Tag Archives: agents

Trusted Adviser? No, Be a Go-To Adviser

One of the most clichéd claims made in our industry is that of being a “trusted adviser.” Sure, trust is essential. Clients need to trust in your ability to do your job, and they need to trust in your intentions when giving advice.

But is earning trust brag-worthy? Isn’t trust a minimum expectation of the advisor-client relationship?

The real goal should be achieving “go-to” status.

What questions do you want your clients to bring you?

More importantly, what questions are they bringing you now? Not to be an alarmist, but if those questions are limited to insurance issues, your client relationship is in danger.

When asked how they wanted to be viewed, one of our clients responded with the following, “I want to be THE partner my clients go to to ask their toughest questions. I want to help my clients accomplish their intentions.”

I LOVE that! Notice, it doesn’t say their toughest “benefits questions” or even “accomplish their HR intentions.” The commitment is to be the partner their clients go to for help with anything challenging their business.

How cool is that?! Or maybe the idea makes you feel a little uncomfortable?

It is increasingly necessary

If you’ve been in sales for any amount of time, you know it’s more challenging than ever to deliver value to a buyer. Heck, if you were selling a year ago, you see how much more difficult it became because of the pandemic.

The increased challenge to deliver value started way before 2020, though. There are many reasons, but one stands out.

Buyers no longer depend on a salesperson to learn about a product or service.

Not only that, buyers don’t want to talk to anyone until they decide they’re ready. They will self-educate on their own terms and at their own pace.

It’s not that they don’t eventually want to talk to a salesperson, but buyers are now way further into the buying process before they go to a salesperson with questions. This means the value bar has been raised significantly for salespeople. The further you’ve advanced on the value spectrum, the more important your eventual conversations will be.

How are you perceived?

If you want to know how prospects/clients perceive and categorize you, look no further than the questions you are asked.

Vendor — “Can you get me a better quote?”

If you are mostly getting price questions, you are viewed as a commodity.

Insightful Seller — “Can you help me effectively communicate my benefits program and deal with compliance issues?”

At this level, salespeople understand the commoditized product offering so well they can help buyers get more value from it than if they bought it from someone else.

Educational path to this level — Instead of studying your products and services’ features and benefits, study the problems they solve.

Trusted Adviser — “Can you help me better understand what solutions I should be considering and show me how to use them effectively?”

Salespeople at this level are selling the problems they solve rather than the products. The best at this level aren’t even really selling; the buyers trust they can help them make better buying decisions.

Path to this level – Study and implement a consultative selling process that makes the buying process more manageable.

Strategic Adviser — At this level, questions start to become, as you might guess, strategic. “You seem to understand our industry and the current business environment; what can we be doing to compete more effectively?”

These advisers bring a new perspective to the buyer and help them see things they hadn’t seen before, like environmental challenges and opportunities.

Path to this level — Study a specific industry or the business environment, in general.

Go-to Adviser — At this level, clients pull back their curtain and share their most vulnerable self. You know you’ve arrived in the relationship when asked, “We have some internal growth pains. Can we talk about suggestions you would have to get past them?”

Go-to advisers have proven their ability to address the challenges and opportunities a buyer faces internally, challenges that buyers don’t see on their own even though they are surrounded by them daily. Even if buyers do see the challenges, they don’t know how to address them.

Path to this level — Study business operations: marketing, finance, strategy, processes, everything it takes to run a successful business.

Challenge yourself to pursue the various educational paths along this value progression. By doing so, you will put yourself in a position to be that go-to relationship for your clients. Talk about a game changer!

See also: 3 Tips for Increasing Customer Engagement

You don’t have to have all the answers

If the idea of being “the partner your clients go to with their toughest questions” makes you uncomfortable, it shouldn’t. Just because they come to you with their toughest questions, it doesn’t mean they expect you to have all the answers.

To become a Go-to adviser, you only need to be willing to participate in conversations that lead to the answers.

