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Want Fries With That Life Policy? Upselling by Cross-Selling
We know many businesses in which cross-selling is successful. Restaurants, auto dealers, even hairdressers have excellent cross-selling techniques. Think about all the times when someone at the restaurant asks, “Do you want fries with that?” And then there’s the hairdresser who offers to sell you a shampoo specific to your type of hair. 
If cross-selling works for those businesses, why does the insurance industry seem to struggle with it? We may have some cross-selling experts in the insurance business, but the majority of agents struggle with crossing over from a life sale to, say, a critical illness sale, or from selling a home and auto policy to selling a life insurance policy. Why this struggle? 
The key to the cross-sale lies in my definition of cross-selling: the practice of persuading an existing customer to purchase additional products by convincing them the products are best used together.
Here are two things to remember:
  1. Cross-selling is a practice, and we must practice it. Professional athletes, musicians and actors must practice for hours before they perform. Shouldn’t insurance professionals hold themselves to the same standard?

    Practice, or rather the failure to practice, is our first problem. A professional usually has a coach, someone who helps them perfect their talents. Do you have a coach who can map out your talents, strengths and weaknesses? Do you practice in the mirror, on the way to work, in your office? Do you create your scripts and objections, and practice them? 
  2. Products are best when used together. If you cannot convince clients that the products are best used together, you will struggle at cross-selling. For property/casualty agents, ask the clients how a life policy helps their auto policy. And for life agents, ask clients how a critical illness policy helps their life insurance policy. If you cannot connect how the two go together, the cross-sell is doomed.
The cross-sell must help or enhance the primary policy the client currently has. That’s why a restaurant cross-sells mushrooms on a steak. The auto dealer can cross-sell to the extended warranty, and the hairdresser can cross-sell to a product that promotes hair growth. These are easy cross-sales because they make the original purchase better.
The insurance professional first must be able to describe how an additional policy can enhance the client’s own annuity, long-term care policy, health policy or life policy. If you cannot convince yourself, don’t try to cross-sell it.
Perhaps the easiest cross-sell that enhances a client’s primary product is the health insurance policy. A common health insurance policy purchased is the bronze plan. The bronze plan has a deductible of approximately $6,350. Most folks will have a hard time coming up with $6,350, but they can direct $50 to $100 per month to purchase a plan that helps offset that deductible.  Health insurance agents have been adept at cross-selling hospital indemnity plans, accident plans and critical illness coverage. These plans enhance the primary plan by covering the expenses as well by adding additional benefits.  
Imagine a family of four with a bronze plan. The youngest son breaks his leg playing baseball. The emergency room bill and follow-up doctor’s office bill add up to just over $3,500. Well, the bronze plan didn’t help at all, but the accident policy paid cash to the family to pay the bills and offset the deducible. A small monthly premium helped the family avoid a large credit card bill.
Let’s dig a little deeper and consider the life insurance agent. A home buyer usually recognizes the need to buy some sort of life insurance policy to cover the mortgage. Here is where the cross-sale comes in. Although more people today are surviving heart attacks, cancer and strokes, they are living with the consequences. The consequences of lost wages, extensive out-of-pocket expenses and medical bankruptcies are common even when clients have major medical insurance. Thus the cross-sale is the critical illness product. Term life insurance is for the worst-case scenario — when you go into the hospital but you don’t come out. Critical illness coverage is for coming out of the hospital and facing the consequences of surviving. The two products work together.
When it comes to annuities and investments, you are now looking at income protection products. In the case of the family of four and the broken leg, what if they are trying to build a savings account, perhaps a 401(k) at work or an individual retirement account? A $3,500 hit is hard on their finances. It’s easier to invest in a protection product than cash in their savings.
Let’s consider the property and casualty agent. This is the holy grail for life insurance agents. If only a life agent could get a P/C agent to work with them! P/C agents have the trust and the relationships to do the cross-sale but most of them don’t do it. Why? Because they don’t need to. There is enough money in the P/C business, especially in commercial P/C, that the P/C specialist will not risk their core book of business over a life or health policy. So forget the commercial P/C agent.
Focus instead on the personal lines, home/auto/umbrella account specialists. These agents can easily cross-sell into the term life and critical illness space just by offering the protection. Your client can’t buy it unless they know you offer it! Term insurance to cover mortgage debt is an expectation, so having one agent to cover it all makes sense. A simplified issue term product or nonmedical term product is ideal. 
I am also a fan of the critical illness cross-sell for homeowners protection. Statistics say that one in 310 homes is lost due to fire/wind/hail, but one in 96 is lost due to medical bankruptcies. Thus the critical illness policy should be standard issue for any personal lines risk manager. How much coverage? A simple rule is enough for two years of mortgage payments. However, the more you discuss the value and use of a critical illness policy — to cover everything from travel expenses, deductibles and co-pays to experimental treatment — the greater the need for additional coverage.
Now the truth about cross-selling: Your clients expect you to cross-sell to them! Do you go anywhere or buy anything in which you are not cross-sold? 
Clients expect you to educate them on new products and trends. Clients like to know their agents are taking care of them, keeping them informed and giving them options. Be a value-added resource.
You are investing in your practice, whether you are buying leads, getting referrals or making cold calls. This is time-consuming and expensive, so you need to get the most out of your prospecting activities. Increasing your revenue per account is easier to do than prospecting for new clients.
Increasing your retention also is important. This not only increases your income but defines the type of agent you are. Cross-selling identifies you as a true consultant and resource, instead of a product pusher.
Cross-selling helps you diversify your practice and be prepared for changes. For example, many health-only agents were not prepared for the impact of the Affordable Care Act (ACA) and are no longer in business. Some agents saw the ACA as an opportunity and made the most of it by packaging the complete sell. 
A successful multiline agent told me his secret to cross-selling: Just ask them. Give clients the opportunity to say no and you will be surprised by how often they will say yes. 

Jeff Spain is vice president, channel sales, with Surebridge Insurance, North Richland Hills, Texas. Jeff may be contacted at [email protected] .

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