Ask any independent producer and they will tell you: Prospecting, selling and closing are difficult. That's why not just anyone can succeed in this business, for it is one that many enter without formal training and are left to sink or swim during those first few years with little guidance or support. NU spoke with three veteran producers to get 10 solid ideas on how to sell better, from finding new business, to presenting to clients, to saving deals about to go sideways.
Floyd Mays is a past president of the Professional Insurance Agents of Virginia and D.C. and is hailed by his colleagues as a natural salesman. The Floyd Mays Insurance Agency, based in Richmond, Va., has offered coverage for the automotive and transportation industries—tow trucks, in particular—since 1977.
Steve Ruchman spent decades in the insurance business as a producer, specializing in sales to the garment manufacturing industry in New York City. These days, he is retired and living on Long Island, N.Y. He still serves on the board of PIA Management Services Inc.
Susan Coffin was a P&C producer for 23 years until she sold her practice, Coffin Associates, in 2014. During that time, she specialized in selling fine arts coverage, commercial and industrial risks. Today, she is an independent insurance claims consultant based in Bethlehem, Pa.
1. Even your worst criticism is a sales opening. (Prospecting)
Every producer has encountered prospects that are not exactly keen on being sold, but some will be outright hostile toward you, says Floyd Mays. He recalls one cold call he made on a tough prospect who told him, “All you insurance guys are the same. You’re a bunch of liars and thieves who are looking for somebody to screw over.” Floyd could have gotten offended and walked. Instead, he said, “Somebody has been screwing you over for years. Why not give me a chance?” It gave his client a good laugh and began a business relationship that lasted for years.
2. A little theatrics can go a long way. (Prospecting)
Insurance is an intangible product, and it requires some kind of illustration of what it actually does to make some clients understand why they should buy it. When Steve Ruchman was first getting started, disability income insurance was a new product, and people got paid in pay envelopes, rather than with direct deposit. So Steve acquired 100 blank pay envelopes and attached them to each of his sales letters he sent to his clients, asking them: What would happen if this pay envelope stopped arriving? Suddenly those prospects could imagine their paycheck not coming in, and for a young kid who never sold a disability policy, Steve found himself with a flood of new business. Theatrical, to be sure—but it worked.
3. There is gold in the clients you already have. (Prospecting)
Sometimes, the most efficient prospecting comes from expanding the business you have with existing clients. “You would be surprised at how many people don't do this as much as they should,” says Susan Coffin. “There could be a client who, for some reason, chose not to do business with you but now they might want to go back to you. It could mean that your client has changed, or that their needs have changed, and you need to revisit that.” She recalls a large manufacturing firm she had for a client who preferred to rely on the insurance provided by their freight forwarder. “Getting money out of a claim for freight forwarding when you have no pull is almost impossible,” she says. “So I went to my client and I convinced them to give me the policy instead. That was a sale. That was a policy I didn't have before.”
4. People will not buy what they don't understand. (Sales)
Price is a great way to get a client's attention, but it is not the only thing on which they will buy. If clients don't understand the value of the product, the sell is a no-go, which makes client education a must. That can be easier said than done, however. Mays recalls a client whom he simply could not sell, and could not understand why, as he had a great product his client needed. The problem was, he realized, was that the client couldn't read. Once Mays read the product details to him, the client signed, and stayed with him ever since. That was 25 years ago.
5. The client can't buy if the client doesn't comprehend their risk. (Sales)
Some clients either lose control of their insurance programs, or they never fully understood their needs in the first place. In such situations, selling on price is pointless, because what they need is a strategy for managing their risk. Mays recalls one large account for which he was presenting for the first time after prospecting it for years. When he arrived at the meeting, he had an incomplete quote on hand, but it was the best he had. He never took it out of his briefcase, because it soon became clear that the client had no idea what its insurance needs are or how to address them. The sale became all about helping the client manage its risk. Price became secondary, and Mays never even tried to sell on it. When he landed the account, it was for well more than what his initial quote would have been.
