EDITOR’S NOTE: This is the extended version of the Dan Sullivan interview featured in the March issue of InsuranceNewsNet Magazine.
If you have been trying, and failing, to break out of a sales slump, Dan Sullivan has news for you: stop thinking you’re an insurance agent.
As founder of The Strategic Coach, Sullivan has been making that his mission, helping producers see themselves as entrepreneurs rather than salespeople. Some people are naturally entrepreneurial and they need to set themselves up to launch to greatness. Others are hard workers and need a system for leverage. But Sullivan’s point is everybody can achieve phenomenal success -- not just doubling or tripling your numbers, but boosting sales 10 times. That doesn’t mean tinkering with what you are doing. It takes a whole new perspective.
Sullivan has been coaching life insurance producers for more than 35 years, taking good and even great salespeople and helping them propel themselves to success they hadn’t even dreamed of. He is author of more than 30 publications, including The Great Crossover, The 21st Century Agent, Creative Destruction, and How The Best Get Better. He is co-author of The Laws of Lifetime Growth and The Advisor Century.
In a conversation with InsuranceNewsNet Publisher Paul Feldman, Sullivan didn’t pull any punches. They had some frank discussion on what insurance companies and producers are doing wrong. More importantly, Sullivan shows how producers can’t do great things unless they break free of what they are doing – and what they’re thinking.
FELDMAN: How did you get involved with the financial services world?
SULLIVAN: The reason I came to Toronto in June of 1971 was as a copywriter with Baker/Lovick Advertising. They were a big deal up here, so it was like the No.2 agency in Canada. I came right out of university, I’d just graduated one day, moved to Toronto the next day, and started writing ads the third day.
So I wrote on everything – banks, cars, Kraft Foods, a lot of different things. But what happened that really sent me off on my coaching career was they took all their small clients who were essentially fee-for-service clients rather than media placement fees, and they put them into one group, which they called the small client group, and they made me in charge of it. That allowed me to do client consulting and also the creative work on it, which I did for about a year and a half. And what interested me most about it was just asking these clients, who were mostly entrepreneurs, small businesses, about why they were doing what they were doing. The more I got into questioning them about how they were thinking about their business and where they were going, which was very important for doing their advertising, I just got more interested in the whole entrepreneurial mind.
So in August of ’74, I jumped out and created my own consulting company, which in the 80s became a coaching company. I did this with the good will of the agency, and some of the customers were the people I was working with. I created sort of this rudimentary process for asking them questions about their future and where they were going. Then I started getting referrals. One of the first was one of the founding members of Top of the Table. Over the next seven or eight years I got to know probably a dozen members and they became my clients. I helped them think about their future and what they were trying to achieve.
Most of them were, as typical, very good sales people, but not necessarily good managers of their businesses. I would just ask them a lot of questions and gradually help them, actually put teams around them and treat them more as companies rather than as an insurance practice. So I just saw this as a huge growth market in life insurance.
We’ve created a process that allows very top achievers, top performers, to simplify their lives, so that even though their results are multiplying, their lives are getting simpler as their success gets greater.
FELDMAN: I think we both agree with the fact that life insurance producers are an amazing breed of entrepreneurs. Why do you think that is so?
SULLIVAN: Oh yes, I do! The remarkable thing about insurance agents is that they’re selling an intangible. And they’re selling an intangible that nobody wants to talk about. The fact that they can make extraordinary sales, it’s almost like you take a sales ability in another industry and you have to square it for the insurance agents just because of the very nature of the sale that they’re making.
By the very nature of the question-asking process that life insurance agents conduct with their clients, it deals with an incredible number of areas that often people really don’t want to talk about, or they don’t even want to think about. Among all the entrepreneurs I have – and we have entrepreneurs from 60 different industries – I stand in awe of the top life insurance agents because of their ability to ask questions and to relate and to make a sale in areas that are very difficult.
FELDMAN: Have you ever worked with a producer at the same caliber of someone like Ben Feldman?
