I have been wondering why people have a negative bias against annuities as “bad investments” when they would cry bloody murder if their Social Security were taken away from them.
I thought, “Do people even know that Social Security is an annuity?” This led me to start asking more probing questions to uncover this bias. I handed out a bias questionnaire developed by my colleague, Ryan Poterak, which uncovers bias in a completely conversational way. It is brilliant. If you properly identify and address the bias, you will make a sale if there is a need. This is exactly what happened to me in two instances. When I alleviated the bias it led to the sale and greater than $50,000 in commissions.
Frank Maselli is an industry-wide coach and extraordinary public and motivational speaker. He wrote the best book I have read on referrals called Referrals, The Professional Way. He correctly points out that referrals in our industry are the hardest referrals to come by, 1,000 times harder than telling your friend that you have a good plumber or electrician. From the client’s point of view, they have nothing to gain and everything to lose from giving you a referral, especially if you turn out to be the sales person who crams insurance or annuities as the solution down their throat. This fact is magnified when dealing with high-net-worth (HNW) clients.
Maselli says that HNW people give you “two basis points of thought” and when I read this phrase, it made it perfectly clear that I needed to alter my expectations and my approach to my wealthy clients. I started focusing on not being in my clients’ minds but a fraction of the time and this altered my approach on how to reach them, how often to try and most importantly, what conversation would they be interested in having to get them to pay attention more than two basis points of the time? I have successfully closed my two wealthiest existing clients on additional annuity and life insurance business this year and I have new found ideas for referrals based on all the valuable insights of Frank Maselli.
What I am getting to here is that to be successful, you need to think about the client and what is important to them. By successfully creating the conversation they would like to have with you and if you identify the bias correctly, you will be on your way to the sale in a consultative way.
For instance, my magic bullet is the conversation about the IRA with business owners. The IRA can go through triple taxation before it reaches the next generation and my approach to a business owner is this; “What I know business owners have in common is that you buy wholesale and sell retail to maximize profits. To keep the maximum profit, you minimize your biggest business expense besides payroll, which is taxes. Because you have done well and saved according to the IRS plan of saving through your company, you now have a triple tax problem under current law. It is my job to show you how to deal with this in the same way you would deal with any problem you came across that might impede growth and development in your business. Are you interested in seeing what I mean?” With this approach, which conveys respect and knowledge of some of their business issues, I ask for permission to show them how they would solve this problem in their business if they were the expert. Since I am the expert in this area, I ask them to give me the ability to lead the discussion.
Respect and knowledge of the issues of your target market brings you to the doorstep of your own customized secret sauce creation. You must learn about and be an expert with the products you sell so that you can never be exposed as unknowledgeable to the finer points of your solution. This is essential to the consultative developmental process.
You do not have my personality nor my expertise. You cannot do what I do. It is extremely important for you to develop your own understanding of how to create your own conversations that matter to your target market. You do that by learning the strategies that make seasoned professionals successful. I call it the American Idol success formula; make the song you cover your own and sing with passion.
By developing a customized conversation about bloated IRAs for HNW people who do not need them for income has exponentially grown my indexed annuity and second to die life insurance business. My referral business has expanded through my small network of advisors whom I have educated to be my strategic partners. I am considered an expert annuity consultant, a bias-busting personality who can help people financially in positive ways. I have just given you the secret sauce. If you understand what I have shared. Use it well.
Barry Goldwater, principal, works with a few CPAs, financial planners and wealth managers in the Boston area as their strategic insurance partner. They rely on his insurance solutions for their clients.
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