I am always amazed when contracting life insurance agents when one of the first questions out of their mouths is what is the commission schedule per product? Why? Before an agent sees the product portfolio and if he or she sees the need for the products and how they may help their clients, their first thought is how much do I make? This is a very telling sign to those of us who have been in the life insurance industry for a long time. The agent is really saying, “I want to sell product that I make the most money on, not the product that is best for my client’s needs”. Not a great first impression. So, learn to sell like you buy.
What I mean by sell like you buy, is no one loves to be sold. You may have heard the expression “people love to buy but hate to be sold”. As a matter of fact, when a consumer feels the agent or salesperson is “me” focused versus “them” focused, they shut down with the famous “I need to think about it”. If an agent or salesperson hears that objection often, he or she should look in the mirror. Reality is if you are offering a product or service that solves a problem or issue and your solution is perceived as more affordable than their issue, they buy every time. In order to be a great life insurance agent or great salesperson, you must listen to the prospect, find the need and use your products and services to eliminate their problem. After all, isn’t this what you want when making a purchase?
If you begin to sell like you buy, you automatically become focused on your client’s needs and not your own. Nothing smells worse than a desperate salesperson or insurance agent. No one can act well enough to overcome the stench of desperation from having to make the sale to eat or pay a bill. You must forget what is best for you and focus on what is best for your client.
The money will come. I am not advocating an agent should not see and understand their commission schedule. I am stating commission should NEVER be the reason to make a sale. If you were needing a life insurance policy to cover a specific need, assuming you did not know much about life insurance. How would you feel to learn after your purchase the agent sold you a policy that was two or three times more expensive than it should have been? Not very happy at all. If you do the right thing and sell your clients the right plan for the best price for their unique situation, you will always make the most money. How you ask? Happy clients always refer the most business when taken good care of versus those clients that you would walk across the street to avoid in public. This is a marathon business not a sprint. Always do the right thing for the client by the mantra sell like you buy.
“A business that makes nothing but money is a poor business”.—Henry Ford
Image courtesy of Stuart Miles at www.freedigitalphotos.net
Tim Wilhoit is owner/principal of Your Friend 4 Life Insurance Agency in Nashville, TN. He is a family man, father of 3, entrepreneur, insurance agent, life insurance broker, salesman, sales trainer, recruiter, public speaker, blogger and team leader with over 27 years of experience in sales and marketing in the insurance and beverage industries.
As anew agent, I really appreciate this article. I will strive to do just that.
Thank you for your kind words Stevie. I wish you the best in our great industry.
People don’t like to be sold, but they love to buy! If we can add value or simply just help someone with every interaction that we make, we will certainly accomplish our objective. Great post with fantastic insight. Thanks for sharing!
As the audience becomes more and more sophisticated they know that insurance agent / broker is providing free investment capital to the insurer. The more sophisticated agent/ broker also realize that they being bought for the least possible compensation. Client service is the last and least element in the insuring process. Is there anyone who really benefits from drinking the cool aid? It is important to proerly define the roles of the agent/ broker in the process. How the public is insured is changing. We are not in Kansas anymore.
Buying is and has to be the goal of anyone that is in any kind of sales.
I find that when you advise and keep in mind the customers needs goals and wants you have aided in the creation of an environment where someone can buy.
When I do management consulting this is the exact phrase and ideology we use to increase customer satisfaction in the companies we consult…and increase in that will increase profits, and many times when sales are down as well. If done correctly will change the environment and the mindset of the staff as well.
Very well stated John, thank you for sharing.
It’s this impression that all insurance agents are “greedy” that has given the industry a black eye. People cringe at the thought of buying any type of insurance because they truly believe that the agent is only in it for the money. Part of this comes from us being told by the government or other entity that we must purchase something we may not want although we definitely need. We must have auto insurance to drive; homeowner’s insurance if you have a mortgage; and health insurance to avoid being fined. These mandates aren’t the fault of the insurance agent, but he’s an easier target to vent on than an elected representative.
The industry as a whole needs to do a better job about educating the public on why the various types of insurances are needed. People are not stupid, just uninformed and we do get angry when forced into a situation that costs us money. The actual numbers aren’t relevant, but there is a statistical chance that you’ll get sick, have a car accident or something happen to your house. All things we are compelled to cover with insurance. However, the one event that has a 100% chance of occurring at some point, our death, has no mandatory requirement. You can fix sick, a car or a house. You can’t fix dead, but a third of Americans have no life insurance. Many more are either underinsured or have the wrong type of insurance primarily due to Tim’s initial comments about agents caring more about their commissions than their clients’ needs. Like Tim said, it’s a marathon, but we need everyone in this race.
Very well stated Gary and spot on for a large part of our industry. I appreciate you sharing it.
