you’d have $104,220 in the bank 10 years later. That’s not a guaranteed return but investors will tell you that insurance companies and life insurance companies in particular are one of the most stable stock investments you can make. Would you miss $75 a week? Would not even faze you. That’s a decent dinner. Would $104,220 in the bank right now change your life? You bet it would. There are lots of advantages to working for a winner. Take advantage of all of it.
Speaking of top companies. Last week I told you I’m starting a series on the most important word in business. It is the word that all the world’s top-rated companies have mastered. Every year, magazines always come out with the best companies. Not necessarily the biggest (yet) but the best. The most respected, most loved and highest performing. It will only be a matter of time before they are the biggest. Costco. Starbucks. Amazon. Nordstrom. Microsoft. They invariably make the list. Interestingly, they are all headquartered a few miles from each other around downtown Seattle. Is that a coincidence? I thought about that question for a while and I don’t think so.
Here’s what I believe happened. There are really only two major business schools (graduate) in the Seattle area: The University of Washington and Seattle University (Seattle Pacific has recently joined the party). And this list of companies often sent their executives and managers to these incubators. About 50% of the students came from Boeing and these type companies. They were all learning from the same teachers, feeding off of each other, and immersed in the same culture. They were all learning the most important word in business and how to get to it. And that word is…”Yes.”
While most business programs were teaching efficiency models and traffic algorithms, many of these guys were being schooled in the power of yes and how to get to “Yes.” Not what is and isn’t possible but how to make anything possible. Understanding people and the human psyche so that both sides can get what they want.
Is that a tough order? Absolutely. You don’t always know what is going to come your way and what the reactions may be. You might end up having to do something very difficult. And one of the most difficult things this will require is the eradication of fear. How did they do it? And what can we learn from their example to help our own businesses? Let’s pull some of these leading-edge “Yes” companies apart and see if we can apply what they’ve learned in our environment.
Let’s start with Costco, taking you back to 1983. Costco originally started as two companies: Price Club and Costco. Their first two years, they lost $750,000. They would have other failed attempts. In 1988, they closed their Midwestern stores to concentrate on the west and east coast markets. Many would have quit or scaled way back; they believed in their business philosophy and pressed forward. What is their business philosophy? It is the ability take anything (except electronics) back any time before the product expires. They give 90 days on electronics. Anything? You bet. I’ve take stuff back after 6 months. No problem. I once had a guy in front of me bring back some mat that looked like the dog had chewed off the corner. I almost stepped in, that was over-the-top ridicules; to try make the store give you your money back. Oh, but Costco took it back.
Can you imagine sitting in the strategy meetings to launch Costco and one guys says, “Let’s have a policy where we take EVERYTHING back.” Without questions. It was probably the crazy marketing guy. And of course one guy has to object, “People will take advantage of that. We’ll be flooded with returns.” They’ll buy anything knowing that they can just return it, without even giving a good reason. Yes. And that is the power of a “Yes” return policy. Read that bolded sentence again and maybe a light-bulb will come on.
They keep cost low by having warehouses, skylights, and not bagging people’s merchandise. They keep it simple by only carrying 3,000 to 5,000 products and rarely offer multiple competing brands of the same thing. Though they never mark any product up more than 15%, yet they still are incredibly profitable. But since people can buy without risk (you can always take it back), they say “Yes!” more often. Costco is now the seventh largest retailer in the WORLD. The average store sells about $150,000 and it’s not unusual for them to retail $200-$300 million out of one store. That is the power of “Yes.” Start looking for daring ways that you can say yes in your business today.
#1 territory: Washington. $44,665 in new agent production. 24% closing and $859 ALP per sale. Those are close to tenured agent numbers. Yes. Couple things are happening. One is that the laptop is the great equalizer. You can throw up big numbers in your very first week. Secondly, they are training their people well on the laptop. Good systems and good training makes for great results.
#2. Minnesota. $30,691. Chad has had one of the largest states in the country, and now he is building and re-loading again. That’s the kind of talent this executive has. They turned in 720 new referrals this week so he is building a very sustainable business model.
#3. Hawaii. They’ve always dominated the total production slot. Now they are building up a new generation of leaders. $27,487 in production out of just the agents in their first 6 months in the company. They lead the company with 10 offices and 90 coded people. Hilo, on the big Island leads the state with 16 total agents and $10,930 in production out of their new people. They closed 32% and averaged $1,214 in ALP per sale. As a state, they came in right around $1,000 a sale.
Manitoba $26,302. They province as a whole is consistently tossing in $50,000 in premium. Nevada. $24,329. 29% closing and over $900 a sale. Fantastic. California. $22,367. Total production was $84,000 but remember, we’re looking at who they’ve recently hired and what those new hires have done. Is it a little bit of “what have you done for me lately?” Welcome to the 21st century. Don’t care about the last century’s victories. What have you conquered recently?