I suspect you already take this approach in a much narrower way. If you are a benefits producer, you may find yourself in compliance conversations that reach your knowledge limit. At that point, you bring in a compliance specialist. Or perhaps you find yourself deeper in HR topics than you can handle, but you are comfortable because you know where to pass the baton.

A problem-solving framework

If you follow the educational paths mentioned earlier, you’ll create a foundation that can support a Go-to relationship. With that knowledge foundation in place, the following framework will be an effective way to help your prospects/clients think through any challenge they bring you.

1. Define the goal by asking, “If we were sitting here celebrating a successful resolution, what are some of the specifics we would be celebrating?”

This question will provide clarity as to what they want/need to accomplish.

2. “What are the PEOPLE issues you need to deal with to achieve a resolution?”

Maybe they have toxic people on the team; perhaps they need new people, or maybe they need to train those they have.

3. “What PRODUCT/SERVICE issues need to be addressed?”

Maybe there is a deliverable to be created, upgraded or even abandoned.

4. “Are there PROCESS issues standing in your way?”

It could be they have the answers they need but aren’t operating in a consistent, process-driven manner.

Will the complete answer be apparent with these questions? Probably not. However, by defining the goal and evaluating the people, product and process issues that determine success, you will help the prospect/client find clarity about what needs to happen next.

Your role as a Go-to advisor isn’t so much to give specific answers; it’s more about asking additional questions to reveal the path leading to the answer.

Is all this necessary?

You could make an argument that this type of progression isn’t necessary. I wouldn’t agree with you, but you could make the argument. After all, you will win the occasional deal based on price alone. Don’t fall into that “easy” trap.

It does take hard work to progress. However, every level you advance toward Go-to status provides exceptional ROI:

  1. It reduces the amount of competition.
  2. The buyer becomes less sensitive to price.
  3. You shorten the sales cycle.
  4. Your retention rate increases.
  5. You will find it easier to access decision-makers.
  6. The level of credibility you bring to the conversation will grow exponentially.

So, I’ll ask you a “not tough” question. Is it worth it to become a Go-to adviser?

Seems like a no-brainer to me.

This article was originally published here.

3 Tactics to Win With Internet Leads (Part 1)

There’s a misnomer about internet leads, and it’s written all over Facebook and proclaimed by many agency owners, producers and industry gurus: “Internet Leads Suck!” Many of the big lead vendors add fuel to the fire with dubious pricing, odd delivery and questionable results. Is the contempt of web leads legitimate? How else can we actually grow our businesses?

My observation from interviewing hundreds of agents on the Insurance Dudes Podcast is that only the best of the best have effective processes to properly build a lead-closing machine — the majority, the naysayers, lack this systemization.

In addition, there’s a disconnect between agent expectations about various lead types’ performance expectations; many agents don’t even know what metrics they should track to effectively create a feasible cost per sale. 

This article, the first of three in this series, will shed some light on the proper tactics needed to support an effective strategy for developing an effective internet tele-funnel.

For the most part, agents who have not been successful with internet leads seem to point their finger in the wrong direction. Most agents, including me (for many years), blame the lead provider. A powerful shift occurs with the epiphany that the common denominator across success AND failure is the same: the lead vendors. 

Well, if some succeed, while others fail, with the very same lead vendors… the issue must not be the leads themselves, but the process by which the leads are worked.

Over the course of making over 13 million of dials, and seeing incredible results, I have seen that most agencies lack a systematized process to follow up on leads. 68% of the time (the first Alpha for you statisticians), your typical live internet lead will take between eight and 21 dials to close — this is the hard data. Using a data set of at least 90 days, these numbers consistently hold true. Because the bulk of leads closed require OVER EIGHT dials for new business to be won, it’s imperative that a highly organized and trackable process is in place. 

Understanding this need for dials, an agent must stay the course for at least a few months to know a true cost per sale. Considering that large companies will commit to a specific marketing budget for the long term, and only pivot once they have insight into performance, why is it that so many agents will eject after just a week or two? 

“Getting your toes wet” is not an option, as it will only lead to poor results. An agent must know the numbers, the spending required and the timeframe of the sales cycle to win with leads — and this framework holds true for any marketing.

