What’s your biggest problem?
What is the biggest problem when running a protection distributor?
Is it staff? Is it leads? Is it product knowledge? Is it Insurers?
No... it’s the PAST!!
However much you focus on today, the past can bite you in the arse so easily.
Clawback is the most horrible trap
You've got to find the cash to keep going, so the only way to do that is to keep selling.
“It just feels like we're making sales to pay for clawback, it's horrible”
It’s a stressful, unrelenting nightmare.
There are some rare cases where the business manage to make it work, usually the biggest ones such as LifeSearch and Reassured.
But that’s only through economy of scale - their ability to buy leads in particular - that they achieve this.
What do the numbers look like?
Many businesses are typically losing 50% of the business they put on risk at first, only to try and save enough to end up on a “safe” level of between 20 and 30%.
IT IS RIDICULOUS!
Is your clawback over 20%?
If you’re in this place yourself now, you have two choices:
-
Keep your head in the sand, and keep putting off the problem. HOPING it will get better.
-
Face up to bare facts, accept that’s just plain silly - and look for another way!
What if you could sell MORE business, but with lower clawback?
Selling protection is one of the hardest things to sell well - it’s intangible, I don’t need it immediately and I can cancel it at any time.
There are MANY things that go into making a great protection sale. But some key questions to ask your team are:
1. Would you really buy life insurance in one call?
I'm taking out a contract from you for 20 years and on average will be spending £25 per month. Am I really likely to make a considered decision on it in less than 30 minutes? And I probably started looking online for it 10 minutes ago...
Most people would NEVER buy life insurance in one call, and yet so often I hear of companies trying to do this!
In fact it's often only IMPULSE customers who are happy buying in this way, and what do people who buy on impulse do? Cancel more easily!
To me this is simply yet another sign of desperate selling. When you learn how to build trust with your customers properly, you can make the sale in two calls. You'll still get the same amount of business, but much more of it will stick!
2. What are your team thinking about at the start of a call?
When you think of the customer as a potential target, you sound like a salesman. Think about how you feel when a "salesperson" tries to sell to you!
Are your sales team interested in the customer at first, or in the sale? If all you do is come across as a sales person desperately trying to find a solution, rather than trying to build a genuine relationship with a customer.
When you learn how to be genuinely interested in the customer at first, and not head straight into the sale, the customer trusts you more. The result is higher average commission, higher conversion - and lower clawback!
3. Do customers REALLY understand what you're talking about?
Life insurance is complicated. It's often cited as one of the top 5 reasons that people don't buy life insurance. And yet I hear so many sales calls that are rushed, and where very complicated concepts such as "level versus decreasing term", "split versus joint" and "critical illness cover" are so unclear in their explanations. Because it's a lot hard to explain it than you think!
If you didn't understand something would you happily buy something? If you did buy something would you then likely question it afterwards?
Learn to SLOW DOWN at key points, and learn how to explain things in a simple way that customers understand. If you do this everyone wins!
... OR MAYBE I COULD HELP?
I've been working at the coalface of sales and marketing in the protection industry since 2004, and having seen this issue too many times decided to come up with a plan to fix it!
I've been working on a brand new protection sales training workshop for some of my existing consultancy clients. Their feedback has been fantastic - so I thought why not see if other businesses would find it useful?
Don’t just take my word for it…
Take one of my clients Cavendish Online. Their clawback is trending at under 10% after 4 years. They’ve already won awards for their KPI’s, and I’m pretty sure they have more waiting around the corner!
And check out this review from another of my clients Joe D'Cunha, General Manager of Albany Park:
"I would highly recommend this workshop to anyone working in sales, whether at the start of your sales career or an established salesperson. I've worked in sales for 10 years now and I learned an incredible amount, most importantly, about the psychology of sales which can be applied to any industry. Luke is very passionate and interactive and is able to keep you fully engaged. It has now formed part of our induction for every new sales person we hire - his training is worth every penny!"
New Protection Sales Training Workshops
Let me teach you and your team the unique combination of psychology, sales technique and process required to make GREAT protection sales with lower clawback.
My sales training workshops are available from only £1800 per session, no matter how many in your team.
I'm chocker for October, but have some space now in November and early December. Maybe it could be just the thing your team needs to start off 2020 with a bang!
Call me today on 020 8050 2537 or visit https://lukea1.sg-host.com/sales-training-workshops/ for more info.
The 16 biggest mistakes Protection Distributors make – Mistake 16: Financial Provisioning
The commission you receive from Insurers is not your money yet. It is just an advance. And you MUST treat it like that.
It’s a bit like tax.
If you don’t put the money that you owe in the future into a separate ring-fenced account, then you’re walking a dangerous tightrope.
You must predict what clawback you are likely to receive over your entire clawback period.
Depending on your business, this will typically be anywhere between 15% and 30% of your commission income from the insurers.
I have a client for whom we have deliberately developed a “low clawback” process in which the predicted clawback over 4 years is less than 10%, but that is a rarity.
