Cost objection has long been one of the major challenges agents face when selling insurance. Today, as the economy tightens and consumers become more selective in what they spend money on, that challenge will continue to become larger.

Research by Agent Media, publisher of the Agent’s Sales Journal, shows that cost objection is consistently ranked among the top five insurance sales challenges, and when different lines of insurance are measured, is cited by as many as 75 percent of agents as the biggest obstacle they face.

Carriers in different segments of the industry are responding to the tightening environment, attempting to offer products and incentives that will help agents overcome the cost issue when working with clients.

Following are some solutions offered by a number of companies in the health insurance, benefits, life insurance, long term care insurance, and disability insurance markets.

Health insurance: High deductibles, rate guarantees
One method carriers are using is offering more products that allow for higher deductibles, which lead to lower premiums. In the health insurance field, for example, “carriers are trying to offer a diverse choice of health insurance designs, and by doing that, you go to higher deductibles and get extremely lower premiums,” said Ron Buffman, president of the Texas Association of Health Underwriters (TAHU). Cost objection was cited by 45 percent of health insurance agents in the 2008 Agent Media Health Insurance study.

Some of the newer products offer coverage for catastrophic illnesses while providing a deductible as high as $7,500, Buffman said. These appeal to consumers who have enough money to handle routine medical costs but want to be protected in the event of an extended hospital stay.

In addition to higher deductibles, some carriers are offering guaranteed rates for multiple years.

Assurant Health, for example, offers a two or three-year rate guarantee for most of its products, said Mike Norderhaug, vice president of sales strategy for the company. Consumers trade paying a slightly higher premium for the knowledge that the premium will not increase during the policy term, Norderhaug said.

Assurant also offers a variation on the higher deductible/lower premium approach adopted by many carriers. For certain high-deductible products, for example, if the consumer does not reach the deductible through claims, the deductible is lowered every six months while the premium remains the same. This helps meet consumers’ concerns that they are paying for coverage that they don’t use, he said.

Providing a wide range of deductibles is part of an overall trend in the health insurance industry to provide more “consumer-directed” products, said Carolyn Goodwin, former president of TAHU.

“We want to get the consumer more involved in their health care decisions. People are being given multiple options about the kind of coverage that they want, and how they want to spend their money.”

That involvement can also include participation in wellness programs. With some carriers, said Buffman, “if you are participating in a wellness program, you will see a decrease in your premium.

From the carrier standpoint, if we become healthier people, health insurance costs will decrease and will therefore decrease premiums.”

Benefits market: Wellness plans take the lead
Wellness programs are visible in other segments of the industry, as well. Health benefit administrators are among industry groups featuring the programs on their Web sites, and using them to help reduce insurance costs. Thirty-five percent of survey respondents in the benefits area cited cost objection as a challenge in the 2008 Agent Media Benefits Market Study.

Wellness programs focus on preventive measures to help reduce the instance of claims. For example, Meritain Health offers a program to new clients that provides them with a comprehensive blood test screening for such components as cholesterol and cancer. The test is used to “help identify tomorrow’s claims,” said Dave Parker, Meritain senior vice president of sales. Meritain pays the costs for the tests for the first year, with subsequent years covered by the employer as a claim.

While there is a cost to the employer, Parker said that detecting diseases before they’ve had a chance to worsen saves lives and helps maintain health care costs.

Life: Premium refunds, combo packages
In the life insurance arena, where 35 percent of agents in the 2008 Agent Media Life Insurance Study said cost was a sales challenge, carriers are trying a combination of customized policies and other approaches to help make it easier for agents to sell to their clients.

Premium refunds have become one regular part of the mix. Some carriers have begun offering refunds on term insurance policies where the client has not used the policy before the term ends. In other cases, carriers are trying to ease the “sticker shock” of whole life policies.

For example, Massachusetts Mutual Life Insurance Co. (MassMutual) offers a whole life product that allows customers to recoup 90 percent of their premium if they cancel within one year of taking out the policy. At the end of five years, they can take back the full amount of their premiums, said Craig Waddington, vice president and actuary for U.S. insurance group product management at MassMutual.

Sticking with the overall industry theme of customizing products to try to reduce premium costs, MassMutual also offers a policy that mixes whole life with term insurance. The policy starts as term, with the customer paying whatever part of the whole life premium is affordable. As the whole life portion begins to pay dividends, it covers an increasing amount of the term premium, Waddington said. Eventually, the policy can be converted to whole life.

