Harlan Warthen provides a simple, field proven, cost-effective program that you can use to produce a consistent flow of highly qualified Life and financial services leads, as well as a significant number of cross-line sales.
The concept of a P/C agency working with a Life professional isn’t new. However, up to this point, these relationships have seldom produced a steady and consistent flow of leads because no one ever decided who would do what and when. With all of the best intentions, the partnership becomes hit-and-miss at best, and never produces a consistent flow of leads.
THE INSURANCE INDUSTRY: THINGS CHANGE
The insurance industry has undergone a dramatic change. Clients today are completely different from those we dealt with just a few years ago; they’re well informed and can access an unprecedented level of insurance resources through the Internet. The ways in which insurance products are solicited and purchased have also seen dramatic change. Phone solicitation is almost non-existent, thanks to “No Call Lists.” Each year the number of insurance products purchased over the Internet increases.
Although buyers of insurance products and services are still there, the sales strategies that we once used are no longer effective. Industry studies indicate that 15% of all households will purchase some form of Life and financial service within the next 12 months. If you use the Rule of 72, 100% of all insurance purchasing households will purchase Life or a financial service product in the next seven years from someone. It’s no longer a question of “if” — but “when”! Another study by the IIABA found that 70% of households polled were not aware of all of the products and services that their primary P/C agent offered. The study also pointed out that if the client knew what was offered they would have considered purchasing them from the agent.
You have to ask yourself what’s gone wrong — and the answer is plenty! It doesn’t make any difference whether you’re a P/C agent or a Life agent or; it’s harder to do business for a lot of reasons.
Clients are buying insurance and financial services from somebody. P/C agencies have these clients, but lack a process to solicit them effectively — while Life professionals need qualified clients. In this situation, joining forces makes sense for everybody concerned.
THE ROLE OF A PROFESSIONAL ADVISOR
Our industry continues to become more complex and requires a level of knowledge that might be impossible to attain. If your client asks for advice on Life insurance or financial services, you face a dilemma. Can you realistically assume the role of an advisor? Personally, I don’t think you can. The level of additional knowledge, training, and licensing required to make a recommendation in an area outside of your expertise can be staggering. To fulfill the role of an advisor, you must be able to recommend a professional advisor, either within your agency or from an outside source.
When polled, clients say they would prefer to do business with a single insurance professional for advice and answers. Clients don’t necessarily need their primary agent to be able to provide the service or product, but they want to be referred to someone who can. Unfortunately, insurance has become so specialized that neither P/C agent nor the Life agent can provide accurate advice for the other discipline. We can no longer be all things to all people; and even if we could, the level of knowledge and licensing requirements make it virtually impossible. The P/C agents and the Life/financial services professional need each other. To provide clients with access to a full array of insurance products and services, you need to create a strategic alliance with a Life professional based on trust and professionalism.
TYPES OF ALLIANCES
These alliances come in two forms:
- An External Alliance between your agency and a Life General Agency or an Independent Life Agency.
- An Internal Alliance between your agency and a Life Specialist.
Each of these types will work, as long as there’s agreement between the parties up front. In essence, the agreement determines who has responsibility for individual tasks and when those tasks will be performed. The choice is which type of alliance would be the most beneficial to you and the interests of your clients. Here’s an example of each type:
EXTERNAL ALLIANCE
A Life General Agency or an Independent Life Agency alliance with a P/C agency is essentially the same; both would be considered external alliances. The major difference is the size of the organization. The Life General Agency has a tendency to be the larger of the two. In most cases, they would have access to significantly more resources, several layers of management supervision, and many more agents. Independent Life Agencies operate the same as Life General Agencies, but usually on a smaller scale; they don’t necessarily have one primary Life insurance company, but broker policies to a number of companies.
INTERNAL ALLIANCE
An internal alliance involves your agency hiring an experienced in-house Life specialist who has access to Life and financial service products through your agency’s existing Life company appointments. This specialist should have an above average level of Life and financial services experience and hold at least their Series 6 and 63 licenses, as well as an advanced designation (CLU, ChFC, etc.)
A MATTER OF TRUST
Building a strong alliance between your agency and a Life specialist must be based on trust. You need to trust the specialist not to jeopardize your existing clients by “hard sell” tactics; the specialist must trust you to provide qualified leads. This mutual trust requires both parties to understand the benefits that each will enjoy.
MAKING THE ALLIANCE WORK
As was mentioned earlier, there’s nothing new about Life specialist arrangements with a P/C agency. Everything starts out great, with each party sending business to the other. If forming such partnerships makes so much sense, why have most of them failed? First, no one puts together a plan or process for developing referred leads on a regular and consistent basis. Second, no one determines who’s accountable for what and when. Finally, and most important, the P/C agency doesn’t perceive that the Life specialist brings any added value to the relationship.
Make no mistake: Making your alliance with a Life specialist work will require time and patience. Although the relationship might be difficult at times, both parties will enjoy a dramatic long-term payback.
HOW THE ALLIANCE WORKS
This strategy is built around a “Client Coverage Survey” that will identify what products and services the client is interested in. Your agency doesn’t have to implement a new marketing plan because the survey is completed at the end of every client service request. The Client Coverage Survey will produce leads in a volume that you’ll have a hard time believing: Although results will vary, this sales strategy can produce three or more applications per week.
BUILDING A WORKABLE AGREEMENT
To build a successful, mutually beneficial alliance, you’ll need to
- Do your homework to select the right partner
- Analyze the client base
- Create a written Alliance Agreement that will deal with:
- Compensation
- The accountabilities and responsibilities of each participant
- Housing the Life specialist
- Covering additional operating expenses
Other factors to consider include your agency’s: (1) premium volume; (2) Number of policyholders/ households; (3) percentage of Personal Lines and Commercial Lines business; (4) renewal ratios; and (5) resources.
MAKING A COMMITMENT
Last, but far from least, all participants must commit to making the alliance work. As so often in life, your commitment will determine whether you’ll succeed or fail. I guarantee that you’ll succeed if you commit to implementing the process as it was designed. If you want to change it down the road, be my guest — but keep in mind that my system works the way it was written. Consider doing it my way first before you decide to reinvent the wheel.
EXPECTATIONS
Make no mistake: an alliance with an in-house Life specialist will work to everyone’s advantage. The potential results from a well-structured alliance are enormous A Life specialist can expect to produce consistently 75 to 150 new Life applications per year. In addition to new Life revenue, your agency can expect 10% to 30% in additional cross-line sales, as well as improved retention — all with a minimum amount of effort.
Establishing a strategic alliance between your agency and a Life specialist is a WIN/WIN situation for all concerned.