Sales & Marketing: Module Iv

SALES & MARKETING: MODULE IV

The material in this module gives you suggested step-by-step approaches to selling Life insurance, explaining in depth each of the seven 'Action Steps to the Sale' that were originally outlined in the 'Life Personnel' section of your Agent's Guide under 'Training.' Here's a quick overview of those steps:

1. Prospecting
2. Pre-Approach
3. Setting the Appointment
4. Qualifying Interview

   a. Establish trust, needs recognition, premium commitment

   b. Gain agreement to take a closer look

   c. Conduct comprehensive fact-find

5. Presentation/Close
6. Policy Delivery/Client Building
7. Obtaining referred leads

These steps all work together to form the sales process. At the end of this introduction, you'll find illustrations that show how these steps work together to put you on an 'Action Track' for selling.

This 'Sales and Marketing' section goes into each of these steps in great detail, outlining how to accomplish each one and how they work together, and providing you with proven selling language to use at each step along the way. The steps can be used for selling both Personal and Business Life insurance. However, note that we have centered this discussion around the selling of Personal Life insurance. The different aspects of selling Business Life insurance can be found under 'The Business Life Sale' in this section.

The material in this section was developed by Nordhaus Marketing in conjunction with Kinder Brothers & Associates, Life insurance managing and marketing consultants. The language and techniques presented here have all been field-tested by major multi-line carriers, and they work. Use this material to develop a Life insurance selling process within your agency-you can train yourself to sell Life or train a new Life producer to sell it the way you want it sold.

The processes described in this section for each of the seven action steps will apply in general to just about any Life sale you are going to make, no matter whether you bring in a Life insurance salesperson, train your own people to sell, or opt for another choice in setting up your Life Department (these choices and their implications are outlined in the 'Life Operation Options' section of this Agent's Guide). In other words, the language and techniques we present are universal to the general Life/Health/Disability sale. However, if you have P/C producers and/or CSRs who are also going to sell Life, they will have to know how to make the transition from the P/C sale into the Life sale and its language. So, we have included, after our explanation of the seven action steps, a section on making the transition from the P/C sale.

You'll notice that we have approached all this material by addressing 'you'-'you should say this,' or 'you should do that' to make an effective Life sale. The 'you' we are addressing is anyone who is going to be performing that actual step in the sales process. Your CSRs may be performing part of the steps by sending letters and making appointments; your P/C producers, as noted, may be selling some Life insurance; you, the agency principal, may be doing some selling; or you may have full-time Life producers making the entire sale. In any case, we are addressing whoever it is in your agency who will perform that part of the sales process. More information on distributing the responsibilities for Life insurance in your agency can be found in the 'Life Personnel' section of this Agent's Guide.

You'll also notice as you read through this 'Sales and Marketing' section that the emphasis is placed on making a two-call sale. The qualifying interview is your first call, where you qualify the prospect and gather necessary information. You then take that information back to the office to prepare for the second call-the presentation/close-where you actually make the sale and collect the premium.

There is a specific reason for encouraging this two-call sales process. Our research and experience has shown that many P/C agents are reluctant to bring a Life insurance person into the agency. Why? Because P/C agents are often unfamiliar with the Life sales process and are afraid of turning over all their P/C accounts, which they worked so hard to obtain, service, and retain, to a Life person, who might just 'barrel through' them and lose the P/C business. The two-call process eliminates this fear by mandating that the Life insurance salesperson bring all the information gathered in the first interview back to the office for assessment and review. This enables the P/C agent to know what has been said and what's being done with his or her accounts. The two-call sales process will help foster the trust relationship that is so necessary to the success of a Life insurance department in a P/C agency.

Of course, there will be times when a one-call sale is necessary or more cost effective-when the need is so dominant that it's obvious what should be sold. That's why we've included information in this 'Sales and Marketing' section on the dominant-needs sale, when it's appropriate, and how to go about making it. But until a trust relationship has been established between your Life and P/C departments, and until you, the P/C agent, feel comfortable with the Life insurance sales process, we encourage use of the two-sale concept.

The seven Action Steps can be used and adopted for all types of Life insurance sales, from the simplest Term sale to the most complicated total financial planning sale. In the 'Sales Campaigns' section, you'll find more detailed information and marketing ideas for specific types of Life insurance.