Prudential Financial is another carrier working on keeping premium costs down so agents can more easily sell policies, said Hank Ramsey, vice president of product management in individual life.

While Prudential has a return-of-premium term product, and is working on a reduced-premium whole life product, through the use of technology and other efficiencies, the company strives to keep premium costs as low as possible.

In addition, AIG American General has, among other measures, launched a universal life product with lower premiums and new underwriting classes between standard and premium and added a term life policy with customizable dates that in some cases has resulted in a 16 percent reduction in premium costs, said Leslie Hiltabrand, communications manager for the company.

Education key in LTCI segment
Cost has always been a challenge for agents selling long term care insurance, said Jesse Slome, executive director of the American Association for Long-Term Care Insurance (AALTCI).

Seventy-five percent of long term care agents in the 2008 LTCI Study reported that cost was the biggest objection they faced from clients.

While there are some initiatives carriers are taking to help provide agents with flexibility, Slome said one of the biggest ways to overcome cost objections is to educate consumers about the actual costs of long term care insurance. “Consumers have the mistaken impression that long term care insurance is expensive,” said Slome. In response, AALTCI has developed promotional materials designed to help consumers understand what the costs are.

AALTCI’s efforts are also aimed at the increasingly younger market for long term care insurance — the average age of a policyholder in 2000 was 67, while in 2007 it was 58, Slome said. A key point the association tries to make is that there are good reasons to take out a long term care policy when you are young and in relatively good health, Slome said.

“You need to health-qualify for long term care insurance,” he said. “If you wait until you’re in your mid-60s, two things are likely to happen. The first is you’re much more likely to lose good-health discounts, and second, the worst-case scenario is that your health condition has gotten worse and you can no longer qualify at all.”

AALTCI also works to educate consumers and producers alike that a full-fledged long term care package isn’t always needed and that choosing a lower level of benefits may provide adequate protection for the insured and significantly reduce the premium, he said. Calculating inflation protection in different ways is one example of how costs can be reduced. Some carriers also offer the ability to purchase a base level of coverage, with the ability to add to it as life circumstances change. That allows the consumer to “lock in” the health qualification, Slome said.

More targeted coverage for DI clients
In the disability insurance segment, where 61 percent of agents in the disability portion of the 2008 Health Insurance study said their clients perceived coverage as too expensive, carriers are starting to offer a greater breadth of coverage types to make coverage less expensive for those put off by the price.

According to Bob Taylor, executive director of the Council for Disability Awareness, the industry has been making several creative moves toward more accessible and more affordable products, including a push toward increased awareness of the true cost and value of disability insurance.

“Clearly one of the challenges of the industry is this is a difficult, somewhat complex product to sell, probably more than any other genre of products,” Taylor said. “I think we’re starting to make inroads in getting [the message of value] out and that, combined with efforts on the part of insurance companies to make it easier to buy and sell their products, those forces are coming together and are showing bright signs on the horizon.”

Among the disability companies working to make their products more accessible is Berkshire Life Insurance Company of America, which is offering policies that allow consumers flexibility in what coverage they have. As their life circumstances change, their coverage can change with it, said Larry Hazzard, senior vice president for product and marketing.

And Unum Provident recently placed their traditional employer-funded product and their employee-funded voluntary product on one platform, allowing for a lower spread of risk and lower administrative costs that can then result in lower rates.

Mike Simonds, chief marketing officer for Unum U.S., urges agents to discuss with clients any group disability offerings their employers may offer, as group policies typically carry a lower premium than individual disability products. Tweaking coverage options such as elimination and benefit periods can also help further tailor the coverage to meet both budget and needs, he said.

Ultimately, cost should be no concern for those looking to shield themselves from mounting bills and potential loss of income. In reality, however, it can be difficult to motivate clients to think beyond the now and see the true return on investment of a major insurance purchase. Combining education with new solutions, however, can help ease your clients’ cost concerns

The Wall Street Journal recently called the individual health insurance market a “prime business opportunity” for insurers. How right they are. This market is expected to generate more than $100 billion in annual premiums in the under-65 market and an additional $200 billion in senior markets. Estimates coincide with what many health care experts are saying: The individual health insurance segment is rapidly becoming the biggest and most promising growth sector for health insurers and agents.

