Once you have identified a life insurance prospect, as well as the life product that fits the individual’s specific need, where do you go from there? What’s the next step?
All too often advisors drop the ball at this point by presenting their proposal and look for the client’s positive response – that doesn’t come. “I need to think about this,” says the client. “I really wasn’t prepared for that size premium.”
Although the client acknowledges the need for the coverage and recognizes the benefits presented in the proposal, the advisor senses that the sale is starting to slip away.
Why is it happening? What’s causing the doubt? Even more important, what’s missing? Answer: a clear hard-hitting message that captures the essence and benefits of accepting your advice. And that’s what prospects are looking for. If they don’t find it, they don’t buy.
If you think this is easier said than done, you’re right. It takes both skill and insight. Some years ago, an associate raised funds for a history museum sponsored by a large fraternal group. Most of the prospects lived in distant states and might never visit the facility. Using direct mail, prospective donors were offered an elegant medal to be presented personally by the organization’s head, plus their sculptured individual likenesses permanently displayed in the museum. A goal of 25 was set. However, in a brief time, 72 were subscribed at $100,000 each.
The sales task is always the same – capturing the client’s imagination. What are the skills needed to accomplish this objective and to bring them to take positive action on the solution?
First, a thoughtful give-and-take between advisor and client is necessary before the client can make a positive decision. Today’s life insurance buyers expect to participate in developing the most appropriate buying decision. But, as every advisor knows, such discussions can go far afield and become counter-productive. This is why the advisor is tasked with the responsibility to keep the process on track so that it achieves a positive resolution with the benefits fully appreciated by the client.
Second, to be successful, advisors must separate themselves from competitors by bringing clients fresh and different perspectives that can capture their attention. Listening and relating with the client are critical and can be important in understanding clients’ make up and the values that can motivate to action. Here are some ways to do this:
- Relating and understanding: Probing questions can stimulate client insight, bringing meaning, focus and clarity to the discussion. It takes “hitting a nerve” or “touching a hot button” for clients to move forward with a sale. Few salespeople seem to recognize that this process is essential in working with each and every client.
- Teaching and adjusting the presentation for each client: It takes a special ability to be objective in laying out the problem and solution for clients in a way that’s sensitive and relates to their needs, position and viewpoints and allows them to embrace the solution. Advisors who develop this skill will separate themselves from the average life insurance salesperson.
- Be direct and control the discussion: It an advisor’s task to stay focused on the objective throughout the discussion, recognizing the purpose of the process without pretenses. Professionalism and guiding the interview with an even hand are what it takes to achieve a successful result.
Taken together, these are the essential components for making life insurance sales happen.
Third, be comfortable with addressing a client’s economic and financial views. This may be the most difficult task of all for advisors since it deals with attitudes that many avoid out of fear for upsetting and possibly alienating clients.
Not surprisingly, it’s probably fairly accurate to describe many clients as “cautious” when it comes to economic and financial issues, particularly in light of the disastrous national and international financial crisis, the credit crunches and stock market crashes in recent years.
In light of this recent history, it’s only natural that many clients are cautious (even pessimistic) when it comes to the overall economic and financial picture. Because this can be on their minds, advisors should take the opportunity to point out the other side of the coin: there has been economic growth, a soaring stock market and an improving employment picture. Disneyworld is more popular than ever, new cars are flying out dealers’ doors, and the market for luxury items has never been stronger. The cup is more than half-full!
But that’s not to ignore the fact that the same cup can also be viewed as half-empty, which is why it’s essential to call attention to underlying uncertainties. This includes such factors as the continuing escalation of the national debt and the negative impact of low interest rates, higher taxes on dividends and interest, and higher living costs. And subsequent punishing effect they have savers and retirees, as well as workers, business people and investors.
It may not be pleasant to raise these issues with clients who are looking for good news. Nevertheless, unless a client can come to terms with the fact that a volatile monetary and fiscal environment, potential inflationary pressures, and mounting municipal and state deficits, they will have difficulty recognizing the need for saving money and shoring up family security with conservative investments.
Fourth, the best way to approach – and solve a client’s problems?
The value of having a dialogue with clients regarding “real world” issues helps them recognize that, like it or not, this is the environment in which they live and work – the one in which they will retire. And more than anything else, the one in which they want financial security for their family.
Out of all this comes the opportunity to focus on a client’s “problems,” the issues to be solved. These might include:
- Spousal income, family legacy planning
- Estate planning liquidity, asset diversification
- Business continuity planning
- Key person benefit planning and executive planning
- Loss of income or disability and long-term care needs planning
Then, taking each issue separately to go to the next step by having discussion with the client:
- Is the need or problem short-term or long-term? What are the potential results of allowing the problem to exist?
- What has been done to begin to address the need? The information can sometimes be used as a lever to move into complete solutions.
- What are the results of actions taken thus far? Talk about cost of not taking a full or improved solution. What is the cost do not having a full solution?
Then, comes the next step, finding the funds required to meet the various needs. Everyone involve should participate to obtain a commitment and buy in so that a client in on the way to achieving family and personal financial security.
Advisors often short-change clients, not deliberately, but simply by failing to engage them sufficiently so that they fully comprehend the problems facing them and the value of the solutions required to overcome them.
More often than not, it takes a hard-hitting message before an advisor can help clients be successful in meeting their challenges. Such a message may be disturbing, but it will never be nearly as distressing as failing to do our very best for every client.
Allan D. Gersten, CLU, CFP, ChFC, is Chairman of First American Insurance Underwriters, Inc., an insurance brokerage that specializes in supporting agents in all 50 states with life insurance, long-term-care, and annuity products from more than 30 insurance companies. Gersten has been in life insurance sales since 1969 and can be reached at 800-444-8715 or [email protected].