Seven Action Steps

EXPLANATION OF THE PROCESS

Action Step 1: Prospecting building a reservoir of prospects

Action Step 2: Pre-Approach sending letters to prospects to prepare them for appointment setting

Action Step 3: Setting the making contact to sell the agency's concept and set Appointment the time and date of the initial appointment

Action Step 4: Qualifying face-to-face meeting where you probe to find out Interview needs, desires, and buying motives, and where you conduct an extensive fact-find to gather necessary information

Action Step 5: Presentation/ the buying interview during which you present your Close insurance proposal and sell the prospect on the program

Action Step 6: Policy Delivery/ the process of turning the new customer into a Client. Building loyal and long-time client, beginning with a personal delivery of the policy

Action Step 7: Obtaining, getting qualified leads from clients that you can. Referred Leads feed back into your prospect reservoir to begin the process over again

ACTION STEP 1: PROSPECTING

A sale must begin with a prospect; in fact, with many of them. Recall the 'Rule of Fifty' explained earlier in the 'Marketing Plan' section of this Agent's Guide. We discussed the fact that, if you want to support a Life department in your P/C agency, you need to be able to generate at least 50 leads the first week and at least 25 leads per week thereafter that feed into a pool of leads for your Life producer to follow up. These leads are generated by various people in the agency-CSRs play a role through their daily connection with insureds, as do your Life producers, who should be going after referrals and other lead sources such as centers of influence (more about these later). The P/C agency principal can also play a role in lead generation by sitting down with a Life producer and deciding which P/C accounts make good Life prospects.

If 25 or 50 leads a week sounds like a lot to you, consider the following facts:

• According to the Life Insurance Marketing and Research Association (LIMRA), only one household out of three has been contacted recently by a Life insurance agent. The others either haven't bought Life insurance or have purchased it through the mail.
• According to LIMRA, in 19% of all households, not one member of the family has any Life coverage (including Group Life). In 38% of households, not one member carries individual Life.
• In 23% of households surveyed, the head of the household does not have Group Life coverage. In 45%, the head of the household does not carry individual Life.
• In 49% of households, at least one member of the family has no Life or Group Life coverage. In 64% of households surveyed, at least one member has no individual Life coverage.
• In 38% of households, not one member of the family has individual Life.

What these statistics mean is that there are many households out there that have a genuine need for Life insurance who have not been contacted or sold! In other words, chances are you won't have problems maintaining 50 leads a week for your Life department. Read on for methods of generating these leads.

Your leads have to come from somewhere. Following are some ideas for lead-generation sources.

The P/C agency has a decided advantage over a Life agency or single Life insurance salesperson-built-in leads. The Life producer's biggest problem isn't selling, it's generating leads. A P/C agency's Life department has that problem solved. Your agency is in a unique position to provide quality leads to the Life producer. Your P/C files can be mined for Life sales on a regular basis, and this can lead to additional 'total-account' P/C sales also.

Consider the fact that, as an insurance agent, you are often one of the first people to hear about important events that affect your clients, such as:

• purchase of a new home, car, or boat
• a new job or expansion of business
• an addition to a house
• a new baby or grandchild

You'll also learn about the accidents, fires, thefts, and so on that take place. All these events have one common thread: They indicate a change in financial condition that could trigger a review or a need for Life insurance.

Your CSRs can be trained to watch for these types of changes and feed the leads to your Life department. More information on training CSRs to do this can be found under 'Training' in the 'Life Personnel' section of this Agent's Guide. You'll also find forms that can help CSRs and producers generate and track these leads.

Your P/C database is an ideal source for Life insurance leads. You should be able to come up with at least 50 initial leads, and probably quite a few more, by looking no further than your own P/C files. In fact, we encourage you to use your P/C database as your major source for Life leads because:

• there's a plentiful supply
• the prospects will be familiar with your name and service
• it's more profitable for the agency because you can make the total account sale
• total account selling increases your chances of retention

Although we encourage using your P/C database for prospects, we would be remiss in not mentioning other prospect sources, especially referrals, which are a valuable source. Information about other lead-generation sources follows.

Just as they do in your P/C operation, referrals can play a large and important role in your Life insurance prospecting. In fact, they are so important that an entire Action Step is devoted to developing referrals. You'll find more information on this subject under 'Action Step 7: Obtaining Referred Leads' later in this section of your Agent's Guide.

Many times, a good way to get your prospect list started, or to augment it, is to purchase a list from a mailing house or other source. Dun & Bradstreet is probably the most well-known list source, and can yield prospects for your Group and Business Life. Dun & Bradstreet usually provides the names of executives or officers of the companies on its lists, therefore providing you with names to target for individual Life and financial planning services, too. Other lists target individuals by ZIP code, income, and a number of other variables. Your Life insurance companies may be able to help you buy lists at a preferred rate.

Centers of influence: Many influential people who you meet on an everyday or professional basis in your community can become sources of prospects for you. These people include:

• Certified Public Accountants, who often review their clients' Life insurance coverage
• Attorneys, who often have advance notice of situations that may involve Life insurance (business reorganizations, revision of wills, and so on)
• Bankers and officers of financial institutions, who have information on new businesses and new homeowners in town
• Real estate agents, who are in touch with new business and home buyers
• Editors of business publications, who often know in advance about changes in business (promotions, new partners) that may trigger a Life insurance need

You're bound to meet and socialize with some of these people in your community, particularly if you belong to such organizations as the Rotary or Kiwanis Clubs.

