Thursday, December 2

If all you have is a hammer, every problem looks like a nail

Being in an introspective frame of mind today, I did some thinking about past sales calls that inexplicably failed.  While there are a variety of reasons, I now recognize that in a few notable cases my failure to determine what the customers wanted may have been the deciding factor.  One example from about six weeks ago should illustrate what I mean.  I made a call on an existing customer at his place of business and was able to speak with him on the spot.  Before making the call I determined that several years earlier he had taken out a disability policy that pays a small benefit, something like $750 per month.  Based on this I made two assumptions: 1) the customer had some degree of interest in protecting himself against disability, given that he’d kept this policy in effect for several years; and 2) the benefit amount was much too small for his present needs.  I figured I could sell him an additional policy* paying maybe $2,000 per month, which combined with the existing policy would give him a decent amount of coverage.  Given these assumptions I did not spend a few minutes discussing the customer’s insurance needs and instead went right into the pitch for an additional disability policy. 

My approach failed completely.  The customer displayed no interest in further disability coverage, and even though he’d originally said he could spare 15 or 20 minutes, after just a few minutes he said he was busy and couldn’t talk any longer.  As he was fairly young even a $2,000-per-month policy would be inexpensive, but trying to make that point got me nowhere with him.  I slunk away with nothing more than the customer’s meaningless “let me think about it” non-promise.

It’s now crystal-clear to me what happened.  To me, the customer’s existing coverage may have seemed wholly inadequate, but he might have been satisfied notwithstanding the low benefit.  One possibility is that he figured his chances of becoming disabled and missing work were so low that he just wasn’t willing to spend any more than the minimal premium for the $750 policy.  Or he might have preferred to rely on savings in case of disability, rather than pay the premiums for a larger policy that he’d never use.  Or there’s even the chance that he had some employer-provided disability protection; I would have know if I’d asked, but of course I went straight into the sales pitch.

What made my disability-or-nothing sales approach especially bad is the fact that the customer might have been receptive to an offer for other types of coverage.  For instance, he might have had a significant family history of cancer, and therefore have been open to buying a cancer policy.  Had I spent a few minutes evaluating his needs, which is one of the first lessons taught in sales training, I may well have uncovered this and been able to make a sale.  Unfortunately, my eagerness to sell a disability policy – the policy type that usually pays the highest commissions – led me astray, and I walked away having earned a goose egg.  This is a lesson that I must keep in mind for the future, unfortunately there’s no chance that I will be able to go back to this particular customer and try to sell him something else.  It wouldn’t surprise me if he cancels his existing policy.

As for today’s activities, I made some customer calls in two eastern Suffolk communities, trying to set up some calls for next week.  I didn’t make any sales, which isn’t surprising as this is turning out to be a very, very slow week for everyone else in the office.  Insurance is not, strictly speaking, a seasonal business, but nevertheless November and December are the worst months of the year by some considerable margin.  Oh, one more thing, I got sidetracked with other things in the evening and never made it to the gym.  Two missed days in a row, not good.

* = if a customer needs additional disability or life insurance, the proper approach is to sell an additional policy that will bring coverage up to the desired amount when added to the existing one.  Canceling the existing policy and writing a new one for the total amount desired is not permitted, as it is not in the customer’s best interest given that premiums for these types of policies are based on age.  For example, the total premiums for a $1,000-per-month disability policy written at age 25 and a $2,000-per-month policy written at age 30 will be less than the premium for a $3,000-per-month policy written at age 30.

Published in: on December 4, 2010 at 5:49 pm  Comments (1)  

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One CommentLeave a comment

  1. Thank you, for a alternative insight.

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