Digging further into the 13 million-dial data set, we know that “good” leads have a first-day contact rate of about 15%. Intent, type, cost and everything don’t matter if the contact rate isn’t better than 15%. Let that sink in… to achieve a positive outcome for your tele-funnel’s entry point, the winning metric comes down to connecting on 15 out of 100 dials. This makes for a lot of down time for the people doing the dials, even with a fast (and fully TCPA compliant) dialer.  

See also: Despite COVID, Tech Investment Continues

Agents must break through and understand that the need to put the right players in the right positions is critical. In building your tele-funnel, dials are the highest-quantity activity, while requiring the lowest skill set. This knowledge is crucial to moving “leads that suck” from the first, second or third dial (the average times that average agents call leads) to making eight to 100 dials on a lead.

Once we had calculated the enormous number of daily dials required to reach our goal of $200,000-plus in premium per month, we knew mathematically that we needed 5,000 or more dials per day, as a team, just to hit all of our leads from today, yesterday and from the prior 88 days. 

We were in a race to move these leads — our agency’s latent equity — closer to a sale. We discovered that the more dials on a lead, the less it actually cost, because the potential to make contact, quote and close increased with each dial! 

With this realization, we sought to ensure we could guarantee making the dials we needed without burning out our agents and ensuring they were on the phone doing their most important activity, quoting, at least 10 new households per day. Plugging unlicensed, cheap labor into the top of the funnel also allowed us to continue to fill our pipeline with new prospects while freeing up agents’ days to follow up on unclosed quotes.  

After weeks and months of consistency, training and oversight, we were writing $5,000 to $20,000 or more a day. We had handled the first important piece of the equation: We’d created a systematized process to create predictable results. We had certainty that if we added X leads into the tele-funnel, it would result in Y sales. 

There have been ups and downs, but the word du jour is persistent-consistency

In the next article, I’ll take you into the metrics that need to be looked at, and the necessary baselines that need to be hit to ensure that your tele-funnel machine is functioning properly.

Personal Connections Via Social Media

The insurance industry has historically thrived on face-to-face interactions. A year ago, U.S. life insurance brokers told McKinsey that 90% of their sales conversations and even 70% of their customer follow-ups happened in person. Of course, those numbers plummeted during the pandemic: By May 2020, a follow-up McKinsey survey revealed that in-person interactions had dropped to less than 5%.

To maintain regular interactions with prospects that feel as meaningful and personal as formerly in-person conversations, insurance companies must turn to social media to meet audiences where they’re socializing during the pandemic.

Over the last few years, however, the algorithms that govern organic content’s performance on social media have shifted to make breaking through more difficult for brands. After all, social media platforms exist to make money, and their primary revenue stream is advertising dollars. Insurance companies that used to see engagement simply by posting on their business pages must now begin investing in paid advertising campaigns if they hope to achieve anything resembling earlier organic results.

Unfortunately, this trend is solidifying at a time when most insurance associates — indeed, most people in general — are stretched thin. Life insurance companies are busy handling a significant increase in demand for their services, and property and casualty areas are busy helping customers navigate changes in policies such as low mileage rebates.

Agents simply don’t have the time to focus on marketing themselves right now. In this environment, insurance companies must support them by focusing on social media marketing efforts and examining ways to help agents cut through the noise and foster real, human connections online. These three strategies are excellent places to start.

1. First, equip agents with social selling.

To maximize a paid social strategy, agents need to be engaging with prospects and clients organically on social media first. Enable your agents to practice social selling — which means sharing branded content from their own profiles to their own networks.

A company’s social accounts might offer some brand visibility, but associates have a far greater reach than your brand, and their followers trust their content much more than your company’s content. When agents share helpful information that highlights their expertise, their networks will already begin to see them as trusted resources. This lays a solid foundation for launching a paid campaign with individual agents.

Of course, the last thing any insurance company wants to do is add more demands to their agents’ already full plates. If you want employees to build their social presence organically, you have to make it as easy as possible. Marketing teams can build clear, comprehensive social media policies and train agents on them. Then, they can provide agents with a steady stream of engaging, curated content that aligns with the brand and interests agents’ followers.

