Every salesperson needs a territory. That's true for the route salesman at Procter & Gamble and the account representative for a major brokerage firm. And it's especially true for the life underwriter. Without a place to go or a person to see, we are temporarily unemployed.
Our territory then is nothing more than a detailed map outlining our planned prospecting and sales activities for a given time period. It would include who we plan to see, call, write or e-mail, and all that we plan to do.
But unlike the route salesperson for Procter & Gamble, whose territory is planned in advance by management, the life underwriter must create his or her own territory. It's the failure in this major function of the salesperson's job that creates the high attrition rates so prevalent in the industry. This failure occurs for three primary reasons:
1. Territory design is a management function for which most agents have not been properly trained.
2. It is very often the first real experience of operating in a proactive environment that an agent has, after spending most of his or her life in a reactive world.
3. Agents do not understand what I call the "Access/Labor" equation, and failing to capitalize on its principles, they are either defeated in their prospecting efforts, or experience frustrating, mediocre results.
A closer look at "Access"
I'd like to focus on the third reason in this article. First, let's define what we mean by the term "Access." According to Webster it is "the ability to approach ... or communicate with," and "capable of being reached or influenced." For our purposes, in sales it comes down to who you know on a favorable basis, and who knows you on a favorable basis. Who is easily accessible to you? It's this degree of accessibility, or access, which will in large measure determine your success in the financial services industry.
Before we move on, let's make something real clear. Having a list of names and phone numbers in hand does not constitute Access -- unless, of course, it's a list of your clients. That's why most lead programs don't work. You've got a name and telephone number on a card, but the person doesn't know you at all. You have no Access. So you may have to call a lot of these leads before you get the desired number of appointments. That's where the Labor comes in.
Now let's alter the situation slightly. Suppose we know the prospect on the lead card just turned 65. Any better? Is the person likely to sign up for Medicare? Maybe, but she might still be working and covered under her employer's group plan. Will she want a Medicare Supplement plan? Most likely, if she signs up for Medicare. Is this becoming a better prospect? Yes, because the situation dictates that she speaks with someone about her options. That makes her slightly more approachable. The situation increases the Access and reduces the Labor.
Now let's change things up a little more. Suppose an appreciative client, who just purchased a Medicare Supplement plan from you, suggests you call her neighbor, who just turned 65 and is in the market for health coverage. Would that be a better lead? Of course! Now when you call the prospect, instead of just a name on a card, you have the "borrowed prestige" of your client. That's more powerful. Well how about if the prospect herself called you, told you her neighbor liked doing business with you, and asked if you would mind helping her, too? Bingo! Can it get any better? Sure it can.
How about if one of your longtime insurance clients called to remind you that he was turning 65 next month and would like your help with a Medicare Supplement plan. How many of those calls turn into an appointment? One hundred percent -- that's great Access! Compare that with the number of calls made to names on a lead card. How many of those turn into kept appointments? Fifty percent or maybe less. You would need to make at least twice as many calls because you have little Access and no prestige. How about the number of calls made to people on a list who just turned 65? There's some expectation of need there, because of their age, but again, you have no Access and no prestige, so you'd expect to put forth more Labor.
Do you see where I'm going with this? Write this down and look at it every day: As it relates to getting your desired number of appointments each week, the greater the degree of Access one has, the lower the amount of Labor required to achieve an equivalent task. Conversely, the less Access one has, the greater the amount of Labor required.
Creating "Access"
How much Access do you have in your market? Not enough? Don't worry, you can create it. However, it is critically important that you know where you are today on the Access/Labor equation. It will spare you a great deal of frustration.
Before we get into how it works, let's dispel a few myths (or half-truths) that have been circulating for years:
"It's a numbers game. If you call 10 prospects, you'll get three appointments and make one sale. We've run the numbers for years and they work every time." Really? And it doesn't matter if I'm calling strangers off a list or referred leads or clients? Of course it matters.
"If you have five interviews, you'll get three closes, and make one sale." Substitute your own numbers. The point is the same. These generalities ignore the irrefutable premise of the Access/Labor equation.
What has frustrated insurance agents for years is that these formulas don't work with any consistency. You watch Top-of-the-Table agents call 10 people each week and secure nine or 10 appointments while you're laboring through long lists of strangers to get one or two interviews. Is the Top-of-the-Table agent that much better on the phone? No, but what's happening is that that top agent is on the other end of the Access/Labor equation from you. He's using high Access and low Labor, while you are using low Access and lots of Labor (in this case, phone calls).
This situation is further complicated in the sales training process. Companies spend millions of dollars collectively to teach their agents selling systems and sales ideas that they anticipate will help them make more sales and produce more premium income. The problem is most of these agents don't have enough prospects to try these sales ideas on. They simply can't get in front of enough people. They end up leaving the business with an armload of great ideas on Split-Dollar, Deferred Compensation, Executive Bonus, or some other concept or product. What they have failed to do is understand the Access/Labor equation, and make it work for them. Let's examine how the Access/Labor equation works.