Public records: Your county's files and records can provide a source of prospects for you. If real estate transactions in your county are computerized, you should be able to obtain a list of property transfers, letting you know who has recently bought and sold homes in the area. Computerized lists of property taxes can also let you know who owns expensive property and may be affluent enough for your higher-line Life products.

Yellow Pages: An advertisement in the Yellow Pages can bring you in business, but advertising is not the only way to use the Yellow Pages. Doctors, attorneys, accountants, architects, and other upscale professionals who need Life insurance to protect their assets and employee benefits for their businesses will be listed in the Yellow Pages. 'Let your fingers do the walking' for prospects.

You can use a variety of tools to gather or augment your prospect list, including multi-media advertising, direct mail, brochures, and more. A brief word about each of these should suffice:

Advertising: The advertising for your Life insurance operation should be part of your agency's overall advertising campaign. Advertising can generate leads by familiarizing the general public with your name and location. When a need comes up, they'll think of you. Your ads can also ask directly for a telephone contact, helping to generate leads. You can choose from a variety of advertising media and methods, based on your needs and situation, including print ads in newspapers and magazines and electronic ads on radio and television. There is a lot to be said about types of ads and methods, and this is really not the place for it. Your library should have volumes of information on advertising, and an advertising agency can be a great deal of help, for a price.

Direct mail: Direct mail can be effective for generating leads, particularly if you have a product whose advantages stand out clearly on paper. Advertising low Term insurance rates, for example, can get people's attention. Make up fliers and blanket your area, asking for phone calls. Or, send letters to all the addresses possible in your area. These kinds of blanket, high-volume mailings differ from the pre-approach mailings that we will discuss under 'Action Step 2--Pre Approach' in that you will most likely not follow up on these direct mailers with a phone call asking for the appointment. You wait for return cards or phone calls.

Brochures: A well-designed agency brochure can convey the message that your agency provides professional total insurance protection-including Life and related coverages. You can use a brochure in many ways to help generate leads. Bring it along when you review a client's coverages, to gently remind him or her of all the services you offer. Use the brochure in mailings to selected prospects, or as a direct mail piece with a cover letter. As to the design of your brochure, look to advertising materials or a professional agency to help you get your message across effectively in your community. And you can turn to the 'Idea Center' section of this Agent's Guide to see some samples of agency brochures.

Newsletters: Newsletters can be used as a prospecting tool, although they are primarily sent to customers to keep your name in front of them and to provide a backup for E & O claims. Using newsletters for lead generation involves placing them throughout the community-in doctors' and other professional offices, and so on-so that your name appears before the community. If you have a prospect list already generated through other sources, you can use the newsletter to acquaint prospects with your agency and get them interested in Life insurance coverages. The newsletter content could center on Life and Group Benefits only, or could be a combination of P/C and Life. Some agencies write and produce these newsletters in-house; others use an outside service, such as that provided by Insurance Marketing Services, Inc.

WHO ARE MY PROSPECTS?

Prospect Categories

In the most general sense, you can define a prospect as any person or business that has a need your agency can meet through your Life department.

When you're trying to get together a list, however, it helps to have a few more details. A joint survey by LIMRA and the American Council of Life Insurance (ACLI) provides some facts that may help you define who your prospects are. The survey placed household groups into the six categories that follow. Keep in mind that the numbers quoted from the survey are averages: If you live in a busy metropolitan area or any area where jobs are plentiful and salaries high, the figures will be higher. Even so, the profiles provide some useful information about what types of prospects are out there and what types of coverages they have and need.

1. 1. Strugglers:

• Mostly single
• Make up 25% of all households
• High School educations, hold blue collar or clerical jobs
• Average age of head of household is 33
• Average income of $10,000
• Average net worth of $1,000

More than half of these households have no Life insurance and only 3% are covered under pension plans. The chief financial objective in this group is liquidity, followed by safety. These people will be prospects for lower-priced policies, because they can't afford much else. If they move up the line, you sell them more.

1. 2. Traditional Savers:

• Married, with children under six living at home
• Make up 20% of all households
• Better educated than strugglers, but hold blue collar, clerical, and service positions
• Average age is 36
• Average income of $25,000
• Average net worth of $19,000

This group values Life insurance coverage: 59% have individual coverage and 95% carry Group coverage at work. While 77% are covered by pension plans, only 17% have individual Disability insurance. Their chief financial objective is security, followed by liquidity. These people realize the need for protection, but low discretionary income makes them a more difficult sale-low-priced products that provide protection are likely to get their attention.

1. 3. Payroll Deducters:

• Married, two-income households
• Make up approximately 13% of all households
• Hold unskilled jobs
• Average age is 42
• Average income of $25,000
• Average net worth of $26,000

Two-thirds of this group have individual Life insurance and 88% are also covered under Group plans. Their primary financial objective is growth. These people will be targets for payroll deduction Group coverages and lowercost individual Life that has some savings features.

1. 4. Climbers:

• Married or single, upwardly mobile
• Make up approximately 14% of all households
• Have college degrees and work in sales, lower-level management, and professional capacities
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