See also: Want to See Social Media Genius?

2. Then, tailor social selling with paid advertising.

Paid social should absolutely be a part of your 2021 advertising plans, but you should still incorporate elements of your organic social selling strategy — namely, the agents. Put your individual agents front and center in the ads targeted to the audiences in their respective geographic regions.

Consumers today expect this level of personalization. One report found that 72% of consumers will engage only with marketing messaging that’s tailored to their interests, and Accenture confirmed that most are willing to share the data necessary for a more customized experience.

Ultimately, it’s human nature to seek out person-to-person connections. People trust other people more than companies and brand names. Insurance companies should take every step possible to build, maintain and reinforce the human relationships that were the cornerstone of the industry pre-COVID-19, and getting individual agents in front of the right people on social media is a great way to highlight the human element.

3. Use software to control and expand your efforts.

Insurance companies can no longer rely on mass channels and one-size-fits-all campaigns to establish trust and convert clients. Personalized marketing efforts are increasingly complex, and they’re best handled by marketers with central authority.

As agents deal with the same changes that are rocking the broader industry, they’re relying on marketers to implement complex paid campaigns at the brand, branch and agent levels. That’s a lot for one marketing team to handle, but social media management software exists to make it easier. The right tool can streamline and automate workflows, making sure no ad ever publishes without the correct approvals. This helps ensure each post is compliant and in line with your brand’s style and voice. Software can also allow marketing teams to reach more people on more platforms with simultaneous multiplatform features, allowing campaigns to scale with ease.

With the operational details of executing a social strategy taken care of, marketers can focus more on arming agents with everything they need to create the types of meaningful, human connections that will foster trust and set the stage for strong relationships to come. 

See also: How Social Selling Can Boost Results

The insurance industry upheaval brought on by COVID-19 has necessitated a stark shift in the industry’s approach to advertising. Organizations must strive to build personal relationships and connections from a distance, but a branded organic strategy won’t meet social advertising needs as algorithms evolve. Instead, the insurance companies that pivot to social selling, human content and solutions at scale will rise to the top of the news feed in the coming year.

Agents Must Better Explain Their Value

If agencies can’t do a better job of explaining their value, better marketers will convince consumers they are more ethical than you.

A recent press release from an insurtech caught my attention and ire. What first caught my eye was how the startup measured success in coverage placed, i.e., total policy limits rather than premiums or commissions, to make themselves look successful. For people who don’t know the difference, it was impressive that a 12-person startup agency could place $2 billion in coverage in four years! The average 12-person agency only has $1.2 million to $1.6 million in revenue. This insurtech is outperforming the average agency by 1,430 times!

$2 billion in coverage at $1 million in liability only is just 2,000 policies. Assuming there is some auto and comp and whatever else in there, let’s say 1.5 policies per customer; that is only 1,333 customers; or, in other words, they basically wrote one account per day over four years. Those kinds of policies average around $500 commission each, which may be generous but I’ll use that figure. That amounts to $667,000 in revenue. Divide that by 12 people, and the result is $55,000 revenue per person.

Insurtech is supposed to be about scale. The definition of scale, in all directness, is doing more with fewer people. Scale is nothing else. $55,000 in revenue per person is not scale.

What next caught my attention was their statement that the traditional insurance model provides agents incentives to sell customers policies they don’t need or contain inflated coverage limits. I’d really like to see solid proof that this regularly occurs. I don’t know the captive agent world well, so maybe it happens there, but I doubt it. I know the independent agency world extremely well, and I have rarely seen this happen.

The system actually works the opposite of their statement. In the traditional agency model, for many complex and intertwined reasons, agents actually have more incentive to sell clients less coverage than they need even though they are threatened with E&O suits for doing so! I have seen a large number of agents sued for not selling adequate limits or the right coverages. In the COVID-19 world, has anyone seen an agent sued for selling too much business income insurance?

