Relationships: The foundation of sales

One of the first things Lloyd Lofton does every day is scan the morning’s news headlines. Not only because he wants to be informed but also because he knows that many of the day’s events can translate into ways advisors can help ease a client’s concerns.

Lofton had a lengthy career as an advisor before founding Power Behind the Sales, where he trains advisors on sales presentations, handling objections and obtaining referrals.

On one particular morning, the news was focused on an impending winter storm that was set to upend life in a wide swath of the U.S. Lofton viewed that approaching snowstorm as an opportunity for advisors to break the ice with prospects and clients and position themselves as a trusted resource.

“I wonder how many advisors put a newsletter today or this week and sent it out with the message ‘Here are 10 things you can do to protect yourself from the storm’ or ‘Severe Weather 101 Basics’?” he said. “Every agent should have a one-pager with the top 10 things you can do, put it on their website, send an email to every prospect they talked to in the past year with a link to click to read the list, and then put a widget on their website so they can track who went to the site and downloaded the list. And you can use ChatGPT to create the list for you.”

This example not only is a way to provide some information that might help someone prepare for an event that many people fear — it also is a way to build a relationship.

“What I’m talking about here is communicating with people and relating with people, because insurance agents and advisors are trained to sell a product and they are looking for people to buy that product,” Lofton said, “but advisors are missing how to build relationships. They don’t communicate with people, and that’s because they don’t have a strategy.”

Lofton said that too often, advisors are focused on the products they sell but don’t look at them in terms of what consumers are buying. To learn more about what prospects want to buy, Lofton recommended advisors look at their book of business and then determine the demographics of their client base.

“Figure out where they congregate. It’s like we were taught and is still true today: Prospect where you pay, where you play and where you pray. Go to Facebook Ads and you can use their services to find out what your clients are interested in, what movies they watch, what websites they view, what magazines they read — and then you can run ads and drop your marketing piece in front of them.”

Research the prospect online

Lofton said that before meeting with a prospect, agents can use online tools such as social media sites or Zillow to learn more about that prospect’s likes and dislikes, where they live, and other facts that can be part of relationship-building. 

“I don’t understand why an agent will have a life insurance prospect, for example — and they already have their name, address and phone number — but they don’t go to Zillow and type their address in and find out when they bought the house, what they paid for the house, what the house is worth today and what the market is in their neighborhood. They don’t go to Google Earth and put the address in and see what’s around there — what grocery stories or chain stores are around there — so they can interject that into the conversation to make them feel to the prospect that they’re familiar. They don’t go to their LinkedIn page to see their posts and see if there is anything in common that they can connect with.

“These things take less than 10 minutes to do. I can get a prospect on the phone, and I can talk to him about his neighborhood. I can tell him that I bought my snow shovel and my snowblower from Home Depot, and I know that he lives less than a mile from Home Depot because I saw it on Google Earth. And chances are that he’ll say, ‘Yeah, I go to Home Depot too,’ because I triggered him.”

Generational marketing

Lofton also trains agents on what he calls generational marketing — marketing to prospects based on what predictable behaviors already are known about people in a certain age group. He gave an example.

“If a man is turning age 65, more often than not his wife will be 62 or 63 years old. Their oldest child will be between 40 and 45, and that child’s older child will be between 20 and 25 years old on average. The wife’s mother will be between 75 and 85 years old. We already know everything that’s going to happen in these generations — when they get married, when they buy houses, when they have children. None of these things is a surprise. 

“If I sell that 65-year-old man — Bob — a Medicare Supplement policy, here’s what’s predictable. Bob has worked for a company for 20 or 30 years. He and his wife have been paying for health insurance for 30 years or more — even if they had group insurance, they’ve paid for dependent coverage. I can reposition the money they’ve paid for their health coverage into a Medicare Supplement for Bob, and then I’ve freed up money that we can put into a stand-alone health policy for his wife because she will go off his plan when he goes into Medicare. This is also a good time to discuss final expense life insurance and estate planning with them.”

Bob and his wife provide a referral to their adult children, who have their own set of financial concerns typical of people their age and need help in easing those concerns.

“We already know that people in that age group are working and they usually have some type of retirement plan,” Lofton said. “We already know they have car payments and house payments and they’re going to have financial emergencies. All these things are predictable, and we should market to those concerns that we already know they have.”

Lofton said that the industry has done a poor job of teaching agents how to be business owners. 

“I think that the most important thing is they need to learn how to run a business first, then they need to learn how to market their business, and then they need to learn how to relate and communicate with people. We used to say they need to learn how to do a sales presentation, but it’s really about marketing and communicating with people.”

