Altig Orlovic Agencies with American Income Life

Phil’s Memo 5/30/2012

Success is going from failure to failure without loss in enthusiasm.             

  –Winston Churchill                                                                                                                                                             

It’s graduation week in many parts of the country. If they aren’t wearing the cap and gowns this week; it might be the next. All the chipper graduates walking across the stage, getting their 8 X 11½ piece of paper. An inspiring speaker stands up and gives them the rah-rah-rah and sends them on their way. That’s why an article entitled “The Most Honest Commencement Speech You’ll Never Hear,” caught my attention. Sounds more raw-raw than rah-rah, but maybe she’s onto something. The speaker is Lisa Bloom, an attorney, television commentator and author of books such as Think and her latest, Swagger.

She cited a new poll that gave young people a menu of jobs and asking them which was their first choice. #1. CEO of a major company like General Motors. #2. A Navy Seal. #3. A US Senator. #4. The President of a prestigious university like Harvard or Yale. #5. The personal assistant to a very famous singer or movie star. She had recently been having conversations with young people so she was apprehensive to see the results; they were worse than she had thought.

The top choice? With 43% percent of the people picking it? The personal assistant to a celebrity. This is usually a lower paying, tedious job involving getting coffee, picking up dry cleaning, and answering phones with little hope of advancement. 24% picked the University president. 14%, the senator, 10% a Navy Seal and 9% the CEO. And as she walked around asking new graduates what they wanted, an alarming number of them are saying, “I just want a job.”    Employment rates for young males in the United States is currently the same as Arab Spring countries: 18 to 25%.

The first thing we must do as a society, according to this commencement speaker, is each take responsibility for our role in this situation. She points out that this is the first group in American history to be less educated than their parents. We have not kept the cost of education affordable. As a result, most people are shouldering either demanding part-time or full-time jobs to try make it through college. They are also dropping out at a record pace, citing “the need to work and make money” as their top reason for giving up on that dream.  A television producer had just asked her to host a new reality TV show:  Jobless young men sleeping on their parent’s couches. She declined. “Very few people want to live this way,” she contested. “Do you know how many jobs are out there?” We have let standards slip. Today, you, the young person, are who is walking uphill to school both ways in the snow, according to this speaker.

The speech was great.She’s right on many counts. The only problem I see is that she isn’t or can’t do anything about it. We can. How can we change a generation and point them the right direction? Let me jump in: 1. Offer them a family wage job where they can do something useful and meaningful.  2. Show them how to develop skills and instill proficiencies and abilities in their lives that they will use until the day they retire.  3.  Walk beside them until they are successful, and then check in regularly. What is successful? Get them to their third 15% bonus. Then you know that you’ve infused something valuable and important into their lives.  Make a difference in someone’s life this week.

We’ve been looking at “Yes” companies. And this week, we’re unpacking a crazy little coffee company named Starbucks. Starbucks is a “Yes” company. They get you to say “Yes” to a $4 cup of coffee, (many of you every stinking day!Why would you say “Yes” to a $4 cup of coffee when you can buy instant that makes about 80 cups for that same $4?

First of all, you have to ask the question from the other direction. Most business with a very common product, like a cup of coffee, will ask, “How much can I charge for this cup of coffee?” Howard Schulz, the founder and CEO of Starbucks, looked at the situation differently: “How can I get people to spend $4 (when the actual product they are getting is available for $.50 or $1?)”  The answer came in about 5 different places. Remember, the solution to your problem is usually made up of 4 or 5 different parts. One of the biggest mistakes in leadership is looking for one thing to solve your problem: the proverbial silver bullet. The silver bullet usually doesn’t exist. Broaden your thinking. Here’s Starbuck’s 5-part answer:

#1. Create an experience. People will pay much more for an experience than a product, especially in the 21st century. Vacations aren’t vacations anymore, they are alternative life experiences; church isn’t church, it is a worship experience. People want experiences and so Mr. Schulz created an experience that greatly contrasted and surpassed any other cup of coffee that people could buy. From the modern, yet inviting, exterior façade, to the color and design. The sounds of hip music, the smell of different premium coffees, to the whir of the espresso machines; it was different, and people liked it. The labels and verbiage were exclusive. It’s not a large, it’s a grande. He even made standing in line enjoyable. When you left Starbucks, you felt good. You’ll pay more to feel good.

#2. He created community. The layout of Starbucks is designed to allow you to stay, lounge around the comfortable chairs; hook up to free wi-fi; to meet your neighbors and co-workers. Taking a page from the pub or nightclub scene, he created a hang out, except for the daytime. From 6:00 a.m. to 6:00 p.m.;  then you could go to your evening community spot. And he was able to one-up it. For $4, you not only received a great cup of coffee, but he made it say something about YOU:  You are someone who knows what they want and won’t settle for less.  It almost became a status symbol. The place to meet.  The cup to hold.  The brand to associate with. For ONLY $4. You might not be able to afford a BMW or a Louie Vitton, but everyone can give up$4 for a cup of premium coffee.

#3.  And this also goes along with community. Starbucks has aligned itself with greater global causes. From saving rain forests, to child labor, to world peace, Starbucks is active and vocal about making the planet a better place. People resonate with that. Yea, maybe my coffee costs $4, but some of that goes to helping other people, and I’m all for that. They are also connected locally to helping people in their community. And by drinking Starbucks, you help and promote that. Suddenly, it makes the price tag a little more palatable. Does a large percentage go to charity? Probably not. I’d be shocked if $.50 out of every $4 went to charity, but just the fact that some of it does hits a place in people’s hearts. Next week, we’ll look at the last two reasons, and start applying the principles to our business.

#1.  Washington. They are coming in strong. $42,368 in new agent production. New agents in Washington are closing 22% at over $1,000 a sale, that’s solid.They are selling every kind of lead. Redmond topped $25,000 just in ALP just from people in their first six months with the company. Outstanding.

#2.  Hawaii is rising again. They were often tops in TOTAL ALP, and I figure it wouldn’t take long for them to again make a run for #1. $39,000. 24% closing, over $900 a sale. Don’t wait until someone’s been here a year to get them up to speed. That’s getting them right out the chute. They have 9 solid offices so that is a template for the rest of us.

#3.  Minnesota.  $32,497. Their new agents brought in 708 referral cards. That’s not only responsible, that’s creating a renewable resource for everyone there. Edina leads the state with Chad Deley and Eric Labossiere’s MGA-ships each pulling in over $10,000 in new ALP.

#4.  Virginia. A couple ticks shy of $30,000. Virginia Beach, Manassas and Richmond all had over $8,500 in new agent production.

#5.  Manitoba. $26,500. Well over $1,000 ALP per sale. They’re putting all our excuses to shame.

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This entry was posted on June 4, 2012 by in Phil Folkertsma.
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