How do agents fit in? Well, it’s fairly obvious — they are uniquely positioned to help carriers sell these new products by providing the education and high-touch support that these emerging consumers need when comparing and purchasing coverage options.

If you haven’t yet devised a strategy to help you get your share of the estimated 25 million new individual, family, and senior paid policies that will be written in the next four to five years, the time to do so is now.

Following are three tips that will help you gear up for this rapidly emerging market.

#1: Keep up with the times
The individual market has been largely ignored for decades by the nation’s leading health insurers. So why the sudden interest? There are two key economic forces driving the rush to capture this market. First, commercial health insurance sales have basically flatlined since the early 2000s. Skyrocketing premiums have forced employers in the small and mid-sized markets to eliminate group health coverage, shifting the purchasing decisions and costs to individuals. If employers continue to opt out of group health plans, the number of individuals expected to need new coverage will increase substantially. According to the Economic Policy Institute, between 2000 and 2006 alone, an estimated 8.6 million Americans became uninsured, due primarily to the erosion of employer-provided health insurance. A lingering recession can only increase this movement in the near term.

Second, there is increasing pressure on policymakers to cover the 47 million uninsured Americans. According to a 2003 report by the Institute of Medicine, the U.S. spends about $35 billion per year to provide medical care to the uninsured.

These medical costs create a huge ripple effect throughout the economy.

Policymakers are demanding new programs to cover the uninsured and are calling on private health insurers to provide the plans that will meet these consumer needs.

In light of all this, be sure to keep abreast of state and carrier developments, because today’s market can move very fast, enabling legislation and new carrier initiatives. In fact, one recent carrier initiative targeting the uninsured in a small state generated 20,000 new sales in the span of eight weeks.

#2: Get to know your customer
Historically, the insurance industry has defined the “uninsured” as a “high risk” market segment, largely composed of individuals with pre-existing medical conditions and those who were unemployed. Today, that definition couldn’t be farther from the truth. As it turns out, 85 percent of uninsured Americans today are employed, almost half are between the ages of 18 and 34, and about 75 percent describe their health as “excellent” or “very good,” according to a recent Census Bureau survey. Most have some college education, and about half earn incomes that put them right in the middle of the middle class. This makes them prime candidates for individual health coverage.

#3: Understand your role
Agents are uniquely positioned to play a growing role in the sales of individual health plans, educating and guiding consumers to the coverage that best suits their family, health status, and financial situation. But these sales will be unlike anything you’ve sold in the group market. These prospects spend hours plugged into the Internet for entertainment, socializing, learning, and shopping. Already, according to Celent, about 50 percent of individual health insurance purchases are initiated or completed online, and that number is expected to increase to over 90 percent by 2012.

So where does that leave agents? Fortunately, agents are positioned to be the most important facilitator of coverage. Why is that? Because even with all the information and access that the Internet offers, the vast majority of shoppers require assistance from a professional advisor to understand and sift through the growing list of products, as well as numerous network, pricing, and financing configurations.

So regardless of where you’ve been and what you’ve sold in the past, when you make the effort to keep up with health industry developments and initiatives, learn all you can about your target market, and develop a solid understanding of your role in the industry, you can position yourself for success in the burgeoning individual health insurance industry.

Type “health insurance” into Google, and you get just over 39 million results. That beats about 27 million for “life insurance,” 13.3 million for “annuities,” and less than 1.5 million for “long term care insurance.”

Now, type in “health insurance” + “quote,” and you’ll get nearly 2 million Web sites offering health insurance quotes, applications, and policies.

People buy shoes and clothes online. They buy books and computers, food and wine, all without stepping foot in a brick and mortar store. So it only makes sense they’d shop for their health coverage online, as well, especially given the wealth of available options.

Liz Kenneally, vice president of business development for Oxonia Insurance Group Inc., a national health insurance agency, said she has noticed a sharp upward trend in the number of major medical policy sales made over the Internet or the telephone.

“I feel the Internet will facilitate the sales of health insurance,” said Kenneally. The key word here is facilitate. Lots of consumers use the Internet in an attempt to self-diagnose health problems, after all, but that doesn’t mean they’re not going to the doctor.

