November 17, 2020 by Sheryl Moore
One of the biggest reasons that people put their retirement savings monies into Certificates of Deposit (CDs), rather than annuities, is because they are comfortable with their bank. They know what a CD is; their parents likely had some. The bank is real; they can walk inside of it. They know people at their bank; they have had relationships with them for years. People can see their CD values on their online banking app every day, or even on their monthly bank statement. Plus, customers have the assurance of that plaque in the drive-up, which says that their deposits are insured up to $250,000 by the Federal Deposit Insurance Corporation/National Credit Union Administration. Their money is safe.
On the other hand, most people who talk to their insurance salesperson about annuities have never even heard of annuities before. Likely none of their friends or family have mentioned these retirement income products. Shoppers may not have ever heard of the insurance company that offers the annuity either; much less walked-into the building. The only person they know “from the insurance company” is the salesperson pitching the annuity. Depending on the insurance company, their only opportunity to see their annuity values may be an annual statement. Insurance agents aren’t allowed to put signs in their offices, or on their business cards, that give the assurance of the guarantees offered by the National Organization of Life & Health Guaranty Associations (typically $250,000, but varies by state). Salespeople can only discuss NOHLGA if the prospect inquires “what happens if the insurance company goes under?” How can people be expected to feel that our products are safe?
Disadvantages of the Intangible
Life insurance is not much different, but at least most consumers have heard of insurance, and understand what it is used for. So, how are YOU supposed to sell an intangible product in these circumstances? You build trust.
Today, more than ever, people need the protections of the products that you offer. The top fear of American’s is running-out-of-money in retirement. Only about half of our nation has life insurance, and half of those people are underinsured. The protections you offer are so vital. Yet, the ability of many to trust a person they don’t know (you), with their hard-earned money can be a hard sell.
Based on feedback from annuity and insurance purchasers, here are a few things to consider when building trust:
- First thing you can do is to listen.
- Let the prospect tell you what their concerns are; what goals they are trying to achieve.
- Don’t talk at them.
- Validate what they say by repeating back to them (“If I understand correctly, you…”).
- You don’t have to be the smartest person in the world, so don’t act like it.
- Provide eye contact to both spouses.
- Admit if you don’t know something, but ensure them you will get the answer.
- Show interest in what interests them, whether it is grandchildren, their dog, or golf.
Building genuine relationships
Take the time and invest in your prospects and customers to build genuine relationships. Consider the following steps:
- Help clients understand why your product recommendation is the best choice, based on their needs.
- Explain what the tools you offer actually do, and in layman’s terms.
- Patiently answer any questions that they may have.
- Offer to provide written explanations or materials, to aid their comprehension.
- Remember, everyone learns differently, so visual aids may be needed for some
- Have a specimen contract handy, to offer for their review, before your close meeting.
- Don’t pressure the client. Fire sale-type warnings about rates declining, and bonuses not being available only scare off prospects.
- Offer to have your client’s children sit-in on your meetings.
- Do whatever you can to represent yourself as a trustworthy financial expert, worthy of earning their business.
- Follow-up, and follow-through.
- Use good customer service.
Ultimately, those who do a good job are not just going to close the sale. They have a better opportunity to earn the business of the client’s beneficiaries. Referral business isn’t something you need to ask for if you follow these rules either. People are quick to refer others to you, when you show that you care, you are knowledgeable, and you have good communication skills. Be awesome, and the sales will come.
Sheryl Moore is President and CEO of the life and annuity market research firm of Wink, Inc. Her company provides competitive intelligence, market research, product development, consulting services and insight to select financial services companies. She may be reached at firstname.lastname@example.org.
Wink’s Note: I am going to preface this with, “Although I am a licensed non-attorney insurance salesperson, I do not endorse any company or product. Sheryl J. Moore has an education in psychology and political science/pre-law and is recognized by The Buckley School of Public Speaking for being an expert communicator.”
While YOU are freaking-out, and thinking that your prospects won’t find the products that you have to sell TODAY “attractive,” your prospect is online learning about CD alternatives. Just saying…
Finaly, we really appreciate NAILBA! – sjm