Don’t use the extra money
Take this amount of money immediately and store it in a ring-fenced account, so that you do not spend it.
- Don’t be tempted to spend it on marketing.
- Don’t consider it in the calculation of your profits.
- Don’t use it as an investment in other opportunities.
The money is not yours, and it will be taken from you at some point (when the policies get cancelled).
There are countless protection distributors, both large and small, who have made this very mistake. It rarely ends well for them.
The only ones who have survived after this mistake are those who have applied questionable financial manoeuvring techniques to survive. This may not be an option for you; either in reality or as per your morals.
Simply put, make sure you provision for clawback effectively and keep this money separate!
_____________________________________________________________________
Want help with provisioning? Get in touch >> or schedule a call with me here.
_____________________________________________________________________
The 16 biggest mistakes Protection Distributors make – Mistake 15: Eggs in Baskets
The unspoken danger relevant to several protection distributors is the extent to which they rely on one particular Insurer.
While STP and keeping training costs low are important elements, it is also important to ask some serious questions:
- Would you rely on more than 50% of your business to come from one customer?
- Do you think it is dangerous when more than 50% of your business is dependent on one supplier
Relying on one Insurer?
Relying too heavily on one insurer can seem like a good short-term choice, but in the long term, it causes the following issues for your business:
- It increases your business risk
- It decreases your business value
_____________________________________________________________________
Get in touch >> or schedule a call with me here.
_____________________________________________________________________
The 16 biggest mistakes Protection Distributors make – Mistake 14: Desperation
The danger of desperate sales people
A lack of detailed sales processes results in sales people who are desperate to make sales. They often begin to cut corners in a variety of ways:
- Only offering limited options for both product and insurer
- Not giving the customers the time to move at their own pace
- Selling mainly on the basis of being the cheapest
This results in lower average commissions and higher clawback. It’s a self-perpetuating cycle!
At worst, desperate sales people begin to cut corners even more in the form of deliberate non-disclosure to achieve a sale with “standard rate” underwriting.
The effect on customers:
- Customers don’t buy, because they don’t understand their options, the need for protection, or simply don’t trust the salesperson.
- Customers cancel, because they don’t understand the value of what they’ve bought, the choices they have made, or feel that they were “forced” into purchasing.
_____________________________________________________________________
Are your sales team desperate? Get in touch >> or schedule a call with me here.
_____________________________________________________________________
The 16 biggest mistakes Protection Distributors make – Mistake 13: Head in the Sand
Just stay positive, right?
Running a protection business can impact the core of even the most secure individual.
You have to continue leading, even while under pressure, and deal with the fear of failure and all the doubt demons… AND all of this is without actually having anyone who really understands what it is like to be in your position.
It’s no wonder that you feel you HAVE to be positive all the time. If you weren’t, then a bottle of the hard stuff, followed by a long, cold swim out to the ocean may seem like the only sensible option! Losing the ability to be realistic is very easy.
I am NOT your positivity guru.
If that wasn’t bad enough, the endless input from performance coaches and self-help books will make you believe that relentless positivity is enough to get you where you want to be. But will you really get there just by being positive?
- Will positivity alone help you if your sales are down?
- Will having a great attitude help you if your cash flow is screwed?
“The only thing standing between you and your goal is the bullshit story you keep telling yourself as to why you can’t achieve it” –Jordan Belfort
Face up to bare facts.
Sometimes, it is easier to keep hoping everything is going to be fine rather than facing up to a really, really scary issue. But this wishful thinking is equivalent to burying your head in the sand. And that happens simply because we are scared.
The greatest businesses and most courageous people examine every issue, even the ones they don’t think can be solved at first. By hiding from a problem, you’ll simply be delaying the inevitable; you’ll have to face it at some stage anyway!
“Face reality as it is, not as if it was or as you wish it to be.” –Jack Welch
No matter how horrible or scary a problem is, if you can see it arising today or anytime around the corner, you MUST have the courage to face it now. Otherwise, you’re only prolonging the pain!
The secret is maintaining a healthy balance between positivity and reality.
_____________________________________________________________________
Need help with a big problem? Get in touch >> or schedule a call with me here.
_____________________________________________________________________
The 16 biggest mistakes Protection Distributors make – Mistake 12: Being too Emotional
- Do you get really excited when you’ve had a good day?
- Do you get stressed and frustrated when you’ve had a bad day?
There’s nothing wrong with being happy about a successful day but be careful that you keep a check on it.
No business can get amazing results EVERYDAY. It’s important to be realistic.
EVERY business will have bad days. It is also important not to let any frustration translate into negativity or desperation in your team.
Extremities of emotion from the business leaders, especially negative ones, will be hard for your team to cope with. No matter how much they try showing that it doesn’t affect them, it does!
They look to you to motivate them in tough times as much as in celebrating their successes. And any hint of desperation from you will not inspire your team in the right way.
Just keep a check on yourself; do not be too excited on a good day and too dismal on a bad day.