“(Clients) will need the assistance of an educated, licensed agent to discuss the different options,” she said. “The face-to-face, though, I think that’s going to dwindle because as our population gets older, consumers are more savvy on the Internet. What consumers are looking for is the ease of buying something without the hassle of having someone come to your home.”

And not only has the online health insurance market changed the way agents sell policies, said Kenneally, it’s changed the way they must market themselves, as well.

“It’s like ‘location, location, location,’ and the location is the Internet.”

Kenneally talks more about health insurance technology on page 26, as part of our 2007 Health Insurance Selling Guide. We kick off the section with the results of our Producer’s Health Insurance Survey, which asked producers about their experiences in the health insurance, consumer-directed health care, and disability markets. Those results and the accompanying analysis start on page 16. We also include articles about group health, limited benefit plans, and recent HSA changes that may make it easier — and more lucrative — to do business.

Will you become disabled?
I once had a job where, in the first week, I had a question about the benefits I was signing up for. I needed to know what was included, as some benefits were completely paid for by the employer, and I inquired about the premium for the long and short-term disability benefits.

I got a curious look from the HR supervisor.

“Gosh. Disability? I don’t know. Why do you need that?”

I paused. “Well, in case something happens to me.”

“Isn’t that what your parents are for?”

This is a true story. People have the craziest ideas about where the money will come from should something, God forbid, happen to them. That is, if they have any ideas at all, which I’d wager that most consumers don’t.

In fact, according to a recent study conducted by Milliman Inc. for the Life and Health Insurance Foundation for Education, the probability of a white-collar worker becoming disabled for 90 days or longer be-tween the ages of 35 and 65 is 27 percent for men and 31 percent for women. And a 35-year-old, white-collar male who suffers a disability lasting 90 days or longer will be out of work for an average of about six years.

Yet, according to another study conducted by the Council for Disability Awareness, 56 percent of workers didn’t realize that the chances of becoming disabled had risen over the past five years, and nearly 60 percent of workers have not discussed how they would manage an income-limiting disability.

It’s the same reason some people put off going to the doctor or taking their car to the mechanic. They don’t want to think that something is wrong, and they don’t want the bad news. Buying disability insurance is somewhat akin to admitting you may eventually and prematurely lose your ability to earn a living. It’s a big step.

This month, we offer a few articles on disability insurance, explaining the need for it, and assessing when it’s appropriate — and when it’s not. This all starts on page 32. Judging from the number of consumers who underestimate the chance of a disability affecting them, and the number who overestimate the cost of insuring against that disability, your clients have a lot to learn. So get out there and start educating.

No one will argue that qualifying is one of the keys to successful selling. If only there was a magic “qualifying” wand to wave and have all your prospects turn into customers with one phone call. A more realistic way to qualify in today’s competitive environment calls for a new approach, sharpened skills, and often an attitude adjustment. Doing your homework, asking the right questions, and qualifying prospects through every step of the sales process will ensure you never again waste your time on prospects that will never buy.

The new, improved approach to successful selling
Keep these points in mind before your next big appointment:

1. Qualify early and often. Selling is a continuous chain of events — each event moves the process forward. Sales is also a process of mutual understanding through management of expectations and commitment by both parties. Setting the expectations of the relationship up front eliminates confusion and wasted time.

This involves continually moving the process forward and making sure you repeat the process at the start of each new step, at the beginning of every phone conversation, in emails and letters, and at the introduction of new players.

2. It’s about them, not us. Today’s selling requires engaging the prospect with something of interest to them. It also means thoroughly researching the company, the industry, and the competition. Build a strategy to plan your selling approach and become an expert on your prospect. Put yourself in the prospect’s shoes.

3. Learn how to ask the right questions. The only way to uncover the truth with people is to ask questions and listen carefully to the answers. Sales is not about honing your ESP. Keep asking questions until you gain clarity about the real issue.

Asking good questions is the key to discovering the prospect’s financial tolerance — what they’re willing to spend to eliminate or reduce a problem or challenge. At what point would you like to find out that a prospect has budgeted only $25,000 for a particular project when your initial phase starts at $100,000? The time to address the budget is before you make a presentation or do any kind of proposal or bid. Here are some sample questions:

• What other departments are contributing budget dollars toward this project?

• In round numbers, what are you setting aside for this project?

• What will happen if our proposal comes in higher than that?

Or,

• Let’s suppose from a price standpoint we’re all in the same ballpark. How will your decision be determined?