SULLIVAN: Oh yeah, lots and lots. I would say that I easily, over the course of 30 years, have had 40 or 50 agents that were either equal to Ben Feldman or actually did better than he did.
FELDMAN: Do you think the average advisor believes in life insurance like Ben Feldman did?
SULLIVAN: I remember being at a CLU meeting with a couple hundred, well-established agents in the Toronto area. And by well-established, I mean that all of them would have been members of the Million Dollar Round Table.
I said to them, “I’m open to a challenge on what I’m going to say here, but I believe that I probably have more personal coverage on myself than any one of you in the audience has on yourself. The reason is you sell life insurance, but I believe in life insurance. And when you believe in life insurance as much as I do, you’ll sell a lot more.”
Nobody challenged me on it because it’s one of the strange things about a lot of life insurance agents who want to sell a lot of life insurance -- they don’t have a lot of life insurance. And I always found it an extraordinary, self-limiting condition.
You should be buying the stuff as much as you possibly can. Whole life especially is one of the greatest financial inventions in the history of the world, and the past 10 years has really borne that out in terms of the returns on the investments that you’re getting.
FELDMAN: There’s an art to selling life insurance, to selling a product that insures something that isn’t going to happen to them. Studies show that people fear losing their house in a fire more than they fear losing a loved one. How can producers overcome that?
SULLIVAN: I would say the American public is chronically and dramatically underinsured. Given the fact that you have this ability to create wealth with insurance – it’s the easiest way to create wealth in the world. You can create your own bank with it. Literally what we’ve done, my wife and I, we created our own private bank over the past 10 years. It’s the greatest thing in the world because you put money into a whole life account and you can borrow against it, and even though you take capital out, it’s still there growing inside the investment component, and the growth is not taxable. It’s like one of the most amazing inventions in the history of the world. I have to tell you, I’ve never seen anything like it.
So, I’m a believer in insurance and I’m a real believer in the top people who can actually sell it. They’re some of the most creative thinkers I’ve ever come across – what they can do with this instrument is why I’ve specialized in coaching at the very high levels of life insurance agents. I really respect and admire these individuals.
FELDMAN: You have seen the insurance business change so much over the past few decades. Would you tell us your perspective on it?
SULLIVAN: I’ve been able to look at essentially four decades of the progression of the life insurance industry. In the 1970s, most agents had a company identification. That started to erode at the beginning of the 1980s because of the introduction of two things. One is technology – the ability to compare products went up very significantly in the early 1980s. And the other was universal life, because all of a sudden you were crossing the border into the investment industry. In the 1980s, you started getting product identification, and you had a tremendous amount of creativity in product.
In the ’90s, when you started getting a lot of independent people, it was client identification. What we’ve been pushing for the past 15 years is that insurance agents, in order to multiply, need a process identification. The products that they’re selling are simply ways of implementing a certain kind of process that answers the deepest needs of the clients. When I look at the top agents now, it’s the people who are doing really great processes. They’ve taken their best way of understanding and transforming the needs of their clients into unique game plans, but they follow a particular process. And all the great ones that I’m seeing, they’re making way above the Top of the Table types of incomes. They’re into the threes and fours and five millions of personal income.
FELDMAN: What are some characteristics of highly successful insurance practices?
SULLIVAN: When you’re just starting out, it seems like there’s a lot of complexity to make the thing work. Successful practices create a process. They base their entire company on a process. And what I mean by this – I could relate it to what you do – like when you just started in the publishing business, it seemed like there’s a lot of complexity to really make the thing work.
And part of the reason is you’re ignorant to the 20 percent that really, really makes the difference, which would be true for anyone starting off.
In any successful operation, in any entrepreneurial field, people are filled up with all sorts of activities, but if you really look at what really makes the difference, it’s Pareto’s law. It’s 20 percent of your efforts producing 80 percent of the results.
And all these big agents selling big policies – the vast majority of them work with entrepreneurial customers because those customers have multiple needs. They have personal needs and then they have corporate needs, benefit needs, key man insurance needs and then they have partnership. You take the average entrepreneurial client as opposed to just somebody who, let’s say, is a highly paid person but is a salaried employee in a large corporation. There will be probably about 10 times more opportunity to expand the things that you can do for an entrepreneurial business owner than you can for an executive in a corporation.
