Cross Marketing

AuthorHouse

Chapter One

It was April of 1978, and I had just concluded a short consulting stint at a radio station in Springfield, Massachusetts. After two previous false starts in Florida, I was determined to make this one stick. Unfortunately, there were no radio programming positions open, and my funds were rapidly dwindling. So, like so many others, I entered the insurance industry by accident. I needed a job, and the career companies were hiring. I became a life insurance man. At that time, the quintessential life insurance agent represented only one company and sold but a few simple products, either whole life or renewable and convertible term. We also had a small arsenal of disability, annuity, and individual and group medical products. But we mostly focused on life insurance sales.

My first company was the Equitable Life Assurance Society of America, the Equitable. There were two distinct sales divisions: DSF and ESF. The DSF (developing sales force) agents were the neophytes, and the ESF agents were experienced. I never made it to the ESF division. Neither did over 90 percent of the other DSFs. In spite of that fact, I was one of the more successful DSF agents. My success was attributable to being able to sell insurance to my family, my friends, and a reasonable number of solicited prospects.

Like so many other previously staid institutions, the insurance industry was beginning to change in the '70s. As Robert Littell and Larry McSpadden so aptly describe in their book, Crossing the Line, "A career as a 'life agent' was viewed by many as a 'calling'—carrying out the obviously altruistic work of protecting future widows and orphans from poverty and despair. Top life agents were highly visible people within their communities, participating in fraternal, civic, and charitable organizations. With little negative media focus, the life agent was admired; media questions regarding the life product's competitive value or intrinsic worth were never heard. No one criticized the life agent's or company's marketing practices."

To survive in those early years, I regularly returned to my hometown in Pennsylvania to call on those folks I knew and grew up with. That was a lot easier than the cold calls required to survive in southern Florida. It was also substantially more productive. Unfortunately, there are only so many people you can call upon in a small rural town of only ten thousand. Nevertheless, it kept the wheels moving while I attempted to define the prospecting techniques that worked for me at home.

Most career shops required their new agents to conduct Monday-night calls. Those calls were directly from the phone book, reciting a predetermined script written by the training department of the respective company. "Cold" may not be the appropriate term; perhaps "frozen" is better. The sessions normally lasted for up to three hours or until we were totally exhausted or were fortunate enough to schedule ten appointments for the week. Bottom line, it wasn't for me.

What worked for me was cold calling small businesses for group insurance. If the business had a plan, they were usually interested in saving premiums at their renewals. If I could get to the owners, I could usually interest them in providing a competitive quote. In the late '70s and early '80s, small group plans in Florida were often guaranteed issue with no loss/no gain. That made it easy to replace their present plans with more competitive plans. Although it was a much better prospecting method compared to the Monday-night calling sessions, it was still quite difficult. Once I wrote the group plan, I asked to review their business and personal insurance portfolios.

After my subsidy was about to expire at the Equitable, it was off to State Mutual for a new round of financing. Although I appeared to be successful, the career companies were really providing an overly aggressive financing program, in hopes of supporting the new agents until such time as they became self-supportive. It was quite common for agents to move from company to company just to get refinanced. I was no exception.

At State Mutual, I was educated in the business and estate-planning markets and became quite proficient at creating my own usable models for presentation. Of course, compliance had a completely different meaning in 1980 than it does today. My presentation and creative organizational skills soon became known among the less-experienced agents, and my career in insurance was solidified. The new agents were capable of scheduling the required weekly appointments but fell a bit short of sales and presentation acumen. I was able to validate my contract by making joint sales calls and splitting cases.

I soon realized the power of knowledge and persuasion. I'd let the other agents do the heavy lifting, while I prepared the presentations and made the sale. I'm sure these new agents considered me the heavy lifter, since they did not have the confidence to close. I found the business plan that worked for me!

Having transitioned from a very creative management position in the radio and advertising industry to insurance sales may seem somewhat unconventional. In fact, it was just the opposite. Creative concepting is one of the keystones to success in both advertising and insurance. The fundamentals are essentially the same. If you can successfully bring a product to market or grow a radio audience by developing a more listened-to format, you can develop creative marketing systems in the insurance industry. The only difference is that you must first develop the technical expertise and product knowledge to guide you through the creative marketing process.