• What happens if we come in over budget but you really like our solution?

The right questions can also identify early on who the players are, including the influential people, coaches, and the financial decision-maker. Here are some sample questions:

• When will an actual decision be made?

• When you’ve made decisions like this in the past, what did the process look like?

• When are you looking to have the software up and running?

• How will the decision be made? On what specific criteria will it be based?

A way to gain an introduction at the higher level is to ask questions that the prospect, based on his or her position within the organization, would not have the knowledge to answer and would logically have to refer you to someone on a higher level.

• What is the goal of the project?

• What is the impact to the organization overall?

• What specific outcomes will determine whether the project is successful?

• What outcomes will indicate that the project is not successful?

4. Work on your attitude. Position yourself as a partner as opposed to a vendor. Allow your prospects to feel in control and be part of the discovery process rather than feeling manipulated. Remember: collaboration versus manipulation.

To summarize, qualifying depends on three very basic premises:

• Will they buy? Is there a definite, quantifiable need and do you have buy-in from upper management?

• Will they buy now? Is there a sense of urgency?

• Will they buy from you? How are you positioned relative to the competition in terms of providing value?

Use these strategies to hone your skills in asking questions, qualifying buyers, and having the right attitude. These strategies will help you become more efficient and effective in your sales by saving you the time and effort of dealing with the wrong prospects.

Health insurance premiums increased at the slowest pace in eight years, marking the fourth consecutive year that saw fewer premium increases than in the past, according to a recent report.

Published by the Kaiser Family Foundation and Health Research and Educational Trust, the “Employer Health Benefits 2007 Annual Survey” found that health insurance premiums increased by 6.1 percent in 2007.

“Health insurance plans’ focus on prevention and wellness, disease management, tiered prescription drug plans, and other innovative tools continues to mitigate the rising cost of medical care,” said Karen Ignagni, president and CEO of America’s Health Insurance Plans.

A separate report credited tiered prescription drug formularies as a factor in the declining cost of medications.

We all know that there is nothing more frustrating than working in a field in which you have little to no interest whatsoever. If you are breaking into the insurance industry as a producer with this approach, you will find it particularly exasperating, not only because it may produce a lesser effort for the client, but also because the situation can be easily avoided. The answer is in niche marketing.

Niche marketing involves offering services in a specific field for which you have a strong background or affinity. For example, I started in the insurance industry in 1986 as a medical professional liability underwriter for hospitals, nursing homes, and other health care providers. When I switched to the insurance agency side in 1999, I was able to use my underwriting background to speak intelligently to someone such as a nursing home administrator and employ my knowledge in our discussion so that the customer would realize how much I knew about their industry. By gaining their trust with my knowledge, it increased my ability to secure their business.

How to find your niche
Suppose you do not know what niche to go after as a producer. If so, then research the possibilities using the following three questions:

1. What did you do before entering the insurance industry? If you worked in a specific industry such as hospitatality, construction, or retail, it might be worth your time to serve that niche as an insurance agent.

2. What are your hobbies or favorite pastimes? For example, if you like gardening, why not consider offering coverage to greenhouse operators? Most likely, you already speak their language and know what hazards they face and can apply them easily in your sales approach.

3. If you could do anything other than insurance, what would it be? Imagine your dream job, and the passion you have for it will translate into keeping your interest alive as you pursue and research that industry group.

Are there any fields which you should avoid picking as your niche? Yes — those that are technical in nature and those in which you have no expertise or background. Unless you have had some past experience in your life, avoid these industries when selecting your niche. Otherwise, the sky’s the limit.

Following through WITH your niche
Once you have selected your field of interest, check the Internet for associations close to home and join several of them. Get involved on boards and committees and start networking. Remember that with any association you join, the key goals are to be patient and persistent. Every group has a list of members — learn who they are by name and take time to get in front of them and introduce yourself as many times as you can, including by phone and email, but without asking them for the sale. You want to be known as a family member of the association, not as the pushy agent in the group. Timing is everything.

Besides participating in your business associations, attend industry trade shows and have a booth that will allow you to share your talent and information with others. Attend educational classes on insurance. You may be pleasantly surprised to find that you can extend your network through the people sitting right next to you in class. Write articles in newsletters and volunteer to speak at meetings on insurance-related topics that hit home for your specialized niche, and periodically send interesting articles to prospects so they see your name over and over.

