From Quote to Sale. Any suggestions?

[Mike_Golden1]

I've been in sales a long time but will admit that the insurance business is different than anything else I've ever seen regarding the difficulty I seem to have in moving prospects from the quote to the sale, even when you know they want to do it.

John Petrowski and I have talked about this and he says I'm doing fine, but I'm wondering whether there is something I'm missing here.

So, I'm opening it up to the collective wisdom of the forum, how you do move a client, even one who is willing, from having a quote they seem to like into a finished application for coverage?

 

[somarco]

I start by asking them a lot of questions.

How long they have been looking. What kind of plan did they like; which ones they didn't like. If they found a plan they liked, why didn't they buy it?

Also ask about health history. What kind of meds taken in the last 12 months. What kind of major illness or injury in the last 5 years.

We talk about what they want in a plan, and why. They usually want a copay & low deductible. I always run rates on the plan they want, then tell them about a plan I would suggest with no copays and usually a higher deductible.

My plan is almost always 30 - 40% less than what they had in mind.

I explain to them why copays usually don't make much sense and why a $2500 deductible, 100% plan is better than the $1000 deductible, 80/20 plan they want with copays.

Of course my plan is also cheaper.

I tell them I am going to send out information on the plans we discuss and I will give them as much time as they need to review, ask questions, and make a decision.

I let them know I recommend plans I would pick if I were in their shoes but quickly let them know that this is their plan and their money. If they really want to spend $1000/month for family coverage it is available.

Then I tell them the plan they want is like another house payment. Why not consider a plan that is more like a car payment and save the money in a tax favored account.

This of course leads in to . . . the HSA.

Most of the folks follow my suggestions and buy what I recommend.

Before letting them go I remind them to look for the quotes in their email in the next 10 - 15 minutes. Print out each quote and make notes on the printout. I set up a time & day (usually within 24 - 48 hours) to follow up and make sure they got the material and see what questions they have.

The very last thing before letting them go is this. I tell them I have one more question . . . what is their favorite color.

This always causes them to pause, then they tell me.

I explain they will talk to a lot of people (these are shared internet leads) and I don't want them to forget me. I tell them if someone calls and doesn't know their favorite color the person they are talking to is not me.

That usually cements the relationship.

 

[J.R.]

I explain to them why copays usually don't make much sense and why a $2500 deductible, 100% plan is better than the $1000 deductible, 80/20 plan they want with copays.

Would you be kind enough to elaborate on the aforementioned points? I have noticed that it is very hard to convince some people out of co-pays plans, via an HSA. Although I will say that is not the norm with my experience. John's line about treating health insurance like car insurance has worked great for me.

Then I tell them the plan they want is like another house payment. Why not consider a plan that is more like a car payment and save the money in a tax favored account.

I like it...

I explain they will talk to a lot of people (these are shared internet leads) and I don't want them to forget me. I tell them if someone calls and doesn't know their favorite color the person they are talking to is not me.

MEGA introduced this marketing idea last summer and it seems to work very nicely.

 

[Michael Haislip]

I have noticed that it is very hard to convince some people out of co-pays plans, via an HSA.

The easiest way is to just show them the numbers on a piece of paper. Sit them down, do the math with them, let them see exactly why the copay is a waste of money.

"Mr. Prospect, your copay plan would add $100 dollars to your premium. However, you told me you only go to the doctor once per year which costs you $60. Bay paying the doctor fee out of pocket, you can save this much money."

 

[Mike_Golden1]

Somarco,

you have a great approach, that's why you are so good at internet leads and I suck at them. The leads I had are all exclusive and either business owners or self employed-I have already gone through the information gathering and quoting process, they have said it looks good but haven't yet signed up. Do you have any advice for that? Thanks is advance.

 

[somarco]

MEGA introduced this marketing idea last summer and it seems to work very nicely.

I have been using this for years. I can assure you, I did not get it from Mega.

it is very hard to convince some people out of co-pays plans,

I used to have the same problem, but not any more. I sell a lot of Golden Rule for a number of reasons. Some of it is because of competitiveness, but mostly because their software is easy to use and see all the plans on one page.

Take a couple in Atlanta, mid 30's with 2 kids. (GR doesn't offer maternity but that doesn't matter at this point. Right now I am not designing their final plan, just trying to sell them on a concept they have not explored).

The $1000 deductible copay plan they want is $598/month.

I ask them how many times they have breached the deductible in the past. The only time was when the kids were born.

OK, so why not look at a higher deductible, say $2500. The premium is $450/month. If you bank the $148/month premium savings, how much have you saved over the course of the year?

$1776.

So if no one has a major claim, you have saved $1776 by simply going to a higher deductible. What if someone does have a major claim, what is your ADDITIONAL exposure then?