FELDMAN: Would you say the business market is bigger and more profitable than the senior market?
SULLIVAN: Oh yes, incredibly so – because with business clients, in most cases, their future is bigger than their past. Our own insurance agents were in here yesterday to talk to my wife Babs and me about our company, and we’ve had them for 25 years. I’ve seen these agents every 90 days for 25 years. They were a London life agency when we started with them in 1987 and together these four agents were doing maybe $500,000 in commission. So it was good money then, but this year the four agents will do $10 million in commission.
At one point I said to these agents, “Look, you’ve got corporate executives and you’ve got all these other people, why don’t you just focus on the business market?” So now they’re strictly working with privately owned businesses with a net worth of more than $100 million. They have key men, they have key employees – they just have a multitude of needs. And the biggest need, of course, is the end game for the business owner. And that requires tremendous amounts of insurance with tax laws being what they are. The use of life insurance to minimize the erosion and the loss of the estate is crucial.
So, I don’t see any comparison between the senior market and the business market. The business market just goes forever and you get a one-time hit or a two-time hit with the senior market.
The complexity of the business market demands that there be an infinite number of solutions. But here’s an interesting point: it takes a different kind of intelligence on the part of the agent.
When you go to the business market, you just notice a quantum leap in terms of conceptual intelligence and emotional IQ. They really grasp what’s going on with the person across the table and they make their clients feel profoundly understood, which I think is the key to any kind of sale.
FELDMAN: In the real estate market they use sales teams. Do you see top insurance producers having their own sales team? Do they have a case manager, underwriter and follow-up person?
SULLIVAN: Yes, all of that plus lawyers and accountants – who are really cheap these days. The accounting and legal industry have been devastated by technology, so there are a lot of very skilled people available. And the other thing is, with the collapse of the career agency systems, a lot of talent got freed up at head offices. The top agents were able to hire people with a lot of head office experience.
They run little expertise corporations, and for every need that a business client is going to have, they’re going to have expertise or they do terrific strategic alliances with law firms and accounting firms. I would say virtually all the business market people that I know have law firms and accounting firms as their main marketing system, because the accountants and lawyers don’t have a clue about insurance.
I’ve never met a lawyer yet who has even a clue about life insurance. You could take a first year agent in the life insurance industry and put him up against most lawyers, and the first-year agent would have vastly more understanding of what you can do with insurance than a lawyer or an accountant. Lawyers and accountants only see billable hours. When a pickpocket looks at a saint, all he sees is pockets.
I know very few life insurance agents who would be considered the key advisor to most business owners. It’s generally the accountant or the lawyer. The guy who can keep you from getting sued or going bankrupt is usually your biggest hero.
FELDMAN: You have talked about how people can multiply their business 10 times. How is that possible and why is it 10?
SULLIVAN: Ten is the number I get them to focus on because you really have to change things and rework your model from the beginning if you go 10 times. If you go two times you can keep a lot of the stuff you’re doing. I was just talking to an investment advisor about an hour before this interview. He came to Strategic Coach about nine years ago when his personal income was $120,000 and this year its $1.2 million. So he’d multiplied it 10 times.
I asked the financial advisor, “How about $12 million?” And he said, “I’m going to have to reconfigure myself, but I definitely can see how I can go to $12 million.” And in the next 10 years, he’ll be going for $12 million.
I’ve got hundreds and hundreds of people in that situation. And as you said right at the beginning of the interview, most advisors don’t comprehend the almost unlimited opportunity that’s available – that there are three things – unlimited capabilities, unlimited opportunities and unlimited resources.
FELDMAN: Why is it important for producers to rebuild their model?
SULLIVAN: In the beginning, they have to change a lot of things because the way the industry taught them from day one is wrong. Everything that the life insurance industry teaches its agents is wrong for growing a business.
If someone’s really an entrepreneur, you don’t want to be constrained by the way you were taught. You want to get away from that. You want to escape from the industry. You want to get outside the gravitational system of the industry.
