National Underwriter Sales Essentials (Property & Casualty): Red Hot Introductions

Randy Schwantz

• Publisher: The National Underwriter Company
• Year: 2014
• ISBN:
  9781939829719
• Topic: Business
• Subtopic: Insurance
• Index: Business

This fast-paced book will show you how to transform typical referrals into rejection-proof "red hot introduction." Includes a six-step process to help you develop the perfect script for your conversations along with actual script examples. You'll learn the secrets to winning more accounts, generating more revenue, increasing your retention rate, and keeping your pipeline full of qualified prospects.

Part I

The Problem

It’s a Numbers Game

If your sales experience has been anything like mine, you’ve probably been influenced by trainers, sales managers, and books to go after referrals. We’ve been taught over and over again that a referred lead is the best lead. Many of us have bought into, and lived by, the Numbers Game concept – you know, the idea that “activity fixes everything.”

If you keep the marketing and referral machines churning, you will make a certain number of contacts, and out of those contacts you’ll earn a certain number of appointments. Since you do a good job of establishing relationships, uncovering prospects’ needs, and gaining their trust, you will write a certain number of policies.

There are many different “formulas” out there for achieving results with the Numbers Game – “call 10, see 5, write 1” is one formula many of my clients tell me is valid. I’ve also had representatives tell me they go by 10-3-1 and even 15-6-1. Regardless of which ratio describes your situation, many financial services reps find it necessary to contact more and more prospects to produce the same amount of sales.

Now we have to play a new Numbers Game just to stay even. Can you imagine what kind of numbers you would have to generate to actually grow your business? You would need to spend even more time working than you do now. Clearly, we aren’t going to be able to make more money in less time by doing more of what we’ve been doing.

Instead, we need to move from a game of numbers to a game of quality. Instead of having activity goals – how many calls can I make, how many referrals can I obtain – we need to thoughtfully follow and work a quality process that will help us score bigger paychecks faster. The Quality Game actually shortens our sales cycle because it puts us in front of more high-caliber prospects and gives us greater credibility.

Take basketball, for example. It might seem like a numbers game – the more shots you put up, the more you’re going to score. That’s only true, however, if you make the basket. I had a bad game once in high school where I put up twenty shots and only hit two. Fortunately, I had a big guy under the basket scooping up the rebounds and dropping them in.

Selling is like basketball; it’s not just a straight numbers game. It’s a game of quality; it’s about hitting the bucket and scoring. Too often when we ask for referrals, we’re just putting up shots without aiming for the basket. Instead, let’s learn a new way to improve our field goal percentage; let’s find a way to make every shot count.

Your Hidden Prospects

Imagine that sitting in front of you are 100 of your target prospects. They meet your profile of a target prospect because they make the right amount of money, they live in the right size house, their children go to the right school, etc.

About 5% of those people are great prospects because they are actively looking for a solution to a problem. Maybe they’ve had some life-changing event like marriage, the birth of a child or the death of a parent. Therefore, 5 of the 100 (let’s call them “The 5”) are looking for you because they need your help with an immediate problem. The best way for your prospects to find you is through a referral from a center-of-influence like an attorney or CPA. The second best way is for you to cold call your target prospects until you find “The 5” who are looking.

The other 95% of those people might not appear to be good prospects now because they don’t have an immediate need. In fact, “The 95” are actually your hidden prospects. Why? Because many of “The 95” are being underserved by their existing financial services representative. In many cases, they are being underserved and they don’t even realize it. Maybe they have needs that are not being resolved and they have come to accept it as “that’s just the way it is” because they don’t believe there’s a solution to their problem.

What do I mean when I say “The 95” are underserved? I’ve asked many successful financial service reps, “How many people have a problem and don’t know it?” The answer is always eight out of ten. Think about it this way. Don’t most representatives react to their clients insurance or financial needs? How many reps do you know who conduct an effective annual or semi-annual review with their clients? Probably not that many. Most reps are not proactive and, as a result, many of their clients are underserved.

How many of “The 95” do you think are underinsured, overinsured, have poorly performing policies or redundant coverage? How many of them don’t understand what insurance they own, if it truly meets their needs, what rate of return they’re receiving or if they have the correct amount to cover their needs? How many have changed their lifestyle, improved their health, and could get better rates? How many haven’t talked to their representative in the last year? Probably many of them.

That’s why “The 95” are your hidden prospects – because they do need you, but they don’t see it and you don’t see it.

