Why Did The Insurance Agent Cross The Road?

Because he didn’t want to change the way he’s doing business even though people are making twice what they did before Obama Care.

Do you know the number of insurance agents who left the industry thinking they could no longer make money since the commission percentage dropped so drastically? I guess they didn’t consider the fact that insurance premiums would not only double but triple in some cases; also, people are now required to buy insurance making the potential market much greater than it has ever been. It’s kind of like those “Darwin Awards” where stupid people died doing the most ridiculous things but you figure this a blessing to humanity weeding out the gene pool to improve society. The agents, who couldn’t think further than the numbers they’ve grown to love, no longer exist in the industry; creating an even greater opportunity for those who saw the chance to capitalize on the changes that occurred.

Now that the trees and bushes have been shaken and the dead fruit removed, why are some agents still struggling to make ends meet? Surely the increased business should have made it possible for all agents to improve their income and take their business to a new level. Well, not if they are doing business according to the same model they used prior to the ACA.

If you’re still driving house to house and appointment to forgotten appointment, you stand to lose heavily in the efficiency and production battle. When you stand to make only 2% on a BCBS plan and you are driving from one house to another pushing this “opportunity?” you couldn’t possibly earn enough to pay the gas and insurance on your car. Because the market has changed, interest has changed and the way people are seeking insurance has changed; there must, of necessity, be a change to the successful business model as well. So what are the leading agents doing to make even more than they did pre-ACA?

No longer is knocking door to door effective. No longer is buying leads, setting up appointments then driving all over the country to try and sell them—an efficient use of time. No longer are incentives and rewards as effective in tantalizing and compelling agents to do “anything” to make a sale. What are agents, selling more than $100k in annualized premiums per week, doing so differently than successful methods utilized less than a decade ago?

Here is the new strategy in a nutshell:

1. They buy leads:
   1. “Hot transfers” are the best but also the most costly ranging from $25 to $45 but average sales may be up to 50% costing an average $90 per acquisition.
   2. “Exclusive leads” are more effective than shared and tend to sell maybe 1 in 4 to 8. At about $12 per lead that equates to about $96 per acquisition. Note, an exclusive lead means only that it is exclusive to that lead generator. The prospect may have also called other lead generating companies so they could still complain they have received 10 calls prior to yours but it remains a valid exclusive lead from that company.
   3. “Shared leads” means the lead has been sold to at least 5 and maybe more agents. However, these leads are very low cost, usually from $3.50 to $5.00. The benefit is that you can build up your database much faster and cheaper utilizing this method. However, you may only sell 1 in 20 making the cost per acquisition $100.
   4. Lists could cost anywhere from $0.10 to $1.00 per lead but typically are not worth calling. They are still valuable if you have a drip marketing system or predictive dialer to call through the list periodically. The idea is to hopefully contact them at a moment when they are in the market. The cost per acquisition in this case varies dramatically because of the unreliability of the lists. Personally, I have called a number of people on such lists that have been dead as long as 8 years.
2. They have an automated CRM and drip marketing system that keeps their leads organized and contacts the lead in writing immediately, even before they have a chance to call. They use drip marketing to induce interest and automated dialers to limit the number of answering machines they talk to each day. The proper use of a dialer should dial through several hundred numbers every dozen minutes or so until a person actually answers the phone. The drip marketing system will continue to send emails at your chosen intervals to stay in front of the lead until they are ready to look into a different policy.
3. They call and don’t travel. Traveling to appointments costs time, money and effort. You can’t possibly engage as many people traveling as you could on the phone. Sure a face to face is more meaningful and easier to sell but reality is, because the government is forcing people to buy your product at the threat of fines grievous to bear, it is like shooting fish in a barrel. You may have your fishing pole with enticing bait but agents following the new business model have shot them before you could cast your line.
4. They have a system in place to continually and automatically stay in touch with their clients to maintain retention. Retention is one of the greatest concerns for agents because it’s the easy money and if you can’t keep your customers then you have to continually work like you did your first year with no relief in the form of residual income. Retention is lost because, although you may have done a fine job of establishing rapport and making a friend one month after they bought they don’t remember your name. The second month they don’t remember what they bought. The third month they are approached by a new charismatic agent who convinces them they have a new product that’s better than what they currently have. Keeping in touch through an automated system makes it easier for them to remember you and stay loyal.

So why would the insurance agent bother to cross the road when he has a phone, CRM and backup system to make him efficient, productive and a number one producer-- right there in his office?

About the Author

Scott L. Taylor is the author of The Opportunity In Every Problem” Mentor for unemployed and ex-offenders who are trying to get back into business society, and Director of Sales & Marketing for Cloudia Assistant. He is passionate about leadership, ethics, entrepreneurship, sports, positive reinforcement, motivational thinking, and loves helping individuals and organizations realize their potential and take the steps necessary to achieve it.

For more information, check out his LinkedIn profile, follow him or view the Cloudia Assistant website, www.cloudiaassistant.com.