FELDMAN: What are some qualities of the best agents?
SULLIVAN: I’ll give you one word to describe them: killers. And what I mean by that is, whether it’s a sale or an outcome for the year in terms of their revenues and profits – once they lock on, they kill off all alternatives except that result.
There’s no personality profile. You’ve got introverts; you’ve got extroverts; you’ve got people who are extraordinarily intuitive; you have people who are very good with details and numbers. So they really vary.
I would say the big thing is that they’re killers and they play within their own game. They don’t imitate other people. They’ve discovered what works for them and they’ve continually built a bigger and bigger system around what they uniquely do.
FELDMAN: Is that killer instinct something that has to be inherent? Or is it possible to develop it?
SULLIVAN: You can develop people who are very good at adapting other people’s best practices, but it’ll be imitative. No, the best ones are as creative as great artists, as great inventors. They’re just unique individuals. And, by the way, this is true of all entrepreneurs, not just insurance agents. Their uniqueness is factory-installed. They didn't pick it up along the way. You can get guys who do everything right. They read every best practice book in the world; they follow every good example of other agents; and they’ll get about halfway to what these guys can do naturally on any given day.
FELDMAN: When you’re dealing with clients, what tells you they’ve got that special something that makes them one of the top?
SULLIVAN: They’ll change almost anything immediately if it looks like it can free them up for more opportunity. They’re willing to go through almost any kind of personal or organizational change very quickly to jump to the next level. And you usually only have to tell them once. They have a nose for growth.
FELDMAN: So, in a sense are they ruthless about it?
SULLIVAN: Ruthless in the best sense of the word. Interestingly enough, they’re not driven by money. They’re driven by desire for greater freedom and they’re driven by the experience of growing in what they do. They’re always fascinated with what the next opportunity will be -- just very unusual kind of people. And I’m just describing entrepreneurism at its highest levels.
This would be true if you went to the high-tech world or the real estate development world. It’s just a unique characteristic. They’re just driven by growth and they’ll take risks; they’ll make sacrifices; they’ll go through extreme discomfort and extreme anxiety to jump to the next level of growth. It’s a very unusual characteristic. Most people don’t have the nervous system that can actually put up with that.
FELDMAN: Can a generalist be in the top tier of sales?
SULLIVAN: I would tell you that my experience with the top people is they all specialize in one thing, and then they team up with other people who have the other specialties. The firm that we deal with only sells whole life, they don’t sell a single other thing. You can’t buy universal life and term -- they’ve just become the masters of whole life. I’m a total believer that one person should specialize in one thing. And that’s why you want to have the teamwork, that’s why you want to create a company, because you can have another person who does annuities and another person who does something else.
My experience is it’s not in the best interest of the advisors to become people who can do anything because they don’t really do anything sufficiently well that they can really differentiate themselves.
It might be in the interest of the financial services company for them to do that, but I don’t see that it’s really in their interest. It would be much better if they found the best annuity salesperson in the market and they just brought him in on the case.
They can work out what the deal looks like, but specialists who cooperate with each other will always out-compete generalists who are operating individually.
FELDMAN: If you’re the entrepreneurial type that you described, how do you manage people who aren’t like you?
SULLIVAN: There are two distinctions that I’ve found that really work with the top agents. And that is – we make a distinction between front stage and back stage. Front stages you’re out selling in the public and back stages you’re working inside your organization. What I tell them is that the biggest mistake that you can make is that when you’ve been out selling and you walk in the door, you think you’re supposed to put on another hat. You’re selling front stage and you’re also selling backstage.
So what I try to do is to get them out of the whole notion that they’re supposed to be managers. What they’re supposed to be doing is selling a vision to their team and then have good managers under them. The first person that I want any top agent to hire is someone who will free him or her up from all the details, the backstage details, so that they can be out selling. But the second person I want them to hire in an important position is someone who manages the team and the day-to-day work.