My success with joint sales certainly simplified my prospecting dilemma but didn't satisfy my desire to reenter management, this time in insurance.

It made good sense to seek a sales management position, considering the reality of receiving an override for the production of those agents under my management. If I could make joint sales, then I could certainly develop and train others to do the same. The more successful agents I trained, the more successful I would be—or so I thought. So off I went to interview for a sales management position and found one rather quickly. The offer was from Home Life, a New York company claiming to have the highest percentage of CLUs in the industry. But, somehow, I got sidetracked and accepted an interview with the Travelers.

The Travelers interview was somewhat foreign, in that I didn't really get their plan. The position was that of a production supervisor. The role of a production supervisor was a jack-of-all-trades sales job that focused around the agencies appointed by the Travelers to market property/casualty insurance. I would be working for a department of a larger property/ casualty insurance company. How was I supposed to sell life insurance and related products to clients of these agencies?

I accepted the position at Home Life. When I called the Travelers manager to inform him of my decision, he put a full-court press on me to reconsider. Not only would I get a company car, but I would also have a healthy expense account, neither of which was offered by Home Life. Although I still didn't fully understand how Travelers could build a profitable business model, I decided to give it a chance.

Chapter Two

To be specific, it was the Travelers Life, Health, and Financial Services Department, LHFS for short. The Travelers LHFS was managed by region. The Fort Lauderdale office was part of the southern region, domiciled in Atlanta. The personnel structure was quite impressive. Working out of the regional office with the regional vice president were two estate planning specialists, one tax sheltered annuity specialist, and one payroll deduction specialist. Add to that their administrative staff. In the local office, we had a marketing manager, four production supervisors/managers, and five administrative coordinators.

Each production supervisor/manager was responsible for a unit of agents/ agencies. We were free to contract any licensed agent, but the bulk of our production came directly from those agencies contracted through the property/casualty department. Although my goal was to evolve into a management position, I soon realized that the Travelers position was very similar to the joint sales situation I had left behind at State Mutual. At the Travelers, I was trained to market a portfolio of stock company products: non-par whole life, blended non-par whole life, term insurance, and annuity riders to compete with participating dividend scales. Both Equitable and State Mutual were mutual companies, offering dividend paying participating whole life contracts.

Most property/casualty agencies in the early '80s were relatively small family-owned businesses. Many of these agencies were heavily weighted in personal lines with a small volume of BOP policies on the commercial side. Total premium generated was, on average, somewhere in the one- to three-million-dollar range. Of course, there were larger agencies where the commercial volume dominated their personal lines volume. Most of these agencies also produced their P/C business with either the Travelers, the Aetna, or the Hartford. They were the big three!

Each of the big three had some kind of financial services department, and all wanted as much as they could get from their contracted agencies. Fortunately, the Travelers had more staff dedicated to financial services production than the other two combined. Product-wise, we were all offering similar products of mediocre quality. That's where the similarity ended.

The Travelers realized early on that some form of value added was necessary to realize success with these multiline agencies. Here's how we did it.

Production supervisors were required to call on all Travelers multiline agencies on a regular basis. Most of the agencies did not have a life department and relied solely on the principal and the other producers to write the business. Or, let me say, sign the application as agent. Well, that's not entirely correct. Quite often, the production supervisors were the sales agents soliciting the applications, and we signed for the listed agents. We did not forge their names on the applications but merely signed for them: for example, John Jones (production supervisor) for James Smith (agent). That procedure would not be permissible in today's more compliant industry. Quite often, the agent never saw the client, just referred them to the production supervisor via a telephone call. The production supervisor booked the appointment, ascertained the need, made the sale, and, many times, delivered the policy. The agent simply made the referral.

Not all production supervisors were successful. The successful supervisors realized early on that the ability to form a relationship with the agency was equally as important, if not more so, than their product knowledge or sales skills. We really got to know our agents, their agencies, and their employees. We worked so closely that we were often considered part of the agency and invited to employee-only functions. We became part of the agency family.

Molding a solid business relationship with an agency principal is not as simple as it may seem. One of the most difficult tasks in developing a successful production relationship is trust. Merriam-Webster Online defines "trust" as "assured reliance on the character, ability, strength, or truth of someone or something." The successful production supervisor formed a bond of trust with several multiline agencies.

