By Ray C. Dreher
From AA&B December 1931
One of the weakest excuses ever used for taking things easy and not going aggressively after new customers and selling new and important coverages to old policyholders is "What's the use when you can't collect the premium?"
Granted that money is not plentiful - people still will buy, and find the money to pay for any product or service which is a necessity and whose price is right. There is nothing of greater necessity to the property owner at this time than dependable insurance which will guarantee him against pleasant feeling of security. Thus the reason that most men give for not buying insurance - lack of ready cash - becomes the very reason for purchasing insurance.
Experience has shown that new customers can be secured and old customers sold additional insurance and premium collected - many times on the delivery of the policy - if the local agent is sold thoroughly on the value of insurance and the intense need for it at this time. Hundreds of agents are proving this statement every day.
Thus we find that if a policy is thoroughly sold - if the assured has a crystal-clear impression of its benefits and has decided that he wants it - there is little trouble in collecting the premium. The sensible man would rather curtail on something else then run the risk of a large loss which might result in the crashing down of his financial structure - ruining his future happiness.
Experience has also proved that the longer the delay between the delivery of the policy and the attempt to collect, the harder it is to get the money. The time to start collecting is when you deliver the policy because most policyholders expect to pay at the time. After the assured has checked the policy, hand him the bill. Another way, which is successfully used by some agents, is to deliberately pin the bill to the policy forcing the client to unpin the bill or lift it up to read what is underneath. Either of these ways calls attention to the bill, suggesting payment for the policy. Never fold the bill in the policy. It may be overlooked. If the assured does not comment on the bill, ask him how he wishes to pay for the policy. Many agents hesitate to do this for fear of antagonizing the assured and perhaps having the policy returned. Any agent who has thoroughly sold the assured on the need of the insurance and who offers a real and worthwhile insurance service has no fear of this.
It is easier to collect the premium at the delivery of the policy because the assured realizes sharply the need of the insurance and thinks well of his business sagacity in buying the policy. But will he feel the same way sixty or ninety days hence? Psychologists say "No" unless he is again resold on the value of insurance. These students of the human mind have arrived at certain definite laws in regard to memory. Tests have shown that of what the average man sees, reads, or hears, he will remember eighty percent in two days, forty-eight percent in five days, and but eighteen percent in the forty days. Is it any wonder that some policyholders are reluctant to pay in sixty days when they have forgotten most of the good points about the policy?
Any local agent who delays collections for sixty days for fear of antagonizing the policyholders or having the policy returned is injuring his own business, because the time which should be devoted to going after new vantages of an adequate sales-promotion plan of control should not be over looked by the progressive agent.
Modern systems and equipment do not mean "red tape" but reflect efficient management which produces greater profits from present volume and produces extra volume at a moderate sales cost.
A purchasing agent enumerates several reasons why salesmen are not as efficient as they could be, all of them little things and yet they are big enough to kill important sales. "I like to do business," he says, "with the fellow who informs himself sufficiently about my business and about his own business that he can tell me exactly what he has that I can use without wasting my time or his. Finally I like to receive the salesman who acts in my office as he would if he and his wife were calling on me and my wife in our home." - "Nation's Business."