All these efforts will increase your visibility as an expert on insurance-related issues for that niche. Therefore, when you call on prospective clients, chances are they will remember your name, which will increase your chances of making a sale. Once you write a handful of policies, you can use your clients as referrals to grow your book, and pretty soon they will be calling you. Patience and persistence are definite assets.

The great thing about our industry is that every business needs what you are selling — insurance. Without it, the business world as we know it would not operate properly. Be proud that you are in the insurance field, and show that pride by pursuing your favorite activities via niche marketing.

Marketing genius falls into the Thomas Edison model of “1 percent inspiration and 99 percent perspiration.” Far too often, good marketing is seen as something that only a chosen few can pull off well. Feeling at a loss, some agents take the “ignore it and it will go away” approach. When that happens, what tends to go away is the business.

Then there are those who have never differentiated between enjoying marketing and being good at marketing. They are marketing legends in their own minds, and the result is usually an ineffectual campaign. And let’s not overlook the ad of desperation. The “I have to get some money in now” approach tends to end up an expensive disaster that exacerbates rather than helps the financial crisis at hand.

There is a better way
Marketing is a job. Success ultimately comes from just doing the necessary work. So where does one go to start putting together a practical and profitable approach to marketing?

Your prospects know what they want
Begin by finding out what is important to your customers and prospects. Accurate information is the foundation of any solid marketing plan. Don’t assume you know what your market wants. Ask them. Pick up the phone. Have a discussion. Even better, invite a few key people over, order in pizza, and hold a roundtable discussion. This is an informal focus group, and it can be very effective.

Tag lines speak volumes
If you’ve done an adequate job of gathering information, you should have a pretty good idea of how to start massaging that information into a message. What do your clients and prospects want that you can do better than anyone else on the planet? If that doesn’t exist, develop it. Without differentiating your product or service, you may muddle along in business, but you won’t have the tools to accomplish much more than that.

Keep your message stated in the positive. It is proven that headlines offering assurances of success, hope, achievement, and possibility consistently outperform negative, fear-based headlines.

Get media savvy
You have your message. Now how do you plan to tell the world? Newspaper, broadcast, direct mail, or a combination of media are all viable options. Evaluate the demographics, costs, potential returns, and any other information for each potential medium. Call each medium’s other advertisers to see how it is working for them. The paradox is that you need to target your market as accurately as you can, but the only way to know how a specific market will respond to your message is to test.

To properly test your campaign, start out small. If you get a response, that response will most likely increase as you repeat your message and expand your audience. If you don’t get a suitable response, no matter how many times you repeat the message or how extensively you expand your exposure, your campaign is not going to be profitable.

Reality check
Here is a sobering fact: No prospect really cares about what you have to say, what you are selling, or even that you are in business. Anyone who even bothers to notice your message has only one objective: to justify not letting your message add to the clutter of their lives. What that translates into in the real world is this: You have less than four seconds to grab a prospect’s attention, and less than 20 seconds to get your message across. Yet the longer you can keep someone involved in your communication, the more likely they are to say “yes.”

There is no magic bullet. However, the more options you have, the more likely you are to succeed. Start by staying open to all possibilities. Broadcast ads are becoming more affordable to produce and to air. One secondary advantage is that many (but not all) radio and cable channels fill in unsold ad space by rerunning ads at no additional charge or at a greatly reduced price. The ad business is rapidly evolving. It pays to stay on top of current trends and be sure you are always working from facts, not assumptions.

Just as broadcast media needs to fill ad slots, print publications also have ad spaces to fill and often offer last-minute deals. In order to take advantage of these opportunities, you must have camera-ready material on hand. One area especially open for negotiation is the cost of adding color to your ad, and color is important since it is proven to increase your response rate.

Consider everything
If you are looking at newspapers, don’t overlook freestanding inserts. There is a reason why your newspaper is overflowing with ad inserts: They work. In one real-world experience, a small postcard-sized insert was distributed to approximately 18,000 people per week in a rotating market identified by ZIP code. The same exact piece was blown up to a half-page ad, printed in a newspaper, and distributed to over 200,000 people. The freestanding insert consistently pulled just shy of 1 percent for weeks. The same ad printed in the newspaper netted one phone call and not a single sale.

