Our culture has branded the individual who sells insurance as a pariah. Why? Insurance protects millions of families from financial devastation. Life insurance in particular makes sure that families keep their homes and that children go on to receive a college education if the primary breadwinner meets an untimely end.
I’m proud to be affiliated with our industry. The individuals I know who sell insurance make an important difference in the lives of their clients by providing them with financial security. Need proof? Ask any agent who has ever delivered a death benefit check to a struggling widow or widower thanks to the deceased’s forethought in purchasing a life insurance policy.
So then why does the public loathe the idea of spending time with a life insurance professional? There are several possible explanations:
- Insurance professionals remind individuals of their mortality and that bad things can happen to them. Most people prefer to focus on the positive instead of protecting against the negative.
- Insurance can be complicated. There are definitions, exclusions, provisions and riders. People want to simplify their lives and insurance can be complex.
- Instances of poor customer service reflect badly on the industry. Every time a customer is treated poorly or is ig-nored, the industry gets a black eye.
And while all of these issues are problematic, the one issue I encounter that causes me to personally recoil in dis-gust is the way some individuals in our industry approach the sales process. It is this process that causes state and federal regulators to cast a suspicious eye toward insurance companies.
Let me give you an example. Have you ever heard a supposed insurance sales guru say: “Don’t leave money on the table. Do everything you can to prevent your client’s assets from going elsewhere.” That advice is an affront to common sense.
Most clients wisely embrace the concept of diversification. Having financial assets spread across different types of investments reduces risk. After what happened with Enron, most everyone with an ounce of financial acumen would agree that putting all your retirement assets in one company’s stock could be a potential recipe for disaster.
The same can be said of companies. When consumers purchase a financial product, they want to make sure that the company they are doing business with now is still solvent and able to meet their obligations in the coming decades when they need them.
None of us can say with 100 percent certainty what the future holds for any company. Who would have guessed a decade ago that AIG would need to take money from the federal government to stay afloat? I certainly didn’t. Spreading risk across financial institutions is just as sensible and diversifying your investment portfolio. “Don’t put all your eggs in one basket,” applies to both situations. Yet sales gurus will advocate approaches that violate common sense and prudent financial practices.
Here is another example: Beware the sales guru who says, “You need to get your clients to follow all of your advice.” This is a completely backwards approach. Financial advisors should first and foremost be LISTENING to clients and helping them to achieve THEIR goals. Asking clients to follow all your advice is the hallmark of the “one size fits all” financial advisor who wants to appear all knowing while prescribing the singular path to financial enlightenment.
And while the one size fits all approach may be easy and convenient, creating customized plans, tailored to clients’ individual needs is the hallmark of a true professional. (Are you listening, Suze Orman?)
So what’s the alternative? Relationships are the key to long-term success and building a business. To build rela-tionships, financial practitioners need to embrace a needs-based perspective focused on helping clients achieve fi-nancial security. This is an approach that at its heart embraces the wisdom of Solomon Huebner, the founder of The American College, who in the late 1920s began asking all individuals who earned the Chartered Life Underwrit-er, (CLU) designation to make the following pledge:
“In all my professional relationships, I pledge myself to the following rule of ethical conduct: I shall, in light of all conditions surrounding those I serve, which I shall make every conscientious effort to ascertain and understand, render that service which, in the same circumstances, I would apply to myself.”
Simply put, treat others the way you would want to be treated.
With a needs-based sales approach, the focus is on the customer, rather than on the product being sold. You build long-term trust with customers by providing them with financial services that help them achieve their objectives. And when you establish a bond of trust by selling clients what they need, as opposed to what you want to sell, you create a relationship that leads to repeat business and a more profitable practice.
Sales and marketing techniques applied in arrogance with no regard for the intelligence and common sense of the consumer make this honorable industry look as if it only cares about making a fast buck.
This is why designations are important. In addition to teaching fundamental product knowledge and sales skills, these programs require ethics training grounded in the idea that we should treat our customers the same way we ourselves would want to be treated.
As we enter 2013, each of us has the opportunity to reflect and renew our efforts to improve ourselves. If you are leading an insurance sales team, make sure your marketing techniques focus on the customer’s needs. To do less reflects badly on our industry and diminishes the reputation earned by decades of financial practitioners who sought to make insurance an honorable profession.
Do you agree? I invite you to write me at InsuranceNewsNet and share your perspectives. Let’s get a thoughtful dia-logue started.