Ask the right questions

John Wheeler remembers a time early in his career when failure to ask the right questions of a life insurance prospect led to a missed sale and an embarrassing encounter.

“I went to see a young family — mom and dad and two kids — and I knew the husband obviously needed life insurance, because if something happened to him, what would the family do?” he said. “I assumed that was the case. 

“But when I made the follow-up appointment and returned to the home, the wife answered the door and said they weren’t going to buy the life insurance we discussed. I asked whether I had done something that wasn’t proper or whether I hadn’t explained something sufficiently. But she said that after our meeting, she learned that her husband didn’t love her and she was filing for divorce. Had I asked the right questions, I could have still protected the family to a great extent by playing to this scenario, as opposed to just assuming that he was concerned about providing for his family if he’s gone.”

Wheeler is a wealth advisor and president-elect of the National Association of Insurance and Financial Advisors. He said his No. 1 piece of advice for making the sale is to ask questions and not assume you already know what the prospect needs.

“If you ask enough questions, you can find out what the client is concerned about, what they want to protect, what they want to achieve.”

Wheeler’s second piece of advice is “Don’t talk jargon, and don’t sell off of illustrations. Sell off of concepts.”

He said, “If I go to a hardware store to buy a drill bit, I don’t want a drill bit, I want a hole, right? And if you can tell me how to make that hole other than with a drill bit, maybe that’s a better solution than a drill bit. But even further, if I know what the purpose of the hole is, and I find out that you want to put a hole by the front door to put in a molly jack to hang a picture of your grandmother who taught you all of your values, how much more meaningful an understanding do I have? So we must first of all ask prospects what they care about, what they’re concerned about and how they want to be remembered.”

Wheeler said he continues to ask questions until he understands what the prospect cares about.

“Then at some point, I will say, ‘With all due respect, I don’t have to live with the results of your decisions. You do. So, you need to know what you’re doing and why you’re doing it and be committed to it.’”

Wheeler quoted the adage “They don’t care how much you know until they know how much you care.”

He continued, “I’m not there for me. I’m there to help them make a difference.”

He works with many business owners, and he said asking the right questions and getting them to reveal their greatest wish for their business is the key to building a relationship and giving the right advice.

“We often assume the business owner wants to continue the business. But sometimes they don’t. They may be planning to sell the business next year. If we don’t ask the questions, we don’t know.”

Wheeler likes to start his discussion with business owners by asking them how they started out in their business. From there, he asks what they would do in their business today if they knew they could not fail. After that, he asks about who in the business is critical to that success, what would happen if they left the business and what the owner is doing to protect the business if they leave. The answers open the door to a discussion of key-person coverage.

“If we ask questions, we can get people thinking about what really matters to them,” Wheeler said. “For example, how long could you go without a paycheck without bringing on financial disaster? Another one I like to ask when discussing life insurance is, ‘Would you be willing to give me all your future paychecks for the amount of life insurance and assets you currently own?’ And when they say no, I ask, ‘Are you aware that’s what you’re asking your family to do?’”

Wheeler said he always asks clients and prospects how they learned about money, and the answer reveals a lot of information about that person’s mindset. 

He also refers to his fact-finding process as discovery and takes notes instead of filling in the blanks on a sheet of paper.

“I will ask whether they mind if we have a discussion and whether they mind if I take notes. And then when I repeat what they said while we’re having the discussion, it’s more meaningful because they know they said that.”

The life insurance discussion can be difficult for many prospects, but Wheeler said it’s all in the way that discussion is framed.

“If I talk about what they want to protect or what they want to achieve, it’s altogether different  because it’s about having a conversation on their terms.”

Understanding is the foundation

Understanding the client is the foundation of making the sale, Wheeler said. 

“Until you understand the client, what they care about, what they’re concerned about and how they want to be remembered, you don’t have a right to show them any recommendations,” he said, “because everything can be good if it’s used in the right place for the right reason. But there’s no single product that is the absolute solution all the time, and many try to make it that way.”

Success in sales is about relationships and trust, Wheeler said. 

“If you build trust with the client and you have a reasonable relationship with that person you’re going to get referrals as well. And there’s nothing better than a warm introduction.”

Great marketing doesn’t have to be expensive

Bryon Holz uses his personal passions to brand his practice. Holz is founder of Bryon Holz and Associates in Brandon, Fla.

One way is to send clients a bottle of wine with the custom label reading “Limited Edition Rock Vintage” in honor of Holz’s love of classic rock music. 