Many financial services reps are convinced “The 95” aren’t good prospects. I think they’re great prospects, but the challenge is getting to them. They don’t respond well to a cold call, and they will never be referred because they’re not in the marketplace talking to attorneys, CPAs, or friends about their dilemmas. Even if you managed to see them, they’d tell you everything is fine because either they don’t know they have a problem or they’ve learned to accept things they way they are. That’s why the traditional referral as we know it won’t get you in front of your hidden prospects, “The 95.” Red Hot Introductions will put you in front of them.

Why Go After “The 95”?

Since we haven’t been able to get in front of “The 95”, we’ve had to go after “The 5” who are looking, continue to work the numbers, and hope we’ll get enough referrals. For many, that’s just the way it is. Yet, as we work through this, I think you’ll see that “The 95” represent a huge market for you. There are three reasons why you should consider going after it.

First, even though the insurance and financial services industry is growing, your part of it is shrinking. Everyone wants a piece of your pie – brokerage houses, banks and financial planners. According to a recent survey that asked, “How many of you would like to buy life insurance from your bank?” Of those polled, 87% said they would. Compare that to 53% who responded the same way just last year. The Internet has also had an impact, allowing consumers to shop for, compare, and buy insurance with a few clicks of the mouse.

The net effect of this is that it’s becoming more and more difficult to find new prospects who want us to represent them when it comes to their insurance and financial needs. If we’re going to keep growing, or in some cases just stay even, we must go after new markets. That’s where “The 95” comes in.

Secondly, and most importantly, you should be going after “The 95” because they need you. If you absolutely believe you’re better than most of your competition, that you can provide your clients with the best products and services and help them attain financial security, then you have a responsibility to find “The 95.” You must help them discover how they’re being underserved and educate them about their options.

Finally, the highest return on your effort will come from “The 95.” Consider this: Of the last ten referrals you acquired, how many were too small, had “mission impossible” situations, or couldn’t afford your recommendations? Honestly, how many were a waste of your time and effort? How many times would you have rather said, “Thanks, but no thanks”? You didn’t because you were afraid your referral source wouldn’t appreciate that kind of attitude.

With a Red Hot Introduction, it actually takes little effort to get in front of “The 95.” Also, you’ll be seeing your best prospects under the most favorable conditions. The problem is that until now you haven’t had a way to consistently and predictably find “The 95” and win their business. We’ll show you how.

What’s Your Prospecting IQ?

As kids, we all took an IQ test. If your school was anything like mine, you didn’t need an IQ test to determine who was slow and who was destined to be valedictorian. But there’s a kind of intelligence that is different than being “book smart.” It’s the ability to know a subject to the point where you can make finer and finer distinctions.

When it comes to prospecting, what is your IQ? How many different ways do you know to ask clients for introductions to their friends and business associates? How effective are you at coaching them on exactly what to say to get you in? How much have you thought about who will help you and why, as well as who hasn’t helped you and why not?

What You Don’t Understand, You Can’t Appreciate

Several years ago I was having dinner with a client in a nice restaurant. As he was looking over the wine list, he asked what kind of wine I liked and which name I normally drank. I told him my wife and I enjoy a nice Merlot and the label we usually buy, which runs about $20 a bottle. So he ordered a Merlot, and we enjoyed it throughout dinner. After the first few tastes he asked me what I thought of it and I responded by saying, “It’s pretty good; it tastes like the wine we drink at home.”

Later on, my client excused himself to make a quick phone call. Being curious, I had to look to see how much the wine cost. Care to guess how much that bottle of Merlot was that we were drinking? Only $95…and I told him it tasted like a $20 Merlot. Was I embarrassed!

Unfortunately, I couldn’t tell the difference between the $95 Merlot and the $20 Merlot. I’m sure if the two were side by side and I tasted them one right after the other, I would notice a difference. Still, I’ve never been to a wine-tasting class and I don’t have an understanding of the subtleties between the high-end and low-end Merlots, so it’s hard to appreciate the differences.

The point of this story is that you probably don’t see any difference between a referral and an introduction, just like I didn’t taste any difference between my $20 bottle of Merlot and my client’s $95 bottle. Yet, there is a difference, a real difference, and it’s more than just cost. I want to help you understand the real differences between referrals and introductions. I trust that, once you appreciate the differences, you’ll never want another referral again.

Nothing Is Either Good or Bad Except by Comparison

In the introduction, I talked about my experience watching a Dallas Cowboys football game on TV, from the 35 yard line, and in a luxury suite. I just commented about understanding the distinctions between two bottles of wine. To understand the differences between referrals and introductions, therefore, we must compare them side by side. I believe that, although referrals are so much better than cold calling, they are still very limiting when compared to Red Hot Introductions.

Referrals are limiting because they don’t enable us to make the greatest amount of money in the least amount of time. There are three key reasons why that is true.

• Too often, we are reluctant to ask for them.

• Our referral sources are often...