By Raymond J. Ohlson
InsuranceNewsNet
Dec. 17, 2010 -- In the 1970s, insurance legend Joe Gandolfo authored one of the most insightful books ever written about sales: Selling is 98% Understanding Human Nature and 2% Product Knowledge. Joe, who holds a doctorate, was one of the greatest life insurance agents of his time. Not unlike the late, great Ben Feldman, people would flock from all over the country to hear Joe speak. He was much more flamboyant than Mr. Feldman and had nearly a rock star persona. Though he was a master of all of the product details, Joe chose the title of his “Selling” book to get agents’ attention – to emphasize the human side of selling. He adhered to the premise that if the client wants a ham sandwich … sell him a ham sandwich, not a steak!
Our industry needs to think about this basic premise. We develop products, give them a little tweak, maybe adjust the commission or an interest rate, and then we all believe we’ll be soon hitting home runs. Unfortunately, that is not the case even though we have never been in a better position to seize the day in these turbulent economic times. Our products should be in hot demand, but in most cases, they are not. Why?
In general, our industry has a problem engaging in consultative selling. Furthermore, most advisors lack excellent and consistent training. With a few exceptions, point-of-sale pieces and company illustrations do a woeful job of "selling the sizzle."
With the exception of a few companies, when our industry abandoned the career system, it separated the manufacturing from the distribution of products. That separation also included the training of agents and advisors. This burden fell to the marketing organizations. Frankly, some IMOs do a great job of providing this very important element of our business, but some others just believe in the "large army” approach. Every year our industry loses a large number of our agents. So, we must address immediate training needs, and, as I will address in future articles, we must work in a partnership philosophy. For the moment, let’s first consider what the American consumer is doing and thinking.
A recent front-page article in USA Today begins with the headline, "Recession Affecting Every Aspect of American Life."
The article said: People are cautious because they don't know when the economy will improve, says Robert Lang, an urban sociologist at the University of Nevada-Las Vegas. "They're risk-averse," he says. "It's a short-term crisis but it's changing long-term expectations. Just like the Great Depression haunted the postwar years, this recession is so deep, its impact may alter the first several decades of this century."
That's powerful stuff! Do our prospects and clients feel that way? I believe they do. But, how do we know if we don't engage them in open dialogue and then truly address their needs and concerns? Doesn't all of this sound like a lot of Americans are looking for safe money alternatives? Then why do so many in our industry feel as though we have to compete with the "equity products?" Believe me, there is a need for equity investments, but our prospects don't feel that way today. Need a little more evidence?
In one of his Wall Street Journal articles, Jason Zweig states that “retail investors poured over $375 billion into bond mutual funds last year and another $230 billion thus far in 2010 — even as interest rates have shriveled toward zero and the risk of future losses has risen. Households also have yanked roughly $70 billion out of U.S. equity funds this year, though the stock market has gained 4%.”
I will allow you to determine what this means to our business and the opportunities that lie before us in introducing Americans to new safe money havens. As an aside, I heard the $100 billion of the bond fund purchases were from baby boomers. So, do we truly understand the need of the former Woodstock generation now turned conservative of which I am a part? Remember, this generation of "newly minted retirees" are, and will continue to be, much different than the Greatest Generation and the Silent Generation. And, if you address their needs in the same way, your success levels will be greatly diminished.
What does this mean? What are companies, IMOs, and agents doing to address this unique opportunity/challenge? Unfortunately, most are making knee-jerk decisions and not addressing the mid-term and long term implications that this economic turbulence has brought to our industry. Some companies are truly addressing these issues.
Our entire industry knows that current and future retirees view income planning as one of their primary needs. We know that they yearn for a "definitive yield and a defined income amount." They also long for certainty. So, why aren’t we all knocking the ball out of the park? Why are some agents seeing their sales go to new heights while others seem lost in trying to understand why their incomes are in decline? These are questions that our industry must address. Yes, the industry, for the most part, has separated manufacturing from distribution. And it will stay that way for many years to come. But, the companies need to work more closely with their marketing organizations in developing programs to assist today's advisors build a more prosperous practice while helping their clients with their needs. In other words, it’s time for the insurance industry to craft clear messages for all, develop training and marketing programs for the agents, and set a direction that will allow all of us to seize the moment. This is truly "our day in the sun," and we need to spell out our message to America – loud and clear – that we have the products and tools to help Americans plan for or stay in the retirement world that they had planned. It’s not something that anyone can do by themselves. It’s time for the insurance companies, the IMOs, and the agents to pull together and seize a victory!
Raymond J. Ohlson, CLU, President and CEO of The Ohlson Group, a national insurance marketing organization based in Carmel, Indiana.
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