Last year was the greatest year we had since we started producing back in 2003. Not only did nearly 100 percent of our clients continue to put their faith in us and trust us, but more of them than ever before also sent family, friends and neighbors to us.
We were only about half a dozen more referrals from turning people away this year. And we did it without any kind of marketing or advertising, or even a desire to sell products.
I should explain myself. My partner and I run a niche insurance agency. We are specialists. We sell only one type of product category and three products: Medicare supplements, Medicare Advantage and Part D prescription drug plans.
We sell no other products except in unique circumstances. We try to represent every carrier we can. And every client can call us directly with problems.
When October comes around, we stop marketing. We begin calling all our clients back, and offer to take one more look at their coverage. We don’t try to sell them anything new; we just call our clients and try to determine whether the product we already sold them will meet their needs in the next year. And if it won’t, we fix it so that a new one will.
Once we started taking notice of all the referrals we were getting, we started asking how or why we were referred. The answers were actually a reflection of the three main concepts we use to sell and conduct our business. Let us share them with you.
Don’t go in with a specific product to sell until you know the situation. When we first meet with someone, we do not go in with a decision to sell Carrier A or B. We start fact-finding. The carrier means absolutely nothing at this point. Get the prospect’s prescription bottles — not the list, the bottles themselves.
If you are looking at a Medicare Advantage plan, get the list of the client’s doctors and a list of medical services the client can reasonably expect to use that year. Then, plug the drugs into the Medicare.gov website, and be accurate about it. If clients are serious about finding an Advantage plan, then once you’ve confirmed their drugs with one or two carriers, look at their doctors. Explain the costs, good and bad.
Remember, you are not a doctor. So if a client says they want to change their prescription or their doctor so they can get into a particular insurance plan (which happens more often than it should), you must counsel them that it is better to try to find a different insurance carrier than to risk changing their lifesaving medication or their physician! Insurance is there to protect them. If it puts a person’s life at risk, then the wrong product is in place.
If clients don’t know whether they want a Medicare supplement plus Part D or an Advantage plan, we go over the pros and cons of each. My personal preference is for my clients to go into Medicare supplements.
My parents have a Medicare supplement. I wish I were old enough to have a Medicare supplement! However, I never tell that to my clients unless they specifically ask. I have clients who are perfectly happy in Medicare Advantage plans, but I tell all my clients about the pros and the cons of each type of coverage.
Don’t disparage either choice. Recommend both in the best light possible for their specific situation unless there is an actual lifestyle or medical reason to recommend one plan over another.
When it comes to Medicare supplement prices, I use a web service. For a very small fee, this service will put in front of the client the price of every supplement, whether I sell that supplement or not.
This eliminates the objection “I wanted to see what other prices are out there.” Now, if we hear that objection, we know we do not have this client’s trust. It is almost a magical close when clients can point to a price and carrier name on a screen and say, “I can do that.” The sale is made, and the clients came to that decision themselves.
People don’t need you in order to buy insurance. I’m sorry to break this news, but you are not needed to sell insurance anymore. Internet, direct mail, telephone calls, newspaper inserts, TV ads — even Google — are selling insurance now.
None of these ways of selling is as effective as you are, but they’re catching up. In my world, about one-third of all products are sold by mail, internet or inbound calls direct to insurance companies. Prospects don’t need me, and a lot of them know it. We figured this out and changed our strategy because of it.
We now tell people we are going to become their personal benefits coordinator. We are going to help them when a problem comes up.
Every client has our cellphone numbers. We tell them that if the insurance doesn’t work the way we told them it will, call us. Directly. Don’t call a secretary or an assistant or the company. Call us. We’ll call the company.
We might pass the call off to an assistant or someone who works with us. But the client doesn’t need to know that. They tell us the problem. We call them back with the answer. The client doesn’t care how the problem gets handled as long as the problem gets handled. They need only talk with us, and the rest gets handled as if by magic.
This is our second-best source of referrals: simple claims assistance. Clients may not need you in order to buy insurance, but they definitely need you to help fix it.
Really, it does not take much time out of your day to answer a call, take notes and send them to someone internal to handle. You can be bothered to back up your word with service!
Annual reviews are everything. This is the No. 1 reason for clients sticking with us and referring us — and we stumbled on it by accident. During our first Medicare annual election period, we lost 25 percent of our overall clients and increased our new client number by only about 10 percent, so we started asking those who left us why they did. The answer was simple. Their prescription drugs either were not were covered or covered poorly the next year, so they went somewhere else.
After the new year, we started taking calls from upset clients complaining that their health plans changed. They expected someone to notify them instead of having to read the literature.
So the next year, we started calling all our clients and looking at their plans again, recommending changes when necessary. Our lapse rate began to drop. As selling time became less available because we were doing so many annual reviews in such a short period, we stopped marketing.
After a few years, referral rates rose. The simple act of talking to a client every year to rework their prescriptions and Medicare Advantage copays leads to a client’s friends and family saying, “I want that!”
We don’t lose income by doing this. The drug plans pay a $26 annual commission. This is not something to sustain a business on. But when a client goes to another agent for prescription advice, that other agent doesn’t move just the prescription plan; they move everything.
By protecting these $26 products, we are protecting the hundreds and thousands of dollars in renewals we already earned. When you add in the new referrals, suddenly you have a workable income.
Finally, a word about not representing every company. There is no better way to establish credibility than to tell a person, “The best I can do is Company B. However, Company A might be better, and here is why.” Whether the two companies are close in price or not, clients appreciate the honesty.
If they’re close, a lot of times the client will choose to go with us anyway. If the company we do not offer is just plain better for a client’s specific circumstance, we explain why and connect them with that company. We’ll walk away without the sale, but we did the right thing.
Nothing, absolutely nothing, makes us happier than receiving a referral from someone we directed to a competitor because of the way we conducted ourselves, or that person calling us back the next year and asking us whether we could look at their coverage again because they trust us more than they trust the company they decided to do business with.
Ethics are universal, and we feel these rules transcend all products and will increase the community reputation of any broker. Find out what the client needs before trying to sell it to them, assist with claims and problems, and conduct annual reviews.
This is our three-legged stool, our secret sauce. This is the reason only four out of our 1,200 individual clients dropped us last year. In a world where the economy shifts, the regulatory environment changes and products become more complicated, the act of personalized service for each individual continues to be what each and every client is really looking for.
Elie Harriett co-owns Classic Insurance & Financial Services Co., specializing in Medicare-related insurance. Elie may be reached at [email protected]