This bears repeating: The Access/Labor equation holds that the greater the degree of Access a person enjoys, the lower the amount of Labor required to achieve similar results. Conversely, the lower the level of Access, the greater the Labor required to achieve those results (for our purposes, the results are selling appointments.)
Move to the inside track
Let's look at it with this example. Picture a circular running track about one-eighth of a mile around. Let's say a runner can get around this track in 40 seconds. Now add another track around the first one, only larger -- a quarter-mile around. How long will it take for our runner to get around the second track? Probably twice as long. And if we added a third track that was a half-mile around, it would take even longer to get around the third track, at least three times as long as the first track. That's exactly how prospecting works.
If track one represents existing clients, it may only require 12 calls to reach our goal of 10 appointments. Our Access to these clients will reduce the Labor necessary to reach our objective of 10 appointments.
Let's assume track two represents friends in our natural market. A relationship does exist and we enjoy some Access, but they haven't as yet done business with us. Perhaps they already have an insurance advisor. Nonetheless, Access does exist, so it may only take 20 phone calls to these people to secure our 10 appointments for the week. Do you think it makes sense to put some effort into expanding your natural market?
Track three may represent referred leads. We don't have as close of a relationship with these people as we do with close friends, but we have something else. We have the borrowed prestige of the person who referred us. If that was a client, the referral will carry a lot of weight. So how many calls do you think it would take with these people to land your 10 appointments for the week? Fifteen? Twenty? Less? More? It will probably depend on the relationship that exists between the person who referred you and the prospect.
What if we turned this referral into a Power Referral? A Power Referral is when you get your new or existing client to call a friend or neighbor on your behalf and suggest to them they meet with you. How many of those might be turned into appointments?
I think you can see where I'm going with all this. As we move to the outer tracks, we see things like "newcomer" lists and notices of births and marriages. In these instances, the prospects may have a reason to discuss life insurance with someone, but since they don't know you, they are unlikely to grant you the appointment. If we're keeping track, and I encourage you to do so, these people would reside out around tracks number nine or 10. Our lack of Access with these people would cause us to make 50, 60, or more phone calls to reach our goal of 10 appointments. That's a lot more Labor than when calling referrals. Of course, calling from directories, where no Access exists and no reason to buy is apparent, may require 100 or more phone calls to reach our objective.
Each of us should stop now and consider the tracks we are running on. If most of our activity is generated on the outside tracks, we have a lot of running to do. But even on the outside tracks, we can generate referred leads. And through these referred leads we move immediately to the inside tracks where the Labor is less intensive, and the results are better.
Remember, life is better when working on the inside tracks, where sales are more plentiful. Take every opportunity to get referrals which land you immediately on the inside tracks. And regardless of which track you find yourself on, keep working each week until you reach your appointment-setting objective, whether it be five, 10 or more. Set your own schedule, make the Access/Labor equation work for you, and you will find your income grow, your stress level reduce, and your whole attitude toward life change for the better.
Agent A vs. Agent B: Access in Action
Suppose two agents set out to secure 10 selling appointments this week. Agent A has a list in front of him of all the members of a private country club. He assumes they all have money (a reasonable assumption), and therefore all would be great prospects for life insurance.
Unfortunately, Agent A is not a member of this club, and will very shortly learn that his lack of Access will defeat him. He may have to call 100 or more names off this list in order to secure his 10 appointments. Because of his limited Access (members of the club who know him on a favorable basis), he must substitute Labor (many more phone calls) to reach his goal.
Agent B, on the other hand, has in front of her a list of referred leads that she obtained from policyholders and acquaintances in the community. When she calls, she is able to draw on the borrowed prestige of the referent, and can capitalize on the Access they enjoy. Accordingly, she may only have to call 15 or 20 of these referrals to secure her 10 selling interviews.
The efforts of both agents are mathematically equivalent. One hundred-plus phone calls to strangers accomplishes the same result as 15 or 20 phone calls to those of greater Access. To improve your level of success, you must increase your Access.
Where do you fall?
Here's a suggestion: Set up a prospect file drawer with 10 manila folders, labeled 1-10. One might be clients; two, close friends; three, referrals; four, orphan policyholders; five, direct mail leads, etc. Create less Access as you move to the 10th folder.
Each time you get a prospect, put it in the appropriate file. You'll quickly see where you fall on the Access/Labor equation. Remember to ask yourself each week, "What have I done this week to increase my Access in the community?"
When I was an agency manager for a large insurance company, I had my agents answer that question each and every week, in writing. I suggest that those of you who are agency or branch managers, do the same. In the agents' answers, I was looking for things like a speaking engagement, a seminar on an insurance-related topic, or perhaps just a topic of interest, such as joining a rotary club. The point is that they might not succeed in gaining more Access each and every week, but if you hold them accountable, they will be thinking about it every week and the results will begin to show.
Frank J. McCarthy, CLU, RHU, is president of Mid Level Marketing Insurance Group, a Florida-based company focused on sales training and distribution of unique products for life insurance producers.