What I’m describing is a distinction between artists and craftspeople. The top ones are artists. They’re rock stars in a certain sense. But at the craftsman level, they can become extraordinarily good craftspeople.
They’re going to have to start thinking of themselves as an entrepreneur and not as a life insurance agent. That’s the No.1 thing -- if you start thinking of yourself as an entrepreneur, you’re running a business. You are a life insurance agent for the purpose of your training, but then you have to become an entrepreneur for the purpose of your success.
FELDMAN: What about people who do not fall into that top echelon – what can they do to improve themselves and achieve a high level of success?
SULLIVAN: What I’m describing is a distinction between artists and craftspeople. The top ones are artists. They’re rock stars in a certain sense. But at the craftsman level, they can become extraordinarily good craftspeople.
In the scheme of things, we have 2,700 clients so I’m not going to have 2,700 artists. We have a lot of people who fall in the craftsman level. But the big thing is you just give them some general rules, and one of the things is that their industry will only get them to $100,000. Their industry will not get them any higher than $100,000, so if they want to go above $100,000, they’re going to have to start thinking of themselves as an entrepreneur and not as a life insurance agent. That’s the No.1 thing -- if you start thinking of yourself as an entrepreneur, you’re running a business.
And I’ve seen people who are real plodders, nothing comes natural to them, but they’re persistent, honest, thorough and they do what they say – and they get to $100,000. And I said, you have to stop thinking that you’re a life insurance agent. You have to think that you’re an entrepreneur. Over a period of years I can see them getting to $300,000, $400,000, $500,000.
You are a life insurance agent for the purpose of your training, but then you have to become an entrepreneur for the purpose of your success.
FELDMAN: Do they also have the capability to grow themselves 10 times?
SULLIVAN: Yes. A craftsman can go 10 times, but it’s going to be very systematic, very methodical with a tremendous amount of trial and error. An artist can go 10 times really quite quickly. They can come up with an idea between breakfast and dinner that can suddenly give them a multiplier that they never thought of, and that’s just the difference. Lennon and McCartney could write a new album between breakfast and dinner. Not many people could do that.
FELDMAN: Are good producers preventing themselves from becoming great?
SULLIVAN: There’s just unlimited opportunity in the marketplace. The needs in the marketplace for what they provide in terms of counsel and what they provide in terms of great products is just unlimited. Everybody talks about insurance being a mature industry. What they meant by that is that most of the people running the insurance companies are brain dead.
FELDMAN: We know there is the need out there for our products. But the number of producers keeps dropping. How can we get new people into the business? What are agencies doing wrong in bringing new people aboard?
SULLIVAN: The big thing is you’ve got to bring the new person in for the sole purpose of freeing up the time of the top person. See, everybody’s trying to create a clone. So what they do is they bring another person in, and they expect that person to be kind of like them. But that’s not why you bring them in. You bring them in to give them a whole series of activities that are profitable from day one, and over time, they can learn the product knowledge, and actually show whether they have what it takes to be a life insurance agent. The way the industry did it is they just threw everybody into the deep end of the pool, and the ones who developed a stroke and learned how to breathe survived, and the other ones died.
There was an interesting survey that was done by MDRT, I think it was around ’90 to ’95. But they discovered the reason for the bad image of life insurance agents and the life insurance industry in the general public, which is one of the biggest obstacles to people buying more insurance. They discovered that virtually all the negativity affecting the profession and the industry was coming from failed agents. It wasn’t coming from disappointed clients. So you had an industry that out of every 10 of their recruits they were creating nine new ambassadors of bad will.
FELDMAN: How should companies be better at training?
SULLIVAN: The Chuck Brewster model that I gave you is the solution. Sell the people who are already sold, but give them a higher quality of service. Give them a four times a year review of their cash flow situation and then all sorts of other opportunities start to emerge for other needs where the new agent suddenly discovers, oh, you can use this tool for that, and you can use this for that. But they don’t care, because they treat customers like numbers and they treat agents like numbers. And when you treat people like numbers, you create a lot of unhappiness and dissatisfaction.
Readers may contact Paul Feldman at firstname.lastname@example.org.
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