Got a guilty pleasure?
I’ve got more than can be covered in a month’s worth of blog posts, but one of my favorites is one of those reality TV shows. The kind where you watch some folks living their day-to-day lives, trying to get ahead, and arguing with each other.
No, it isn’t Real Housewives of Hollywood.
Thar’s Gold in Them Hills
Gold Rush is now in its 6th season on the Discovery Channel.
The show follows a few different gold mining operations in the Klondike. These aren’t lone prospectors wandering with a shovel and a gold pan. No, these are big operations using heavy equipment.
A typical operation includes 6 to 10 large pieces of equipment: dozers, earth movers, dump trucks and the machine used to collect the gold, the wash plant. In addition to the investment in equipment, these operations can consume hundreds of gallons of gas & diesel per day.
Big boys playing with big toys.
What’s not to like?
Because these mining claims are so far north, the season is dictated by the weather. Operations only run from late spring until the end of fall. Which means from June through the end of September!
On average, about 125 days to either make it or head south broke.
To the miners advantage, it’s the land and season of the midnight sun. These guys and gals work around the clock. But water is a key part of the process; when temperatures are too low, everything stops.
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Get the Gold
Contrary to what you may have seen in the movies, the gold these miners are finding isn’t golf ball or even pea sized nuggets. Most of it is sand-sized flakes or smaller.
Gold bearing dirt and gravel (paydirt or just pay) is dumped into the wash plant. This big machine shakes and screens the rocks ever finer. From boulders to fist sized to small rocks.
Finally, the remaining gravel and dirt are washed with water. Gold is so heavy that it sinks to the bottom of the wash water and is collected in screens and fibrous mats.
After a few days of processing pay, it is time for the clean-up. The mats are taken out of the wash plant to collect the gold. The silt is washed out of the mats and then washed yet again to get rid of any impurities. The gold is then dried for weighing.
The ‘reveal’ is when the gold is carefully poured onto the digital scale, and the mining team gets to see how much their effort has produced.
Sometimes there are hearty high-fives all around. At other times, the group is somber, realizing that days of hard work haven’t even paid the cost of getting the gold out of the ground, much less providing some profit (and salaries) for the team.
The scale of the operations is staggering. A rule of thumb says you can make a profit if there is at least $ 10 of gold in a cubic yard of pay. A full-size pickup bed will hold about two and a half cubic yards, or $ 25 if the pay dirt is good.
Last season, one mine processed over 100,000 pickup trucks worth of pay dirt for an end-of-year total of over $ 3 Million in gold.
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Unfortunately, all of that good pay isn’t sitting there waiting to be piled up and washed.
First, the miners have to scrape off all of the vegetation on their claim. Then they need to remove the top layers of soil to get down to the pay dirt. The miners spend considerable time, effort and expense just to get to the good stuff.
Those top layers of soil have gold in them, but not enough that it is economical to mind. This soil, called overburden, must be removed in order to get to the richer substrate that is hauled to the wash plant.
It’s part of the process. There is no rich pay dirt, and thus no payday, unless you first take care of the overburden.
Overburden in Insurance?
In your digital marketing efforts, are you focusing on the overburden or the pay?
Over and over again Agency Nation hears the following concerns like these from agencies who regularly receive digital marketing opportunities:
- The insurance buyers only focus on price;
- They are are only tire kickers;
- They have losses;
- They are all XYZ types of risks and completely unwritable.
It’s akin to our miners saying,
Well, the overburden is only worth $ 2 per yard, so let’s ignore the paydirt below it.”
We’ll take each of these, one by one.
Price is a topic Agency Nation has addressed a number of times. Our well-financed competition, the Direct Writers and Captive Agency companies are spending big bucks trying to convince buyers that the only thing that matters is price.
We know that isn’t the case, but until you can prove that you are competitive, you aren’t in the game. Prove that you can compete, and then you may have an opportunity to show why the cheapest isn’t necessarily the best, and possibly might be the worst.
Tire kickers are buyers. They just haven’t made a decision to purchase yet. The good news is that your digital marketing efforts have convinced them to contact you. Now it’s time to show the value your agency provides and convince them to stop shopping and start buying.
Losses. The odds are pretty good that your existing book has losses too. Losses are why we’re in business. Prior losses don’t mean that an account is unwritable nor does it mean that the risk is bad, but they also can be a warning sign.
Of course, there are accounts that aren’t writeable because of class, or any one of a hundred other reasons.
But there are also MGA’s and Wholesalers who provide all sorts of coverage for difficult to place risks. Sometimes a commission check is waiting for the agent that does a bit of research and makes an inquiry with a wholesaler or two.
The good news is that not every customer that will call will be difficult, and some will be the clients of which dreams are made.
Long Story Short
Everybody likes a strike-it-rich-quick story.
Every now and again they actually happen. But most of the time, fortunes are made through diligence and hard work.
When you mine gold in the Klondike, you need to strip a lot of overburden to get to the gold-rich pay.
When you do digital marketing in insurance, there are some opportunities that will come your way that won’t be squeaky clean. There might be some that are difficult to place. There may even be one or two that you can’t help.
They might be additional effort for not a lot of premium, or commission. In other words, low-grade pay.
But if you work your way through the layers of ‘insurance overburden‘, you’ll find that every now and again the ‘paydirt’ will be worth well above $ 10 per yard.
And your successful clean-up will be sweet indeed. All the more so because of the work you put in to position yourself to get that opportunity.