For 25 years, I have been cajoling, arguing, demanding, yelling and screaming at agents to use coverage checklists, and yet agents are no more likely to use coverage checklists today than 25 years ago. (I’m a failure!) It has been proven over and over in E&O studies that using coverage checklists to ensure clients are offered adequate coverages is the best solution for both clients and agents!

I have only seen one suit brought in the independent agency world for selling too much insurance, and the suit was aimed at the carrier because it was the carrier’s practices, not the agencies’ practices, that allegedly resulted in excessive and unnecessary limits. I’ve never even heard of an agent being sued for selling clients too much insurance.

This insurtech advised that their model works because they make up the difference with finance fees. Their story sounds great to a large proportion of consumers. Consumers do not know how much insurance they need because no agent has ever educated them on how much insurance they need. I teach a lot of insurance classes and have conducted a lot of E&O audits; few people ever discuss the importance of drop down UM coverage on an umbrella policy (in fact, many agents and customer services representatives don’t even talk about the importance of an umbrella policy). Selling unnecessary coverage is really, I mean really, really hard when most agents do not even offer necessary coverage. I was with a retired family member who had paid off his mortgage and wanted to drop his homeowners’ insurance. I explained he would lose his liability coverage. This is an extremely smart person and yet not one single agent in 40 years had ever explained the importance of liability coverage to him!

Professional agents will lose if they don’t educate their clients as to why they need more coverage. They will lose to agents who actually advise those same clients, who do not have enough insurance, that their incumbent agent has actually sold them too much coverage! Pay for what you need, they say, but the consumer has no idea what they need!

See also: 4 Post-COVID-19 Trends for Insurers

A huge proportion of producers exacerbate this problem when their client asks, “How much liability should I purchase?” The producer frequently answers, “As much as you can afford.” What is the difference between this “professional” advice and insurtechs’ advertising, “Buy as much as you can afford.” It’s the same advice! The correct response is to help your customer figure out what they can afford to lose and then recommend that they buy an appropriate limit.

The insurtech’s press release articulates so much of what I see as wrong and unfair in this industry. Yet, the failure of agents to educate their clients and offer the right coverages and their own lack of knowledge about coverages has opened the door wide for this kind of upside-down and sideways marketing pitch to actually make sense to consumers. A low down payment with significant finance fees has been a successful business model for a long, long time.

One other possibly dubious claim is that insureds will still save 35% because carriers are willing to reduce their price because the insurtech agent is so efficient. This claim may be true in some instances because reducing acquisition cost is a huge goal for carriers today. However, a 35% savings? Let’s do the math on this:

The industry average loss ratio has been 61% over the last five years. The average profit margin is around 10%, including investment income. Independent agents are paid an average of around 13%, including comp. So, no matter what an agent does, the most carriers can save is 13% by eliminating agency compensation. An argument may exist relative to some additional savings relative to frictional costs, but not enough. The carriers’ average total expense ratio is around 28% excluding LAE. If I remove the commission of 13%, that only leaves 15%. A 35% reduction in expenses is impossible.

Additionally, using a 61% loss ratio, and if the rate is 35% less, the loss ratio would be 96%, all else being equal. Even if all commissions are eliminated, the loss ratio is still 83%. An 83% loss ratio is not sustainable.

Now, maybe the quoted 35% savings is meant to mirror other disingenuous price saving advertising such as, “The average customer who switched saved $350!” That is an entirely pointless but quite effective ploy. Let’s say 1,000 people shopped that carrier’s site, and 990 stayed with their existing carrier. The remaining 10 saved an average of $350. The people who did not switch may have saved an average of $350 by not switching, so they did not switch! Only counting one side of a ledger is illegal in finance, and perhaps advertising rules should be revised along the same lines. Either way, advertising that carriers are offering lower rates when it is just a math gimmick is mixing and matching in a manner that is highly questionable.

A true 35% savings from the same carrier requires special filings by that carrier or the use of a special purpose PUP company with previously filed deviated rates. That is an awful lot of work for a startup agency that has so little commission they announce sales in total policy limits.

