By Linda Koco
NEW YORK CITY –What consumers do when shopping for life insurance and what the life insurance industry does to engage those consumers are not always aligned, according to Eric Sondergeld. That can derail sales.
In addition, the language and tactics that insurance professionals use to engage clients don’t always achieve the desired results, according to Delores R. Freitag. That, too, can derail sales.
The points come from new LIMRA research on consumer behavior in insurance transactions.
The findings reveal a consumer mindset that is changing rapidly due to the Internet and other technologies — and to an industry that needs to change how it interacts with consumers in order to stay relevant and grow sales.
Both executives plan to talk about this during early-bird workshops here at LIMRA’s annual meeting. Each workshop starts at 4 p.m. today. Sondergeld is corporate vice president-distribution and technology research at LIMRA and Freitag is assistant vice president and director of talent development at LIMRA.
Each executive provided InsuranceNewsNet with a top-line view of their presentations during an interview in advance of their sessions. They plan not only to spotlight key findings but also to suggest how life insurance companies and professionals can position themselves more effectively in the changing consumer climate.
What leads consumers to buy?
Sondergeld said that new LIMRA studies help identify how people shop for life insurance and what ultimately leads them to buy. The research was both quantitative (via survey) and qualitative (via focus groups). The results of both studies point to the same conclusions, he said during the interview.
The LIMRA researchers found that many of today’s consumers want to interact with companies differently than did consumers of the past.
The Internet, social media and mobile technology have been big factors in this change, Sondergeld said. Many consumers are so comfortable with those technologies that a growing segment say they want to complete their transactions entirely online, he said.
But right now, in the life insurance business, “there are not many options for that.”
He acknowledged that some insurance professionals believe that online transactions might work for sales of simple term life policies but not for sale of more sophisticated cases and more complicated policies.
That’s fine for industry people who are dealing with more complex situations, he agreed. However, “most people don’t have complicated situations,” he said. That’s where the online comes in.
The research has found that some consumers have reached the point in which they are looking for carriers or distributors who are willing to work with them on the terms they (the consumers) want, he said. And what they want is to “do it all” online.
Some potential buyers are thinking, “If I can’t do it online, see you later,” he said.
“In fact, we are seeing people do that. They get ‘stuck online’ and don’t know how to finish the process” so they just leave and don’t buy.”
In his presentation, Sondergeld said he will put the buyer/seller disconnect in the context of growing tendency of companies both inside and outside the life insurance industry to use “omni-channel” distribution. Also called multi-channel, this approach focuses on providing consumers with many points of access for information, purchase and service, he said.
This is done in an integrated way, so as to make the customer’s experience seamless at whenever point they come into the buying process, he said. The approach is rooted in analysis of what customers say about how they would like to go about buying life insurance.
What consumers want
That’s the direction in which the LIMRA research is pointing, too.
Freitag said LIMRA data shows that consumers today are doing more shopping than buying. Some of that ties into the changing values that consumers have in what they look for in an advisor, she said during the interview.
For example, they no longer need to go to an advisor to get information. They can go to the Internet for that, she said.
“When they go to an advisor, they really need someone who understands them,” Freitag said.
“My message is that the sales process, and how we engage one-on-one in that interaction, either turns a person into a buyer or turns the person off.”
A lot of that has to do with the emotion that people feel when they are interacting with the advisor at point of sale, she said.
For instance, when the customers are well engaged by an advisor, LIMRA research indicates that the consumers report feeling “responsible” after leaving a meeting with the advisor. Others say they felt secure, prepared, and even “relief that, yay, I did it” after the meeting, Freitag said.
By comparison, when the engagement did not go well, the research shows that consumers report they felt “confused” after the meeting with an advisor, she added. Others have said they felt bad, overwhelmed or stressed out.
It could be that the negative emotions arose because of the language the professional used to engage the person, Freitag said. It may be he or she used jargon instead of everyday language, for example.
Research of this kind will lead to new ways of selling, Freitag predicted. It can affect everything from the sales process to recruiting, onboarding and customer engagement.
Linda Koco, MBA, is a contributing editor to InsuranceNewsNet, specializing in life insurance, annuities and income planning. Linda can be reached at firstname.lastname@example.org.
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