InsuranceNewsNet Magazine November 2011 : Page 21

THE PSYCHOLOgY OF THE LIFE INSURANCE BUYER | FEATURE about their life insurance shopping experiences, including their experiences with advisors. The shoppers included both buyers and non-buyers from all age groups and income categories. The data include a number of other important findings for producers. One of them underscores how critical it can be to have face-to-face meetings with clients. The Relationship Advantage Further reinforcement comes from yet another key finding. This came when the researchers asked shoppers whether they had a previous relationship with the advisor or a referral to the advisor. (A previous relationship was defined as the advisor being the shopper’s pri-mary financial advisor or someone from whom the shopper had purchased finan-cial products in the past.) Over 70 percent of all shoppers who had met face-to-face with their advisors said they did have a previous relationship with, or a referral to, the advisor—and over 70 percent of those shoppers did buy life insurance. On the other hand, sales were “less likely” if the prospect was a stranger and had no previous relationship, says Silverhart. Life insurance shoppers apparently also like the way that their advisors educated them about life insurance. More than 80 percent of those who met with a rep said the reps were knowledgeable, provided good infor-mation about the policy and described what the policy would do. “We con-sider that to be a very good percent-age,” says Silverhart. What’s more, 75 percent said the rep with whom they met was someone they could trust, and 70 percent thought the reps had their best interests in mind. Altogether, the shoppers were “very positive” about their advisors most of the time, Silverhart concludes. The Face-to-Face Advantage Among all shoppers, 37 percent said they had participated in a face-to-face meeting their sales rep or financial advisor. The eye-popper is that fully 73 percent of those people bought life insurance. What’s more, the advisors’ efforts to reach out to people via phone and mail seem to have had nearly as strong a cor-relation with insurance purchases. For example, 30 percent of all shop-pers said they had talked with their rep or advisor on the phone, and 65 per-cent of those people bought life insur-ance. Likewise, 30 percent of all shop-pers said they had received information in the mail from the rep or advisor, and 63 percent of those people made a life insurance purchase. Much has been written about the potential for mass life insurance sales via online outlets. The new data sug-gest this is not as widespread as some would believe. The researchers found that only 24 percent of all shoppers reported hav-ing received life insurance information from an online source—and only 50 percent of those shoppers ended up buy-ing life insurance, a significantly lower percentage than buyers who had a face-to-face with an advisor. Moreover, when LIMRA asked shop-pers to name their most helpful shop-ping activity, 63 percent mentioned all those personal contacts with the advi-sor—the face-to-face meetings, phone conversations and mailed information. Only 15 percent named “information received from online.” “All of this reinforces the importance of advisors having a personal relation-ship with the customer,” says Silverhart. explains. In addition, 28 percent complained the sales rep did not take into consid-eration what the shopper could afford; 28 percent said the rep tried to pres-sure them into buying; and 27 percent said the rep concentrated on selling to just one person (in cases where both spouses were in the meeting, for instance). Another finding has to do with the touchy area of asking for referrals. Sales “Producers who recommend specific amounts of insurance to clients can sell more than 60 percent more coverage than those who don’t.” reps are sometimes reluctant to ask for a referral because they think it may be viewed negatively by the client, having a negative impact on closing the sale, says the LIMRA study. Yet the data show that satisfied cus-tomers are often glad to help, Silver-hart says. In fact, 22 percent of shop-pers who met with an advisor said they were asked for referrals and that they complied by providing one or more. Also worth noting is that 81 percent of these shoppers did buy life insurance. But 28 percent of those who met with an advisor said they were not asked for a referral but would have provided one if they had been asked. That’s a “sizeable proportion” of buyers who would give referrals, Silverhart says. Not insigni-ficantly, 78 percent of these buyers did purchase life insurance and 32 percent rated their rep as “someone I could trust.” In view of the findings on referrals, Silverhart concludes that not request-ing a referral is “leaving money on the table.” Not asking for referrals also makes sales growth more difficult than it needs to be. “The reason most producers fail is that they run out of people to whom they can sell,” he observes. And because November 2011 InsuranceNewsNet Magazine 21 Wake-up Calls Although that is very good news for pro-ducers, the LIMRA findings had some wake-up calls for them, too. One realization concerns the failure of producers to follow up with the cli-ent. “Thirty-five percent of prospects who met with a sales rep thought the rep should have contacted them again,” says Silverhart. They were still decid-ing about whether, and what, to buy but the advisor never got back to them, he

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