Strictly Sales: Know Your Prospects and Establish the Rules

Have you ever looked at your prospect list and asked yourself: Why are all these names still on there? How long have these names been on there? What can I do to get them off this list? As we take a serious look at our prospect lists, it's obvious that they remain on the list for two primary reasons: Either they are yet to be qualified, or we simply haven't presented an overwhelming case for the buyer to do business with us.

Let's break these two down.
Look at the lists and determine how many of the prospects you have yet to present to. We will start with those. Let's begin by asking some basic prequalifying questions.
1. Are these prospects the size accounts we are targeting (number of autos, number of employees, annual sales, payroll, geographic location, SIC code, etc.)?
2. Have we matched these lists to our carriers' appetite guide to assure we have two or three carriers that have a solid interest in these accounts?
3. Have we checked with our carriers to determine what they know about any of these accounts and begin to build synergy?
4. Do we have any current clients we could use as a reference or referral to open one of these doors for us?
5. Have we developed a series of postcards and letters as a brand marketing campaign to soften up these prospects to recognize our name and build our brand with them?
Now that we have gone through these questions and this process, we are ready to approach the lists and begin to secure our diagnostic appointment, which is based on the ex-date in order to prequalify the prospect a second time. Remember, we are performing a diagnostic-based sales process which has a series of steps before any review of current coverages or quoting. Do you want to secure your 75 percent failure rate (national average is 25 percent close ratio in commercial insurance)? Just quote business early and we can assure you of long-term failure!
Once we have prequalified the lists, we are ready to conduct outbound calls and visits supported by our marketing campaign. "Prequalifying II" begins with a half-hour visit based on the expiration date to inquire about five specific areas. During this interview, we are looking for a number of things:
1. Do I, as an individual or combined with my references, have the rapport I need (which results in trust and a positive relationship) to move forward? If not, maybe we should spend the first year building the relationship and do not actually present this risk until we have developed the rapport. This takes courage; remember, we don't present until we have issues to solve!
2. Do we clearly understand the buyer's values? Each of us has a value system that drives our decision process. It is less important that we impose our values on the buyer (which if you do, guarantees you drive the buyer toward price, which is a frequent and crucial mistake in selling). Some buyers are young and/or new in their business careers and they are driven by survival (price). Other buyers are more mature in their business and personal lives and look to protect what they have accumulated with the proper type and amount of coverage.
Another type of value centers around relationships. We love doing business with our friends. There are always those prospects that have had horrible experiences from prior agencies and companies and they want to be assured of outstanding service in the future.
If you don't take the time to evaluate where your buyer stands, you'll probably have a 75 percent chance of losing the sale early on because your values and the buyer's don't align.
3. What is the prospect's relationship with their current agent? Are there problems or issues we can solve? We need to understand the current relationship because that one item gets in our way of success as many times as anything else. Are they willing to sever that relationship? If not, you're wasting your time.
A second consideration is the competition. Which agencies are looking to write the account? We need to know we have access to the tools (carriers) we need for the account. If you're one of 10 agencies looking to write the account, you'd be better off moving on. What is the prospect's current relationship and what specifically do we need to do to cause them to re-evaluate their current situation and switch to your agency? If you cannot present an overwhelming case for them to make the change, the close ratio percentage drops considerably.
4. Are there any pains or issues the prospects have that we can create some value in and solve? If we have no issues (coverage, service, relationship) to solve, the only item left to present is price. Uneducated sellers call this a quote! They manage their lives in a worthless action called quoting, which usually has a failure rate of 75 percent or higher because they refuse to take life seriously and follow a process. You will see these producers moving at breakneck speed through the countryside, as busy as can be. They make great "pavers" on the road to success. If there are no issues, move on; it's a price-driven sale that makes it that much harder to re-quote next year and win!
5. Now that we have something to work on, we need a common understanding of how this will work. Ask the question: "If we can solve the issues we have identified here this afternoon, is there anything that you could imagine that would prohibit you from changing agents and placing your insurance with us?" We need to have some rules of engagement or understanding of how this will play out. Once we have these, we are ready to look at policies and from there create a presentation of solutions.
The rules of engagement
Let's now go back and look at those accounts on our prospect lists that we presented to over the past few years, but didn't write the account. Again, we need to go through this list carefully. We have probably built some rapport and trust and, assuming that you know ample facts about these risks, if they passed the first prequalification, we need to begin with a second prequalification. Carefully ask yourself each question about each prospect. What you'll probably find is that you had some type of relationship, sometimes built at the same time as providing a worthless quote.
One rule that is very important to live by is that we need to keep our sales process in a diagnostic, questioning format. Your new rule to live by is: "We can never offer a solution during our presentation that we didn't identify and create value for during our diagnostics." If we make a vital error of neglecting the prospect's needs, we immediately show the buyer their values don't matter, and they become defensive and begin to compare price. The question for you here is, "How do we get away from the price-driven sale?" Find out your prospect's needs and problems and offer solutions.
Now that we have taken a strong look at our potential revenue stream called our prospect lists, we need to identify how to proceed. It doesn't matter whether you are a producer or an agency owner; you need to spend some time considering the following rules. Here are the new agency rules of engagement:
o The prospect can only answer questions that were asked.
o The prospect requires diagnosis first.
o We need to feel emotion from the prospect--their needs and desires.
o No one likes change, so it needs to be managed for the prospect.
o Buying requires a change of agent, insurance company, etc.
o All these sales steps are part of a consistent, logical process.
This is part one of a two-part series. Next month I'll follow up with the six crucial action steps. Your comments and communication are welcome to Tom at tomb@siaa.net.
Tom Barrett is president of the Midwest and Southeast regions of SIAA Inc., with a partnering of 2,550 agencies. SIAA uses the Dynamics of Selling process to increase new business in 2008. Tom also serves on the National Faculty for Dynamics of Selling and Dynamics of Company Agency Relations. For more information on these Dynamics programs, call 800-633-2165 or go to www.TheNationalAlliance.com.