Direct mail is powerful if done well. The two most important components of a successful direct mail promotion are the ability to identify your market and the ability to write, or find someone who can write, killer copy.

Don’t overlook the importance of design in your printed materials. Design is critical to your success. It leads the eye to your copy, the next page, and the response device. Work with a designer who knows how to make design work for you. The fonts used can either enhance or prevent readability. That one component, readability, can mean a response difference of up to 25 percent.

What next?
Work from the big picture. What is your follow up? Marketing is not a series of single events. There needs to be continuity in your message and your look. It is generally accepted that a prospect must see your company’s name three times before they even remember you exist. Without continuity, each exposure essentially becomes a first look. That can result in scores of exposures and untold amounts of money wasted before anyone even remembers who you are, much less decides you are worth investing in.

Meeting the marketing challenge is not for the faint of heart. You will make mistakes. There is no such thing as perfect. Profitable is good enough. With planning, research, and ingenuity, you will no longer see marketing as dreaded overhead. Instead, you will find yourself reveling in the returns you are enjoying from your marketing investment.

Mitzi Crall, Ph.D. is a sales

Keeping the pipeline well stocked with new prospects and new opportunities is a critical prerequisite for sales success in the insurance world. For many producers, it means spending a substantial amount of time on the phone, cold calling prospects who may not even want to talk. This activity can be, at best, a necessary evil they would gladly trade for more time spent with their clients.

For a few exceptional producers, a well-stocked pipeline is a reality. They have been able to achieve a continuous, seemingly effortless flow of new prospects and clients, all while spending less time on cold calls. In fact, when they are on the phone, they are usually talking to qualified prospects who want to take their calls or, at the very least, finding themselves engaged in very intriguing conversations.

What is their secret? They have the ability to get a high percentage of their business from client and prospect referrals.

Making a simple request for referrals is one of the most commonly recommended and frequently neglected strategies for building business. Though a referral conversation is one of the most important conversations an agent can have, most pay little attention to it and miss valuable opportunities.

Often, agents find that their requests for referrals fail to yield good results, even from satisfied clients who are willing to give them a lead. Most do not consider the possibility of asking prospects for referrals, even prospects who turn out not to be good candidates for quality business.

Let’s take a look at why so many requests for referrals produce so few useful results, and how it is possible to have profitable referral conversations with both clients and prospects.

What you’re doing wrong
For starters, when agents do ask for a referral, they often simply ask for a name: “Do you know anyone else who would be interested in speaking with me about their financial plan?” or worse, “Do you know anyone else who is thinking of purchasing a life insurance policy?” If you put yourself in the position of a client or prospect who is being asked for referrals, it’s obvious that this is not really such a simple request. In order to respond properly, the client or prospect must think of another person and their business situation, guess that person’s potential level of interest, and predict whether the individual might buy — especially from this particular agent. No one wants to lose respect from a peer by sending them an insurance producer who will intrude on their valuable time. The potential risk to your client is that you will act in a less-than-professional manner and won’t have a sound business case for being there in the first place.

Insurance agents might not think they have asked for all that analysis, but the truth is, that’s exactly what they are asking a client or prospect to do. If people don’t thoroughly think through all these issues, they may fail at providing a referral, or else the referral will fail to provide results. Consider the typical responses to a referral request, which often sounds something like, “Not off the top of my head, but if I think of anyone, I’ll let you know,” or, “I’m not sure I can give you a name right now, but I’ll keep it in mind.” At some level, clients realize that your request for a referral is poorly defined, unrealistic, and carries a high risk of failure.

How to do it right
So let’s go back to those successful agents and consider a very different, yet exceptional, approach. The secret is in knowing when to ask for the referral and what to ask for. In the case of a client, the “when” is logically right after you’ve delivered your product, service, or solution and your client is experiencing the value they were expecting. At this point, your client should have a clear awareness of the value delivered and will have a correspondingly high sense of satisfaction. For a prospect, the “when” is the point in your diagnosis at which you realize they aren’t experiencing the issues you are able to address and you’ve suggested that they may not require your solution.

The “what” should focus on recognizing symptoms or indicators of issues similar to the ones you have been discussing or which you have helped your customer resolve. The questions you might ask include, “Have you heard others in your company talk about experiencing insurance coverage problems similar to those you are experiencing?” or, “When you speak with your friends or family members, does the issue of appropriately
funding a retirement ever come up, and if so, does it ever seem to be a pressing concern?”
When you ask the question this way, you are not asking the client to take a risk. Rather, you are asking them for a factual observation that does not require them to qualify and pre-sell the referral. You’re simply asking if they know of someone who has the same problems with which they presented you. When they do give you a referral, it’s your job to determine if the symptoms exist and if you can help provide a solution.

By using this approach, you are using processes and skills that are very similar to those of a doctor. In our research, we’ve found that the characteristics of an exceptional agent are similar to those of a good physician. Using this analogy, it is easier to understand why even a prospect might respond favorably if your request for a referral follows a thorough and professional diagnosis, even in those cases where you discovered the prospect didn’t need your product or services. Think about whether you might refer a friend to a doctor who made a great diagnosis and found that you did not need surgery after all, or uncovered an issue that is of great concern and is detrimental to your well-being.

When you take the time to conduct a careful diagnosis of a financial situation, both clients and prospects recognize that they are receiving value from the substance and style of your communication. They are far more likely to share names and will be confident that their peers and colleagues will not be subjected to a hard sales pitch. These names will also have a much greater probability of being the high-quality leads you need to create a rich pipeline and to expand a profitable portfolio of insurance business.

Clients and prospects constantly need to be educated so they know and understand the value of your products, services, or practice. Plus, they need to know exactly what to do with this information, or they may never figure out what you want them to do.

Even you are great at your business and love what you do, if your clients don’t know about your enthusiasm, you’ll never reach the sales volume that you dream about.

You sell insurance. All of the details about what type of insurance you sell, who needs it, and why prospects and clients should listen to you should be included in all of your advertising and promotional material. You should have handy a report or booklet on how to save on insurance costs — one that could be used in a variety of marketing efforts — that you offer to clients for free.

In other words, teach your customer about your products and your firm. Teach them about your insurance offerings in general and how these products would be useful to them. You can even expand your educational efforts to include information on related subjects.

One of the most unfortunate marketing mistakes that agents make far too often is failing to let their customers know what is unique about their products or services.

If you are an independent agent and have looked at 10, 25, or even 50 insurance carriers, let your clients know this. They’ll be impressed that you’ve investigated and eliminated those carriers that don’t provide the value, support, service, or dependability you know your clients want and need.

What if your offerings solve three times as many problems as your competitors’ offerings? Your customer won’t know this unless you point it out to them.

Few businesses realize that, in addition to educating your customer, you must lead them to action — this is the key to successful marketing.

People need to be told exactly what to do to in order to fully benefit from your offerings. Therefore, every sales call, marketing campaign, or personal contact should make your case.

The average consumer wants and needs to be led. They want to know more about the products and services they are interested in, but will procrastinate if you don’t motivate them to move forward and make a purchase.

As you educate your customers and tell them how to buy your offerings, you’ll find much success.

Nearly 70 million Americans have used discount generic prescription drug programs offered at major retail stores across the country, say researchers with the University of Michigan C.S. Mott Children’s Hospital National Poll on Children’s Health.

But in a recent report, the National Poll on Children’s Health reveals it’s not just the millions of uninsured U.S. adults and children who retail stores claim the programs were intended to aid that are taking advantage of lower-priced prescription generic drugs — 47 percent of adults and 51 percent of children using these programs have private insurance.

While uninsured adults and children have used these programs at higher rates than privately insured Americans, the poll shows that they represent only a fraction of program users. In fact, only 17 percent of adults and 9 percent of children who use discount generic prescription drug programs are uninsured.

“The prices of prescription medications have reached a point now that we’re seeing individuals from all insurance and income groups looking for lower-priced options,” says Matthew M. Davis, M.D., M.A.P.P., director of the National Poll on Children’s Health.

“While these programs are reaching the uninsured, privately insured Americans still make up the largest group of adults and children using discount prescription drug programs, simply because there are a larger number of people in the U.S. with insurance coverage,” Davis added.

The National Poll on Children’s Health also found discount generic prescription drug programs are more likely to be used by adults with heart disease. However, adults with other chronic illnesses and children with chronic conditions use the discount programs at the same rate as patients without chronic illnesses. Of those polled, 25 percent with chronic illnesses report they did not use a discount generic prescription drug program because their medications are not available through these programs.