Alex Scott: Got it. Thank you.
Stewart Ellis: Okay.
Operator: Thank you. Our next question comes from the line of Tommy McJoynt with KBW. Your line is now open.
Tommy McJoynt: Hey, guys, thanks for taking my questions. How do you think about the sales and marketing spend going forward? And if you could touch on how does the growth and the builder JVs impact your sales and marketing spend? Is it fair to think that the relative amount of sales and marketing spend will need to be less as that builder channel grows?
Stewart Ellis: Yes hey, Tommy, this is Stewart, thanks for the question. I think, I’ll say a couple things about sales and marketing. We’ve always had, as a fairly balanced go-to-market approach. We sell our policies primarily through the lens of trying to think of about where our customers want to buy them. And so if our customer wants to buy it directly from us, we’ll sell it directly from us. If our customer wants to buy through an independent agent, or through, a partner of ours we’ll sell through those channels. And if a customer’s buying a brand new home, we make that very easy by embedding insurance in those transactions. And so, changes in sales and marketing are things where we have an ability to respond to the market environment, and to tune our spend to the conditions and to achieve the highest return on those investments that we can.
One of the things that is happening in our 2022 results is and we said that, in earlier calls during the year. We’ve been rolling out new states and so and we’ve also been taking rate action in the existing states that we’re in. And we didn’t really want to sell aggressively into states where we hadn’t yet gotten rate adequacy or, obviously not possible to sell until we’re approved in new states. And so as we’ve gotten rate adequacy in more of our existing states and as we’ve been able to roll out new states where we feel like we are adequately priced, it gives us a broader geographic area to spend our marketing dollars. And that’s why you see sales and marketing climbing in the third quarter relative to Q2. That’s because we have more areas in the country where we feel like we are properly priced and are able to able to spend those dollars wisely.
With the builder channel, obviously, that’s a partner based channel, I don’t think it directly impacts the decisions we would make in terms of how to spend either brand oriented dollars or user acquisition dollars in the direct channel. So we’ve – our partnerships with the builder channels are designed to be economically independent and attractive to all parties on their own. And our ability to spend marketing dollars in the direct channel is sort of an unrelated to the partner or the independent agent channel.
Richard McCathron: Yes, Tommy and just to be to be really clear, we are we have never been the type of company that looks to acquire customers at the cost of LTV. And so our omni-channel approach creates that discipline, if we believe any particular type of customer acquisition is outside our comfort zone or thresholds, we just discontinue that until it gets within our threshold where we are not in the business of buying business. We’re in the business of acquiring business that we think has a very positive LTV, whether that’s through a builder, whether that’s through an agent, whether that’s direct to consumer or through some other form of partnership. And we do have a lot of discipline, and we’ll maintain that discipline throughout our existence.