Prior to being introduced to our agency force, we were thoroughly trained in several areas: product offerings of the company, understanding the competition, style awareness, property/casualty jargon, and a proven sales track. We tagged along with the more experienced production managers until we felt comfortable in a multiline environment.

While all this training was in progress, we were also introduced to our counterparts on the Travelers property/casualty side of the business. That part of the training was more informal but extremely valuable. We learned about each agency, its mix of business, and the issues faced from a P/C perspective.

Remember the structure of the company as previously discussed? The local office was supported on a regional level by several specialists. These specialists were constantly on the road supporting the sales efforts of the local offices in the region. Not only did we have a strong local face presence with our agencies, but a highly qualified regional backup team to physically support our advanced sales efforts. Imagine a small personal lines P/C agency being able to provide sophisticated estate analysis services to their clientele. We're not just talking concept here but a fully customized estate plan, presented by a highly qualified professional.

The Sales Track

The Travelers sales track consisted of three parts: the Ben Duffy, the human asset risk analysis, and the appropriate subsequent presentation. All production supervisors were taught to commit to memory the entire sales track and to present all aspects of the track to their agencies on a regular basis.

Advertising icon Ben Duffy joined the advertising firm of BBDO circa 1931 as a clerk in the mailroom. Ben worked his way up the ranks of the Madison Avenue firm, achieving its presidency in 1946. Duffy was an excellent salesman who could close a deal quickly. When Foote, Cone, and Belding resigned the eleven-million-dollar American Tobacco Company account in 1948, Duffy went directly to see American Tobacco's George Hill and secured the account after one meeting. In Duffy's ten years at the helm of BBDO, the agency increased its billings from fifty million dollars to over two hundred million dollars. Story has it that on the way to the appointment, Mr. Duffy wrote down as many questions as he could think of that might be on the prospect's mind. He narrowed the questions to ten. Thus, the birth of the Ben Duffy method: selling from a customer's perspective.

The Ben Duffy Method

The concept is simple: put yourself in the shoes of the prospect and think of the questions he or she will ask prior to making a decision. Whenever production supervisors met a client of an agency for the first time, they presented their version of the Ben Duffy. It went something like this: "On my way to the appointment today, I thought of some questions you might ask of me." Those questions are the following:

1. Who am I?

2. Why am I here?

3. How do I do business?

Your Ben Duffy introduction had previously been reviewed with the principal of the agency you were representing. The principal knew exactly what you were going to say to his or her client. The Ben Duffy, and the human asset risk analysis and appropriate subsequent presentation were the first two steps in a seven-step process called the sales development system (SDS).

The seven-step SDS comprised an entire selling process. It included two separate problem-solving presentations. The first was the money-planning presentation, designed for the estate-planning prospect. It was, however, an all-purpose presentation.

The other one was the business-planning presentation, specifically geared to the wants and needs of the small business owner prospect.

The Risk Analysis

After providing a brief biographical background, the production supervisor proceeded to explain his or her role within the agency, which led directly into the "How do I do business?" question. Let's assume the production supervisor is meeting with a commercial client of the agency. The risk analysis is perhaps the most important part of the sales track and the SDS. It is most important because it is the part of the SDS that ties the services provided by the P/C agent directly to the services of the financial services representative. Here's the risk analysis presentation:

Now, in response to that "How do I do business?" question, Ms. Client, let me say that a significant part of my job is to provide clients of the ABC agency with an important service called "human asset risk analysis." Let me explain specifically what that is. All business owners are exposed to risks of almost every description, but those risks really break down into two categories: property risks and human asset risks.

In your dealings with Mr. Jones (the agency P/C salesperson), I know he has carefully explained the property risks you face every day fire, water damage, work interruption, and all the other things that can endanger your company and its operation. In each case, you had a decision to make:

• To cover all of the risk

• To cover part of the risk • To cover none of the risk

In determining this, you and Mr. Jones worked as a team, and once the risk was analyzed and all the facts were weighed, he helped you select the best course of action for you to take in light of your individual situation.

(Continues...)

Excerpted from Cross Marketingby Marlin R. Bollinger Copyright © 2011 by Marlin R. Bollinger. Excerpted by permission of AuthorHouse. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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