$2500 - $1000 = $1500.

So you saved $1776 in premium and incurred an additional $1500 in out of pocket. Are you still ahead of the game?

Of course. So if no one has a major claim over the next 5 years, how much have you saved?

$1776 x 5 = $8880.

How much is your exposure on a major claim with the $1000 deductible? (Most folks think it is $1000 unless they have had a big claim, then they know they are responsible for another $2000 on top of the deductible).

Once they understand their OOP is $3000 on a $1000 deductible, and they will save $1776/yr . . . $8880 over 5 years by going to the higher deductible they are OK with it, but not overly comfortable.

So, how many times do you go to the doc during the year? For 4 family members maybe a total of 6 - 10 times. They are not on any maintenance meds so we run the numbers again.

Say you go to the doc 8x per year at $30 copay that is another $240 per year you are spending on top of your premiums.

What if I showed you a plan with a $2500 deductible with no copays and a big plus. Your claims xs of $2500 are covered at 100%, not 80%. That means your OOP on a major claim is LESS than it is now with your $1000 deductible.

Oh yeah, the premium for this plan with a $2500 deductible & 100% but no copays is $314/month. (This is for the GR Plan 100, not the HSA).

That saves you $284/month, or $3408/year over your copay plan and you have less out of pocket on a major claim.

How many times can you afford to go to the doc each month and STILL save money when your premium is $284/month less than the plan you wanted?

Any idea what you can do with that $284 savings? How about putting it in a tax favored bank account?

Now I shift gears one more time and explain how the HSA works, then give them a price on an HSA plan. Sometimes they buy the HSA, sometimes they stick with the Plan 100.

Either way I get the sale.

Comment to Mike . . .

This approach will work over the phone or face to face. It will work with internet leads or telemarketed exclusive leads. All you have to do is show them something no one else has and you can get the sale. Most everyone else is simply taking orders, while I am giving them an opportunity to buy what they really need.

 

[Crabcake Johnny]

Your auto insurance agent calls you and says:

We can raise your monthly rate by $150. Then you get $10 copays for unlimited oil changes and basic maintenance - but not for anything major."

Is that a con? Sure. How many oil changes to you get in a year? Does your car need $1,800 worth of basic maintenance? Not even close. And the ultimate con is that for anything major - transmission or engine problems you pay everything.

Why do it with health insurance? Are you using $1,800 worth of doctor visits?

And why are you paying for something that may never happen? You're paying IN CASE it happens therefore get a high deductible.

 

[Crabcake Johnny]

And I view this more like a business then just going nuts on my closing percentage. Imagine the owner of a furniture store going crazy trying to figure out why most people are just walking around and not buying. It's the nature of the beast. The only thing that owner can do is increase traffic. Can you train your sales team to close people who can't afford or don't want the furniture? No.

My bottom line is if I have $200 for the week in leads costs and that's gets me $1,600 in return then I need to spend $400 a week to return $3,200.

Say that your closing percentage isn't great. Can you still spend $500 to return $2,000 and net $1,500? If you can then great - cross sales and renewals will get you up to six figures.

Just how bad is $500 to get $1,500? That's about 50 leads to close two deals. If anyone can't close 2 deals out of 50 then this isn't their field.

 

[Guest]

I start by asking them a lot of questions.

How long they have been looking. What kind of plan did they like; which ones they didn't like. If they found a plan they liked, why didn't they buy it?

These are really good questions to ask that I never ask...I will now.

 

[J.R.]

Take a couple in Atlanta, mid 30's with 2 kids. (GR doesn't offer maternity but that doesn't matter at this point. Right now I am not designing their final plan, just trying to sell them on a concept they have not explored).

If I understand things correctly you do the following with each client

1)Quote a plan exactly what they want with all the bells and whistles.
2) Quote a different plan based on your recommendations (i.e, no co-pays, higher deductible, etc.)
3) Suggest a 3rd plan (i.e., HSA Plan)
4) Let the client decide which plan they want.

Is that about right? If so, do the clients normally have quotes printed out for each of the aforementioned plans?

I ask them how many times they have breached the deductible in the past. The only time was when the kids were born.

Great question!

What if I showed you a plan with a $2500 deductible with no copays and a big plus. Your claims xs of $2500 are covered at 100%, not 80%. That means your OOP on a major claim is LESS than it is now with your $1000 deductible.

I imagine you are talking about the HSA 100 because the OOP max for any of the Plan 100, 80 or Saver 80 is 2X the deductible per family, per calendar year.

Any idea what you can do with that $284 savings? How about putting it in a tax favored bank account?

This is a great transition into a HSA.