The Return on Zero is Zero
Updated: Jan 27, 2021
“A thing that is free is of no earthly importance.” -Will Rogers
Three Dimensional Training® is a premier educational program. Selfishly, I’d argue it is the premier educational program about insurance coverages. Yet, when I explain the cost, which is only $65 per person, per class if the class is full, people express dismay that quality education costs money. Some understand quality education should cost something – but not too much. I know other high-quality professional education services are having the same experience. Free classes seem to be thriving.
Why would anyone think that free classes or even extraordinarily cheap education has any earthly value? This is not a rhetorical question as a real reason exists. The reason is identical to the reason people who need insurance to get their driver’s license back, buy the absolute minimum limits. They could not care less about insurance. They want that card showing they have insurance so they can legally drive.
Agents who want free education could not care less about the value of that education. They want CE credits so they can continue to sell insurance even though they remain ignorant of what they are selling. In other words, they just want to sell insurance, they don’t actually want education that informs them about what they are selling, how to more fully address their clients’ true exposures, or provide clients with good cost vs. coverage solutions. These agents only call what they purchase “education” so that everyone, including their state’s DOI, feels better, but their “free” education is only a piece of paper expressing fake knowledge.
I suppose such agents fill a role as there are always bottom feeders. Technology will likely replace most bottom feeding agents in short order because technology can sell inadequate coverage for less money and even less insurance education. As bad as free education is, computers selling insurance don’t need any CE credits.
There is a middle class of agents who exist who want better education but may not know what “better education” is. Ever since CE was mandated, quality education has been in a downward spiral. Another unintended government regulatory consequence. Force education on all and quality diminishes quickly because the focus changes to getting credits instead of obtaining knowledge. More than a generation has passed since CE was mandated resulting in a large percentage of agents who don’t know what high-quality education is today.
I make these statements based on my E&O work. When I do E&O audits, I’m testing for people’s coverage knowledge. They have all their credits, many possess professional certifications, and yet their knowledge is often scarily limited. My observations are not spurious opinions.
For anyone wanting to find high quality insurance education, look at price tags. The class does not need to be luxury level pricing, but good education is going to cost a reasonable amount. Quality education is not going to allow you to occasionally hit a button on the webinar to prove you’re still awake. Quality education is not going to allow you to go through 60 minutes of credit in ten minutes. Just by staying away from these features, looking for live content or dense books, and paying a reasonable price will result in at least a decent level of education most of the time. Some readers may think I’m pointing out the obvious, but it is not obvious to a whole lot of agents.
The insurance industry is clearly transitioning to a lower cost transaction model with Insurtech carriers and agents focused on the low cost service center models being adapted by serial agency acquirers and brokers. Many studies around many industries, and just common sense, show that when any industry is moving to a low cost, transactional model, the only option for those who emphasize quality is to become a high quality, highly knowledgeable boutique organization.
For insurance distribution, this means one must know coverages and exposures and how to apply coverages to specific, not generic, exposures. One must know how to explain coverages to clients and to help clients understand their own exposures so they see the need to purchase applicable coverages. If you want to be that kind of quality agency, then market forces are such that investing in quality education is a must. Low cost, transactional free education is for transactional agents.
To be truly high quality, one also has to know the coverages they are actually selling rather than generic forms. One step further is understanding the difference between forms and how one may be better for some clients while another will be better for other clients. You can then help clients understand the differences and the price/coverage trade-offs. Not all customers will appreciate such personal touches, even if they need the advice. But quality advice requires quality education and typically high-quality advice results in more profitable sales thereby generating high ROI’s.
This brings me to my last point. To prove Will Rogers’ point, what is the return on investment when no investment is made? If you do the actual math, you’ll discover the ROI is always zero. His adage was actually a mathematical formula that is always 100% correct!
NOTE: The information provided herein is intended for educational and informational purposes only and it represents only the views of the authors. It is not a recommendation that a particular course of action be followed. Burand Insurance Education, Burand & Associates, LLC and Chris Burand assume, and will have, no responsibility for liability or damage which may result from the use of any of this information.