Use the bad days to spot what can be improved
“There’s no such thing as a bad day, only a process that isn’t working”
Every bad day is simply an opportunity to identify what needs to be improved.
Think ahead . . . what processes could you improve to prevent the bad days from occurring again?
TOP TIP: If the performance of your business is consistently bad, then you may have a bigger problem.
_____________________________________________________________________
Get in touch >> or schedule a call with me here and I'll see if I can help.
_____________________________________________________________________
The 16 biggest mistakes Protection Distributors make – Mistake 11: Knee-jerk Decisions
Many protection businesses react hastily to day-to-day and month-on-month trading issues.
They end up in a constant cycle of decisionmaking that is primarily based on the road immediately in front of them rather than in consideration of the long term. They don’t take the time to think decisions through properly.
The effect of knee-jerk decisions
Most people say they like change; however, most people in fact DO NOT like change at all. This is because, for most people, change can make them feel as if they have no control over matters.
Especially in sales teams, any change will probably take time to blend in. It can take as much as three months for most people to get used to any changes that you implement.
It means your business can end up in a constant state of flux, and that negates any potential positive from the changes you make anyway!
A great idea today will remain a great idea tomorrow
If you have a great idea, sleep on it for a while.
Waiting for a few days just to make sure that an idea really IS a good one can prevent your team from feeling as if they’re constantly yoyoing to keep up with the changes!
_____________________________________________________________________
Want to improve your protection business? Get in touch >> or schedule a call with me here.
_____________________________________________________________________
The 16 biggest mistakes Protection Distributors make – Mistake 10: Filler Words
An unconfident salesperson adds many “filler words” in response to a customer’s answers to their questions:
“Perfect”
“No worries”
“No problem”
“Excellent”
This is not something that would happen in a normal conversation. Filler words come off as sounding desperate.
They sound like a sales pitch, as if saying, “Perfect, this means I can sell to you”. The best protection salespeople sound like experts, NOT sales people.
So, it is critical that you keep your filler words to a minimum.
Develop your team to ask questions and then simply wait for a customer’s response confidently. Without filler of course.
Make it sound like a normal conversation!
_____________________________________________________________________
Get in touch >> or schedule a call with me here.
_____________________________________________________________________
The 16 biggest mistakes Protection Distributors make – Mistake 9: Nudging Questions
Many sales training programs encourage people to ask “nudging” questions during the sales process.
Questions such as the following:
“How does that sound?”
“Does that seem good?”
Nudging questions lead to clawback.
Every time you ask, “How does that sound?”, and consider a positive response as an approval to progress, you are simply NUDGING a customer along the sales process – as opposed to asking them to take clear steps towards a sale.
The customer concerned may end up buying something they don’t truly understand, since they’ve been nudged along a little too hurriedly, without being given the time to make their own fully-informed decision.
This allows a sales person to cheat the system easily and leads to higher clawback.
Use closed questions
Closed questions have definitive answers, and allow the customer to make an explicit choice. Use closed questions in your sales process, as that will lead to lower clawback. For example:
“So would you like the policy to cover your family as well, or just your mortgage?”
“So would like the policy to last until your children leave home, or until you retire?”
“So would you like your policy with Critical Illness Cover or without?”
_____________________________________________________________________
Want to improve your sales technique? Get in touch >> or schedule a call with me here.
_____________________________________________________________________
The 16 biggest mistakes Protection Distributors make – Mistake 8: Vague Scripts
How much control do you REALLY have?
Most sales processes related to protection are nothing more than a few pages of scripting and a flow chart, which results in the lack of control over your sales process.
Without a detailed and structured process, most sales people will be doing varied things on each call. With a larger team, everyone will be doing different things from each other.
- How can you spot mistakes when there is no detailed sales process to check against?
- How do you correct and improve people effectively?
- How can you help people effectively when they stop performing?
- How can you genuinely say that every call is compliant?
The lack of control can lead to desperate sales people who:
- Sell only on price
- Rush towards closure to “get the deal”
- Miss opportunities for up-selling and crossselling
The result is a lower average commission or higher clawback! At best, the sales people will lose confidence, and at worst, it can lead to deliberate non-disclosure; fraudulently achieving a sale with “standard rate” underwriting.
What does an effective and controlled sales process look like?
- A detailed “decision-tree” based script
- Structured call flow with stages simplified into product options
- A call monitoring plan to check for the script and stages
- A clear operational process map
- KPIs that directly connect operational processes and call stages to the outcomes
An effective sales process means customers are more likely to buy a policy, keep a policy, and spend more on alternative options.
Questionable compliance?
If you’ve not got a detailed sales process in place, can you be sure you’re 100% FCA compliant?
- Only with genuine control over the sales journey can you be sure your business is truly compliant
- A detailed, structured script and sales process outline ensures you have full compliance with FCA regulations, and that your customers have genuinely made an informed decision
_____________________________________________________________________
Get in touch >> or schedule a call with me here.
_____________________________________________________________________