I dont understand why you would be “amazed”that a licensed professional would want to know how they are being compensated for their efforts. How does expecting to know compensation equate to one not thinking of what is in a client’s best interest? When you visit a physician the first thing that is expected is your insurance card. That physician expects payment in return for his professional diagnosis and/or services provided to that patient. He also has a right to not accept your insurance if it is inadaquate. Agents have every right to compare commission schedules and make decisions that are in their best interests as well.
Kelli, my amazement is with agents more worried about comp than learning if a plan is right for their clientele. I didn’t mean an agent should work for free, commission is implied in our industry. I am simply amazed with the agents that comp is more important than helping a client. If the product is right, the comp shouldn’t matter, if the client is happy and taken care of then they will refer the agent to tons more business than closing a deal for high commission and have an unhappy client down the road to ruin their reputation. In other words I am speaking of agents stepping over dollars to pick up pennies with being short sighted.
You are SO RIGHT, Tim
There are so many variations on a theme, WHAT does your Client need, what worries him, how can you help? He must “feel the pain”, that is what he needs, you MUST listen and provide solutions. As a n Independent agent, you can give him choices, he is smart enough to earn the money,with riders explained and exit as well as entrance to a policy, he will decide, using your expertise what is best for him. Get to know your client and his/her NEEDS. LISTEN, and DO provide more than one solution….
This is needs based selling – the client’s need, not yours!
Great article!
This is a prime example of what Best Business Practices is and should always be. WHAT IS IN THE CLIENTS BEST INTEREST.
You’re spot on, Tim. Reminds me of one of my favorite quotes:
“The way to get what you want in life is to help enough other people get what they want.”
Zig Ziglar
If you do what’s right,the money follows. I love that Zig Ziglar quote, I’ve been to enough Send out Cards Seminars and Treat em Rights that quote is used frequently.
Oh how right you are!! I interview about 5 to 8 agents a week that want to join our partnership programs at Legacy and for half of those that’s the first question…”What’s the commission you pay agents.” Not “how can you help me get in front of more people” or “What carriers and products do have for my market.” Needless to say, those people that ask the comp question first we pass on; The Agents the “get it” and have a long lasting profitable carrier are the ones who realize the importance of building relationships. Relationships with their clients and value the support their given to help build their business.
Thank you Michael, I really appreciate your comments and glad you liked my article.
fantastic ideas!
Tim , one of the best approaches I have ever read about !! Mark
I will disagree with your hypothesis regarding the request for commission schedules. I have made the mistake of signing on with a IMO/FMO/BGA (or whatever an organization wants to go by) without seeing a commission schedule, only to find that I could be earning a significantly greater commission through a different IMO. I have worked with marketers that provide great value through education and training but, I have found most give nothing extra. I’ll gladly take a haircut if I’m receiving value. If you’re just giving a contract, I want the higher commission.
Ron,
If you go back and reread the last paragraph, I think I answer your question. Agents only interested in the highest commissions almost never do the right thing for their clients because their focus is self serving. Your book will grow exponentially if you focus on the clients needs first. I believe my hypothesis is spot on and I have 22 years of service to prove it.
I don’t think an insurance license qualifies someone to be labeled an advisor, I’d be careful about that title…
on a side note, good post.
Justin, I agree no more than designations make one an advisor or counselor. It is more about doing the right thing for each and every client and prospect. Thank you for your kind words about my article. Much continued success my friend!
Regarding compensation – I agree that I deserve to be paid and to know what I should expect to be paid. That said, compensation is only one component of choosing a product(s) that you’ll enjoy representing to your clients.
I have a great contract with one particular company that pays identical top commissions on two of their indexed annuities. ONE of them, I have no problem marketing and selling, because I like it and I feel comfortable with it. The other? Well… it just doesn’t appeal to me. Same compensation, but that is not the “be all and end all” of my due diligence.
If you have 1 product that you only “so-so” like, and it pays 10%… it would affect the agent that has a conscience. They won’t (shouldn’t) sell it because they can’t get 100% behind it.
Versus another product that you thoroughly like, and it only pays you 6%… which product would you enjoy selling, and therefore sell more of, and in greater volume? The one you like.
It just so happens that the ones I really like ALSO happen to pay me VERY well! But you have to like the product for its own merits FIRST… not just because of the compensation schedule.
But once you have found a product that you really like, you keep looking at others. And part of the reason to keep looking… is to see if it’s “worth it”. You compare it to the products you already like, and you need to see if you’d enjoy selling a product with these features, and if you’d end up taking a “cut in pay” to represent it or not.
That’s part of our responsibility as independent agents – to keep an open mind and to keep looking out for new product innovations that make sense to us, and then represent them to the client.
David, I believe this to be true. My article was just about being the best for your client and not being jaded by the commissions which is self-serving. I believe your client is in your best interest and you like the product so much you own it. That is not always the case in our industry and I really appreciate you sharing this.
Your messageTim,
I agree with you… Great products that solve a clients pain point are never sold, they are simply bought by a happy client. This client will refer others to you because they believe in your core value to help people.