6. Know how valuable your own time is. (Sales)
The average producer loses 10% to 15% of his or her business every year just through attrition, so they need to bring in at least that much new business every year to break even. Make the best use out of the time you have to develop the business you need. Ruchman recalls one client he visited in New York City's garment industry, which is filled with no-nonsense characters. The client made him wait in the lobby for 90 minutes, and when they did meet, he brusquely brushed the agent off, assuming he was there to sell garment inventory. “You’re a schmuck,” Ruchman told the client, and walked out. The client was offended, but Ruchman knew that his time was too valuable to be wasted, especially from a client who couldn't give him even the most cursory attention. “About three years later, I picked up this guy's P&C business,” says Ruchman. “He was still embarrassed over it. He knew what he did. But it was all right. I got the account.”
7. Don't just protect your client, protect your contact. (Sales)
Sometimes, buying coverage isn't just about protecting your business: It's about protecting yourself. This gives you a huge advantage not just in serving your client better, but building the kind of relationship where your services become invaluable.
Coffin used to handle Boston's Isabella Stewart Gardner Museum for art theft, where the museum typically only insured its temporary collections and items on loan. In 1990, thieves stole paintings worth $500 million from the museum's permanent collection in the largest personal property heist ever, and the museum had declined to insure any of them. Coffin knows because she tried unsuccessfully to get the museum to cover them just months before the theft.
“I literally fell out of my bed and rushed downtown to my office to make sure that the notes and the copies of my proposal were in my file,” she says. “Otherwise, we could have been exposed to huge lawsuits for failing to sell the museum the coverage they needed.” After the theft, she convinced the museum to insure its permanent collection, explaining that even if they could not ever replace lost paintings, claims could help renovate damages to the facility, to damaged paintings to even pay a ransom, should thieves “kidnap” artwork.
Having that coverage also protects the leadership of the museum, who might be seen as negligent for insufficiently protecting the museum. “When talking to CFOs or executive directors, I tell them I am not just protecting your firm, I am protecting you,” Coffin says. “You will never lose your job because of me. You have to make it personal. Every sale is personal.”
8. The customer isn't always right. (Closing)
The responsible producer is not just pushing product; he or she is helping a client identify their risk needs and provides solutions for them. Those needs and solutions might fall outside of what the client wants to discuss, which puts the producer in the uncomfortable position of arguing with the client.
Mays recalls when he made his initial presentation to his first really big client. The owner called for quotes on the values in his current coverage, which was a mess. The values had changed and the buildings and their contents were underinsured, so Mays changed the policy accordingly in his presentation. “I told you I wanted an apples-to-apples quote,” the business owner snapped. “But the apples you have are the wrong apples,” Mays replied. “I’m using the right apples.” When the owner refused to budge, Mays prepared to leave the table entirely. Only then did the client ask Mays to come back, and ultimately he bought the coverage that had been suggested.
9. Sometimes, it pays to walk. (Closing)
No client relationship is immune to being overturned, and sometimes that involves outside consultants or other producers being brought in to scrutinize the business you have already put into place. It can be an uncomfortable situation, and sometimes, fighting to keep the business is a lost cause. The smart play is to position yourself to reclaim the business once it suffers for not having you to oversee it.
Ruchman recalls a large client he had in the garment industry where this very thing occurred, and an external consultant completely blew up the insurance program the producer had worked on with his client for 12 years. Rather than fight, Ruchman resigned from the account. “When the consultant screws everything up, I’ll be back,” Ruchman told his client. “And guess what? Two years later, I had the account back.”
10. Never lose your poker face. (Closing)
At some point in every producer's career, a client will put an account out for bid, and you’ll find yourself trying to outbid business without enough information or time to do it properly. It is a strong-arm tactic that clients sometimes use to put their agents or brokers on the back foot, and it can be rattling.
Coffin recalls an incident in which a longtime client did this to her, and she not only had 24 hours to match or beat her competition's premiums, the client blacked the premiums out on the proposal so she couldn't know what to beat. As she puzzled over this, she held up the proposal to the light, and could see through the black ink to the competition's number: $536,241. She revised her own proposal down to $536,000 and told the client she wanted them to have “$241 in wiggle room.”
She kept the account, but the client's CFO asked her how she knew what the other number was. “I just told him that it was my job to know what that number is,” Coffin says. “Sometimes, holding on to an account just comes down to luck. But everybody has been in that situation. Everybody.”