Efficiency Almost Killed my Close Rate

A few years ago, I made a mistake that cost me a lot of money and taught me a lesson I still think about.

I thought I had figured out how to scale my agency.

The idea was simple: Use non-licensed team members in Colombia to gather all the quote information upfront. Have a separate non-licensed quoting team run the quotes. By the time a licensed agent got involved, all they had to do was call back and present.

On paper, it was brilliant. Maximize non-licensed labor. Minimize licensed labor costs. Increase quote volume.

In reality, our close rate dropped to 10–15%.

What went wrong

The "efficient" model removed everything that actually mattered:

No rapport built during discovery
No real pre-qualification, we quoted people who were never going to buy
No education until the very end, when it was already too late
Clients felt processed, not helped

We were moving faster. We were also failing faster.

When we shifted back to having a licensed agent handle the first conversation, even though it costs more, our close rate climbed back up. Today we're back to 34% and still working toward 50–60%. (Hopefully, as we enter the soft market)

The difference? That first conversation.

A licensed agent can build trust, ask better questions, spot red flags, and start educating before a quote is ever run. That's where the value is created.

The same trap with technology

I see a lot of agents asking about adding "quote and bind" to their websites. Let the consumer do it themselves. No phone call. Maximum efficiency.

I get the appeal. But I think it's the same trap.

If someone can quote and bind without ever talking to you, what value did you provide? Where was the education? Where was the discovery that uncovers what they actually need versus what they think they need?

In our industry, the conversation IS the product. It's where confused policyholders become informed insurance buyers.

Skip that, and you're just competing on price with robots.

The thought process I go through now

Before implementing any new tool or process, I ask two questions:

Is this effective? (Does it create the outcome we actually want?)
Is this efficient? (Does it get there faster or cheaper?)

If it's efficient but not effective, it's a trap. If it's effective first, then I look for ways to make it efficient.

We live in a world of AI now

AI and automation can do incredible things, but they amplify whatever you already have.

If your process creates value, technology makes it faster and better. If your process skips the hard parts, technology just scales the shortcut.

I learned this the hard way with a 10–15% close rate.

Effectiveness first. Efficiency second.

Final Social Post (for reference)

If you don’t follow me on social media or missed this post, I wanted to share the post for reference on what prompted this newsletter article today.

“We're in the age of AI, and I think a lot of people are confusing efficiency with effectiveness.

You can be extremely efficient at doing the wrong thing.

As an agency owner, AI can help me respond faster, automate follow-ups, and crank out quotes for my clients, but if my underlying process is broken, all I am doing is scaling bad decisions at lightning speed.

At Foresight, we don't implement more technology for the sake of technology. We fix our systems and processes first. Then we let the tools make those systems faster.

Speed doesn't matter if you're doing the wrong thing.

Effectiveness first. Efficiency second.”