“Great marketing doesn’t have to be expensive,” he said. “Social media is almost free.”

Holz schedules his social media posts two months in advance. He posts a mix of topics from sources such as Life Happens, NAIFA and the Alliance for Lifetime Income.

“We have a very careful balance of material that educates, entertains and engages. You have to do all three, because if it’s all just education, that’s too dry. If it’s all just entertaining, you know, the people need to be fed. And it has to engage them so they can respond and be a part of it.”

Holz also is known for sending his clients printed birthday cards in the mail. He has been doing it for 42 years. Now that he is doing business with the children and grandchildren of some of his clients, the cards are sowing the seeds for future generational growth.

The cards contain a stick of Extra brand chewing gum, wishing the recipient an “extra special day.”

“It’s corny, but you know what? Corny works. It’s great and it makes a difference long term,” he said.

Holz supports his local food bank, and he also makes contributions to it on behalf of his clients during the holiday season, notifying them in a holiday mailing that he has done so.

“It’s the idea that our clients know that we’re thinking of the greater community,” he said.

When it comes to selling, Holz recalled something his mentor told him when he was new to the business.

“There are two ways you can make sure your house is considered the best one on the block. One is by knocking all the other houses, and the other one is by building yours up and improving on it. And I’m certainly in that category where I want to build our house up.”

More than a sale

Selling has evolved from getting the prospect to make a buying decision to creating a long-term relationship with a client, Holz said.

“Everything starts with a sale, but it must be more than that — where there is an advocate and an advocate and not just a salesperson.”

Holz often uses stories to illustrate concepts about planning and protection.

“One I used the most is the story of the two farmers: The one who deducted the cost of the seeds had to pay taxes on the entire crop later on, and the one who paid the taxes on the seeds and his entire bounty was tax-free when the harvest came. I refer to this in our annual reviews and ask clients to remind me which farmer they are. Of course, we’re talking about Roth IRAs versus traditional IRAs.”

Retirement planning is a big part of Holz’s practice, and annuities are part of the discussion.

“Studies show that people live longer, happier lives when they don’t have to worry about their income or how the market affects them,” he said. “I typically review a strategy where clients’ basic fixed expenses are covered by fixed-income sources such as Social Security and any pensions they have, and often annuities with the rest of their assets in places that are more liquid or can help with emergencies or opportunities. I share with them that annuities shouldn’t be considered good or bad but whether they’re appropriate for a given situation. Would you go to a doctor who only prescribed one type of medicine? I wouldn’t.”

A big differentiator

Ann Baker Ronn is the owner of Income Protection Solutions and a financial advisor with The AFP Group in Houston, Texas, where her firm does flat-fee financial planning as a way to get prospects in the door. The firm charges a fee for a one-time consultation.

“It’s a big differentiator for us,” she said. “We’re not trying to sell someone something. If they do decide to come and invest their money with us or buy insurance from us, that’s a bonus, but it’s not a requirement.”

Ronn said her firm has consulted with people whose concerns range from reviewing a portfolio to passing assets to children to long-term care planning for their parents. Some have stayed on as clients.

“We charge a fee so we can be compensated for our time, but if someone decides not to work with us, we didn’t waste our time because we didn’t do a lot of work,” she said. “But it’s a great way to build a relationship with people because you end up finding out every single thing about them, and they find out things about themselves that they didn’t even know.”

Flat-fee planning allows advisors to not try to sell a product but to do what is in the client’s best interest, Ronn said. “If you’re not trying to sell them something but you’re trying to help them solve their problems, it builds a relationship with them.”

She said flat-fee clients who eventually became clients for insurance or other services have strong relationships with her firm, “because we already know everything about them,” she said. 

“This is not for everyone. It takes a lot of patience. If you have someone who likes doing all of that, it may be something to incorporate into your practice.”

Ronn makes a point of repeating back to her prospect what they say to her during a meeting. 

“I say to them, ‘I want to make sure that I’m understanding what you just said. What you want from us is 1, 2, 3 — these are the things that you want to achieve.’ I think too often we go on to the next topic and people think we’re not really listening to them, so repeating back what they just said is showing you want to clarify what you’re understanding.”

Education is another stepping stone to obtaining and keeping clients, Ronn said. She cited life insurance as an example.

“My business partner is really good at explaining four types of life insurance — term, whole life, universal and variable. He goes through each type and lets the client make the decision. When people understand you’re not just trying to sell them something — you’re trying to educate them — they’re going to be much more involved with the process. They’re making the decision instead of you just shoving something down their throat.”

Susan Rupe is editor in chief, magazine, for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected].