(If this article resonates for the challenges you have in your agency, be sure to check into the Small Business Sales Manager Coaching Program)
In coaching hundreds of insurance agents over the years, I’ve become aware of a challenge that has arisen for many of them. As they’ve added additional products and services to their mix, their sales processes have become jumbled and muddled.
They don’t sell a few straightforward insurance products anymore. Instead they are now insurance providers, financial planners, health-care agents, and wealth managers that offer a wide-range of financial products to their customers.
It can be confusing and overwhelming for the agent, and it creates a larger problem when they are managing a sales team. If their people treat all of their sales efforts the same, they lose out on a lot of opportunities and they drive the wrong activities in their business. It’s more important than ever to clarify these distinctions for your team.
Two Sales Processes Live Side-by-Side
When offering a full portfolio of financial offerings, it’s important to remember that the different products fulfill different roles for customers. They are coming into the sales conversation with different needs and expectations.
There are two main categories of products that agents offer: demand and non-demand.
Demand Products
These products fall under the umbrella of “need to have”. These almost always involve protecting a physical asset or insuring against damages that could be caused through action or negligence.
The two most common products in this category are auto and home/fire insurance. Customers don’t decide whether or not to get them, they are forced to acquire them by an outside party. Laws require motorists to carry insurance in case they cause harm that they would be liable for. Mortgage companies require homeowners to insure their properties in case of damage (because technically, the house belongs to the bank).
That means that there is already some demand for the product, even before the sales process begins.
Non-Demand Products
The products that aren’t required by law or another outside party fall into the non-demand category. These are products that are “nice to have”. They might be incredibly valuable based on a customer’s situation, but they can choose to forgo them based on their own preferences and means.
Life insurance products of all stripes falls in this category, as well as additional insurance products like disability, long-term care, or umbrella liability policies. Also, investment vehicles such as mutual funds and annuities come under this heading.
Whether or not someone chooses to buy one of these products is based on their financial status, risk-aversion, family composition, and a host of other considerations. They don’t come into the sales process with some pre-existing demand.
Different Buying Questions
Because they solve different pain-points for customers, demand and non-demand products lend themselves to different sales processes. There are two distinct questions that the customer needs to answer, depending on what’s driving their buying decision.
“Why should you buy from us?”
Sales reps don’t have to convince customers to buy demand products. That decision has already been made for them. For example, if they want to drive legally, they need to buy auto insurance. They are already in the market.
The question that needs to be answered for these customers is “Why you should you buy from us?”. The focus of the sales conversation needs to be on what distinguishes you from the other providers in the market. Price will often be a driving factor, but it’s important to bring as many other differentiating factors as possible. Anything that demonstrates why you aren’t just an interchangeable commodity is important. This can be the quality of service, brand-name, or convenience.
But at it’s heart, the conversation isn’t about whether they should make a purchase. It’s simply about determining where they are going to make it.
“Why should you buy this?”
When selling a non-demand product, the first decision to help the customer through is whether they should buy at all.
For example, before someone can be convinced to buy life insurance from you, they first have to be convinced that life insurance is a valuable investment. They have to see how the product fits within a broader context of their lives. And they have to understand how it solves challenges that they are facing now or in the future.
It’s necessary to first guide them through the process of choosing to purchase the product. They have to agree that it’s an investment worth spending money on in the present. Once that decision has been made, then they are ready to decide whether or not to work with you. It’s often the case, however, that the person who helps walk the customer through the broader questions has earned the trust that gets the sale.
Sales Activities
These different sales cycles require different activities to drive success. Or rather, many of the activities will be similar, but they will have a different focus.
Volume Focus
Non-demand products require activity that is focused on bringing new prospects into the sales funnel. Because most customers are relatively price sensitive, it’s easy to bring new opportunities into your sales pipeline. Customers are always looking for a good deal, or a better deal.
It’s important to have a large number of initial contacts on a regular basis. These can be driven by advertising, referrals, or by cultivating existing customer lists. A clear follow-up program is also critical. The process is relatively linear and success is often correlated to volume.
Relationship Focus
Activity is just as important in selling non-demand products, but the decision-making process is longer and there are more variables involved. Because the stakes are often higher (in terms of money involved and problems solved), relationships and trust play and much larger role.
Creating the initial conversations around non-demand products is important. This can be driven by uncovering opportunities in current customer lists or through referrals. It’s also critical to invest time in guiding the buyer through the decision-making process. There will often be multiple conversations and meetings, and the salesperson’s skill will play a key role in their success.
Sales Manager Focus
Distinguishing between these two different sales processes makes your sales management and coaching much more effective. Because most team members sell both demand and non-demand product lines, you need to help them navigate their different sales responsibilities.
Show your salespeople the different sales cycles and how to leverage their sales activities within each of them. Depending on the experience and tenure of the salesperson, you can even break down the different activities based on what product they are focused on. Especially when a salesperson is green, helping them understand the difference between the two sales pipelines can illustrate the best way to focus their efforts.
Define clarity and focus for your team
It will depend on what the exact responsibilities are for your salesperson, but a few additions you can make to your sales management conversations:
- Clearly define sales expectations for both demand and non-demand products.
- When assigning lead sources, highlight the types of products that will fit with the prospects and outline the main value propositions.
- Instead of tracking outbound calls and emails as a single number, distinguish between the purpose of the activity. For example:
- Demand – new marketing lead, following up on a given quote, calling back a lost deal based on their x-date, etc.
- Non-Demand – existing customers who have moved to another age or family-bracket, on-going sales conversations, etc.
- Focus group training on specific interactions that build value in each of the different sales cycles.
- Analyze individual’s success rates based on product type and coach each person to based on their needs
You’ll find that sales representatives will often excel at either demand or non-demand sales. That’s normal because they are different processes that lend themselves to different strengths. The goal is to encourage and support their strengths while also building up their weak areas.
And when your conversations can revolve around these different areas of the business, you will find them more productive. You can identify the real areas of opportunity for your sales people, and you can help them succeed.