Life Insurance !
“Why are people deciding to hire a life insurance policy”? There are a lot of reasons from risk mitigation to tax-efficiency. I would say the #1 reason in the large case market is to pay a whole lot less taxes. So let’s blow that problem up for them.
The traditional sales model is dead.
Advisors winning in the insurance business don’t use the traditional model of understanding what their clients need, because their clients don’t even know what they want.
If you’re like me you were taught the traditional sales model. Here’s what mine looks like:
- Build Rapport
- Investigate to understand the need
- Present the solution
- Confirm and get commitment
- Position yourself for future business
What no one told me was this only works when your clients know what they need. Said another way, this works for low complexity sales – in our business, term insurance fits that bill.
When it comes to larger and more complex life insurance deals, sales complexity is quite high. No amount of investigative questions is going to get a potential client to self-realize that they need to buy this policy.
I know this might fly in the face of everything you know, but I’ve spent the last 10 years working with Advisors on such deals and I didn’t realize it until recently: investigative questions never got us to where we wanted.
We aren’t alone, most top sales people across the world who are selling complex solutions including financial services, tech, manufacturing and retail have all had to move away from the traditional model.
This is also the exact reason why most Advisors struggle to make the leap from the “Family Market” to the “Business Market” – there are new rules and no one told you. Most sales training, including what I have been taught applies to what I call, “low complex” sales – in these sales, needs analyses and fact finds work fine, but with complex sales where your prospect doesn’t know what he/she needs, they are useless.
This problem was blown up in the book, “The Challenger Sale” which I highly recommend to anyone trying to sell complex life insurance solutions. They found out that the top sales professionals selling complex solutions were in fact people who challenged the prospect to think differently and delivered valuable advice for their business. They found the worst performers were those that acted as “Relationship Builders”.
Here is how one executive put it: “Yes, John is a great guy and we like him a lot. But we bought from Garry because he brought more value to our company.”
I am not saying that relationships are not important, they clearly are. If people don’t like you, they will probably not buy from you. However, what I’m saying is, just because you have a good relationship, doesn’t mean you will get the sale. You will likely lose the sale to someone who provides more value to the client.
I’ve seen this in action, so I thought I’d document the steps for you:
- Open – Establish credibility, but not necessarily rapport. Share with the prospective client that you work with many people exactly like them. And here are the issues you see facing people like them.
- Reframe – This is what many people call the “disturbing question or statement”. What’s important here is to reframe in a way that teaches the prospect something new. Provide value to them so they want to learn more. Make them ask you the question. “Why hasn’t anyone ever told me this.” You need to get them a bit uncomfortable. If you are telling them something they already know, its unlikely you will get the sale. But if you are the one driving the value, they will listen.
- Drown Them – While the reframe is maybe a line of two. Here you want to blow up that problem with numbers, pictures, graphs and whatever will make your case. Here’s why this is a problem that you need to really consider. This is the meat of the presentation.
- Emotional Connection – It is essential that you now make the link between the problem and how it will affect them with a relevant story that will connect their business to the problem and to their emotional being. This is essential from being just another problem that they face in their business to one they have to solve now.
- Agreement on the problem – Now that we have laid out the problem that they face and made the emotional connection, we now need to get final agreement that this is a problem worth solving.
- The Solution – This is where we present our product or solution – in our case, Life Insurance.
As you can see, many people reverse the order and start talking about their firm, years of experience, blah, blah, blah. This is not what most top Advisors I’ve worked with before are doing.
In the book they call this Commercial Teaching, they are teaching the clients about a major issue they probably didn’t even know existed in their business. In our case, the Advisor knows the Financial Planning business better than them. They then blew up that problem, make an emotional connection and tie in the insurance solution.
This is literally the formula for every single large case life insurance deal I’ve ever done.
So here’s our problem:
Most people don’t understand the amount of tax they will pay in their lifetimes and we need to blow that problem up for them and tie it to what they value in their lives. Likely that is the business they’ve build, the money they’ve earned and family they’ve raised. Most people don’t see this problem in clear light. They don’t even realize how much they will pay in taxes in their lifetime.
Imagine just for a second you have a 45 year old business owner who has $500,000 of investments in his company. I ran the numbers, he will pay more than $2,000,000 in taxes on just that amount in his lifetime. This is a big problem!
I find it highly unlikely that a business owner who has dedicated his life to building his business and spending time away from his family has been doing this for the benefit of his government.
If we can all agree this is a problem worth solving, there is only a few options on the table. And from my perspective the best one is: