Sell to "Wants," Not to "Needs"

The problem of poor insurance sales is multifaceted.

First, agents typically operate from a "needs analysis" -- how much insurance does the family need given their financial commitment for education, retirement, support, etc. The agent then uses this needs analysis as the basis for their sales presentation. But have you ever seen anyone take action because of need? I only see people take action because of wants. The Centers for Disease Control reports that 61 percent of Americans are overweight and need to lose pounds. But the only ones on a diet are those who want to lose weight.

Sure, you should be diligent and calculate the insurance needs of the family, but that's the same as a physician who calculates how much painkiller you need. He does not discuss it with you. It's a calculation that he does as part of his professional responsibility. Similarly, you must know how much insurance the family needs when it's time to complete the application. But that number should never be discussed with the client as part of the sales conversation. To do so will cripple your effectiveness and allow you to fall back on the "needs" conversation. You must focus on developing the prospect's "want," because they will only buy what they want.

Next, I think agents are confused about the definition of selling. Let me offer two definitions:
o Selling is the asking of appropriate questions so that the prospect sees the correct course of action for themselves.

o Selling is enrolling the prospect in their own vision.

Note that neither definition has anything to do with features and benefits.

Let me illustrate my two definitions of sales with a hypothetical conversation:

Prospect: I don't really know why we agreed to meet with you. We really can't afford any insurance.
Agent: I do help people get enough insurance, but that's not really what I wanted to talk with you about. Before I explain that, let me ask you a question. Since we are not going to talk about insurance, why did you set this time to meet?

P: I'm not sure; I guess you might have something useful to tell us.
A: About what?

P: About how to handle our money better.
A: Why, do you feel it's not handled well now?

P: Well, I make a good living but it always seems we are behind, never able to do the things we want to do or are important, like get enough insurance.
A: Do you think that everyone has priorities?

P: Yes.
A: What are yours?

P: That confuses me sometimes.
A: Really? Is that your new BMW in the driveway?

P: Yes.
A: Do you have a loan on it?

P: Yes.
A: Well, then I guess your priorities are clear. You have decided to put your family in debt and use your limited cash in order to drive a new German automobile. Would you agree that people set their priorities with their checkbook?

P: Yes. And I don't really feel good about it.
A: I think you do, or you wouldn't have bought the car. Do you notice that people do what makes them feel good today?

P: Sure.
A: Do you think this leads to the best decisions?

P: No, not at all, I think it's a little immature.
A: What do you think is mature?

P: Making decisions based on the long run and those things that are really important.
A: What's really important to you?

P: The health of my family, being able to send my kids to good schools, making sure they are happy and protecting them.
A: Do you feel you have made those things a priority -- is the BMW consistent with that?

P: No.
A: Would you like to get on track and start living consistent with your priorities and making financial decisions consistent with them?

P: Yes.
A: Where do you think you should start?

P: Well, I know I need to start placing money in a college fund, and I know I don't have enough insurance should anything happen to me.
A: And God forbid you become disabled; are those you love protected?

P: I'm not sure if I have enough of that protection through work.
A: You tell me. If I could help you with the items you just mentioned so that you start making financial decisions consistent with your visions for your family, those things that are priorities and living the vision of being a responsible father that you have for yourself, would that be valuable for you?

P: Yes, that would be unbelievable.

At this point, the sale is made. The conversations that occur hereafter are mechanical. The prospect now wants to make a change. The product features are nearly irrelevant because the prospect has made an emotional commitment.

Larry Klein, CPA, PFS, CFP, is president of NF Communications Inc., a certified retirement financial advisor, and a Harvard MBA. Over 14,000 financial professionals use his marketing system to obtain more and better clients, increase money under management, increase commissions, and earn more while working less. Details on his winning marketing systems and his book "Marketing Financial Services to Seniors" are available at www.nfcom.com.

The "Emotional" Sale By blending psychology and economics, behavioral economics research has shown that buying life insurance -- with its guarantees of protection and security -- is for many people more than a financial decision. There can be a lot of emotion involved, some positive and some negative, which must be overcome before a consumer will buy. Consumers say they don't buy life insurance because they: o Don't see a need -- They believe premature death is unlikely, it "won't happen to me." o Don't see the value -- They're afraid they will not get their money's worth, or can't fit it into their budget. o Are confused and indecisive -- They're afraid of making a bad decision and don't know how much or what type to buy. Many company sales presentations don't take the emotional factors into account. LIMRA consumer research showed that typical prospects for insurance were more likely to buy life insurance after seeing sales presentations that were designed to match the way people actually make decisions. Based on that research, here are some suggestions that may help close more sales: o Discuss death, but gently -- Increase sensitivity to the possibility of premature death. Do they know someone who died prematurely? What was the financial impact on the family? The idea is not to scare, but to help prepare. o Reinforce the positive -- Purchasing life insurance is for some people another way of showing their love for their family and is a good reason to buy. It's OK to point this out. o Present options -- Consumers react negatively when given just a single option. They want choices among products and payment methods -- as many as three -- and are more likely to buy when given choices. o Use monthly examples -- Express premiums, benefits, and other discussions of money in monthly terms rather than annual premiums or yearly figures. Avoid "per day" examples. People don't think of finances in yearly terms. Closing is a delicate balance, a fact that LIMRA's research confirms. Remember always to keep the consumer's interests uppermost. Provide the right amount of motivation to buy, but don't push too hard. People will back away quickly from a hard sell. Source: LIMRA International