Recently, there have been advertisements and articles about "free lunch" seminars for seniors. If you have seen or read any of these ads and articles, you will realize one thing -- they are nothing new.
The protection of seniors and the assets they have accumulated is an "age old" (no pun intended) issue that has been going on longer than most of us have been in the business.
The recent comments and articles are not bashing seminars in general or even free meal social events for seniors. Instead, they are pointing out that there will be an increased regulatory focus on the seminar practices of the few unethical agents and advisers that taint the waters for the rest of us.
The catalyst for this scrutiny are those agents and advisers that scam seniors into buying products that they do not understand by providing "incomprehensible" documents to describe a particular product, and then telling them to sign on the dotted line.
In spite of this scrutiny, seminars are still the most effective way to market, period, provided you keep the best interests of the prospects in mind.
We have found that using other sources like the Internet or direct mail to generate prospect leads have not been nearly as effective. After researching and polling many producers, the feedback we have gotten is that these systems, while sometimes innovative, do not have the track record and are not producing the response usually generated from a social event seminar.
In jus one seminar, you can gain more credibility by presenting yourself and your information in person, in a social setting, than you can through impersonal Internet or direct mail lead generation programs. If you put on an educational, entertaining, and informative event, more people are likely to come and they also are more likely to request follow-up contact from you after the event.
Social event seminars change the emotional dynamic of buying something or making a decision. They give the attendee the ability to digest the information and determine whether you are the kind of person they want to move forward with. If they choose not to do business with you, they still enjoyed a nice evening out with good food, good information, and hopefully, an entertaining and informative presentation.
Of utmost importance is the ability for the attendee to say "No." No pressure and no obligation are the requirements for a properly held seminar that will withstand compliance review. If you go into your workshops with this expectation, it will come through in your delivery. Attendees will feel relaxed and absorb the information you are presenting and the questions you are raising without feeling pressured to purchase something from you. In the current environment of suitability and wealth management, isn't that the kind of relationship you need to foster with your clients?
In addition, methods other than seminar marketing do not provide the same kind of interaction that a social event seminar would. If the client cannot see you, hear you, and touch you, you are only advertising, not marketing!
The difference? Advertising is passive. With advertising, you are hoping someone will respond to the information you have provided.
Marketing, on the other hand, is the proactive attempt to generate responses from a specific demographic, following up with phone calls, newsletters, and client correspondence, coupled with a system to build credibility and trust through personal interaction. This ultimately results in the execution of the sale based on the client's needs, the trust that has been built, and the comfort level you have established with the client. How can you do that through the Internet with new prospects? You can't.
Last year, our top 10 producers all performed social event client seminars, and their numbers are impressive. The average total sales premium per producer was more than $8.6 million, and their average commissions exceeded $550,000. Taking this a step further, our top 25 producers all performed client seminars and their average total sales per producer was just over $4 million, with average commissions in the neighborhood of $250,000.
Because Roster Financial is a national marketing organization, we have multiple sources of lead generation and are constantly researching new outlets and programs. We have yet to find a more cost-effective way to market than performing social event client seminars. If you analyze results on a cost per lead basis, the numbers are comparable to other ways of marketing, but if you analyze results on total sales per buying unit, there is no comparison.
We currently average a 1.5% response rate to our seminar mailings, which on a 5,000 piece mailer would yield 75 attendees. We do much, much better with our seminars. Below is a chart based on our data of average closing ratios and average appointments made and kept, resulting in the average amount of annuity sales. The national average for an annuity sale, $35,000, was used in the calculations.
Starting at the top left of the chart, the first step is to convert total attendees to buying units. A buying unit is defined as one couple or a single person who has the opportunity to take an appointment. In our experience, 70% of attendees will be couples, which equates to 26 buying units, and 30% are single attendees. Based on averages, 75 attendees will equate to 48 buying units.
Next, we calculate the average number of appointments made (Step 2). Based on our experience, the number of buying units that usually indicate they would like to meet with us after the seminar is 50%. A 50% appointment ratio would result in 24 appointments. Of the 24 appointments made, an average of 70% will actually occur, resulting in 17 appointments (Step 3).
In Step 4, we convert our buying units to total possible sales by splitting out the couples to yield two possible sales and adding back in the average number of individuals, which results in an average of 29 total possible sales. Using a conservative 70% closing ratio (Step 5), actual sales would be 20. We now multiply the number of actual sales by the national average premium written on an annuity (Step 6) and get a good idea of what kind of total premium you can expect in this one line of business after performing a seminar series. Our seminar covers multiple lines of business and these numbers only grow.
After reviewing the chart, here are a few questions: How much did your last lead program or Internet marketing effort yield in annuity sales? How about life insurance or long-term care business? Did your marketing effort give you the opportunity to present and sell multiple lines of business?
Giving a seminar that is stimulating, educational, entertaining and, most of all, pertinent to current and future financial concerns is of utmost importance. We are focused now, more than ever, on a total wealth management approach that helps you offer multiple lines of business to your clients. This is important for two reasons. First is suitability. If you are a single purpose planner and focus on selling only one line of business (i.e. fixed annuities), you leave yourself exposed in two ways. First, you may be in the liability loop if that client needs one or more products from another line of business (i.e. life insurance, LTCI, DI etc.). If you are licensed to sell multiple product lines, you have an obligation to identify and analyze your client's needs and recommend suitable products to meet those needs. If you don't, you leave your client and your business at risk.
The second reason to sell multiple product lines is much more positive. A recent study of 150,000 agents clearly showed the correlation of the increase of the number of lines of business sold with the dramatic increase in the amount of premium produced. Our seminar programs ask a number of thought-provoking questions on typical financial concerns that bring to the forefront not just one concern with one solution, but multiple concerns that can be addressed with multiple lines of business.
Client seminars are most certainly viable. In fact, social event seminars are here to stay. Those who say seminars are "dead" are going to continue to leave their client base exposed to other producers who are actively marketing with social event seminars. Remember, if your clients are not coming to your seminar, they are attending someone else's! Those producers who continue to use high-pressure sales and scare tactics will be reprimanded by the regulatory agencies that now have their sights locked on duress-based sales practices. We have found the keys to successful seminar marketing to be consistency in message, honesty in practice, and suitability for the client's needs. These coupled with a turnkey client seminar approach will give you the best opportunity for success.
Timothy J. Hague, Jr., is vice president of the client seminar and lead generation division of Roster Financial LLC. He has overseen thousands of successful seminars over the past six years. Mr. Hague has recruited, taught, and helped create custom seminars for top industry producers.