See also: 10 Tips for Moving Online in COVID World

Always check the math on claims like this startup’s. More importantly, sell the right coverages, educate your clients on how much coverage they actually need and show them you won’t sell coverages they do not need. Don’t let firms like this insurtech beat you.

You can find this article originally published here.

How Can Brokers Grow in 2020?

There seem to be infinite possibilities for insurance brokers to grow these days. Here are a few tried-and-true strategies that brokers can take full advantage of in 2020 to stay relevant and elevate themselves to strategic advisers.  

Expand your product and services portfolio

Brokers need to challenge the idea of being specialists, especially because monoline insurance selling is not as prominent as it once was. It will pay off to operate as a generalist with a vast knowledge of multiple available coverages and services rather than focusing on a singular, niche area. Indeed, expanding their portfolio can help brokers manage clients’ entire risk profile, reach new segments of potential clients and elevate them from simply a vendor to a strategic adviser. For example, a broker with clients in healthcare, an industry with acute cyber concerns, might expand his or her portfolio to offer cyber insurance. 

Get out of the Stone Age

In today’s digital world, clients are accustomed to having service at the touch of a button, and brokers must adapt. Implementing technology that boosts efficiency, enables customers to manage their own products and expedites all processes has become a must as clients no longer have patience to work with businesses unwilling to make such changes, regardless of coverage options.  

See also: Realistic Expectations for Insurance in 2020  

Evaluating where strategic investments can be made specific to their business, such as adopting a new agency management system, using data and analytics, white labeling or partnering on risk engineering services, can also fuel growth. For example, using a system like CoverWallet to rate, quote and bind smaller accounts, frees up agents’ time to focus on larger accounts with more revenue potential. Or agents can tap digital partners like IVANS to identify emerging markets faster, which leads to quicker growth. 

Be comfortable with a “blank piece of paper” mindset

Every successful broker has a growth mindset. Although it can be uncomfortable, a great way to grow can start from a “blank piece of paper” mindset. That is, moving away from the “business as usual” mentality and just saying “yes” can lead to unimaginable possibilities and new ideas regarding the evolving service, technology and customer experiences. For example, insurtech companies are super comfortable with a blank piece of paper – it allows them to think, design, build and test new ideas in a fast environment.

Straying away from the idea of perfectionism can lead to meeting new people, creating long-term goals and working on projects you hadn’t considered before. Being willing to start from scratch and think outside the box allows brokers to learn about the field in new ways. The ability to adapt to overcome challenges and a willingness to embrace the unknown are essential skills for successful brokers. A way to work on honing this skill is by looking for new strategies to adopt that allow you to stay up to date on current trends in the field, and maintaining an optimistic mindset. Long-term strategies can come from not being afraid to start at the end of something and working backward toward your goal instead of trying to fix what might be broken.

Have a referral strategy

Putting a referral strategy in place can help brokers capitalize on growth opportunities. Failing to take this step is essentially leaving money on the table.  It’s important to set goals before crafting and implementing a strategy. From there, brokers can make it a habit to think about who they can tap for a referral two or three times a week, and then bring the referral to life. These efforts will add up over time with persistence, gratitude and creativity. 

Referrals are a major business builder and money maker for brokers. When trusted clients, friends, family and colleagues recommend a broker’s services to others it can quickly translate into a new customer. However, brokers can’t rely solely on word-of-mouth referrals. To break free of the referral rut, brokers should leverage both social networking and traditional, in-person networking to organically grow their business, strengthen relationships and reach new audiences.

See also: What a Safer World Means for Brokers  

Invest in strategic partnerships 

Strategic partnerships can allow brokers to push their capabilities to the next level and expand into new areas of insurance. There are three main potential partnerships for brokers to explore: agent aggregators, merger or acquisitions and gaining access to an online marketplace. Agent aggregators offer immediate expansion and resources. Mergers or acquisition can prove successful when two firms specialize in the same niche area or have symbiotic offerings. Lastly, gaining access to an online marketplace is an increasingly common option with the evolution of insurtech.