How Well Does Your Company Help Salespeople Sell?
I’m on a quick trip up to New Jersey and back, but wanted to get this story off to you.
If you’ve been a salesperson, you’ve felt the pressure of needing to get customers to buy. You’ve also known the frustration of not having the knowledge, resources, time, or the tools to do the job properly. If you’ve been a sales manager, you may have tried to get your company to invest in some of those resources and tools. However, you probably had a hard time “proving” the value of those tools in the end.
I had an opportunity to see this problem (and its solution) recently from a customer’s perspective, and you have too. I needed term life insurance. If you are like me, you don’t enjoy the act of buying this product. I just wanted to make a decision and get on with it. (Note: The story I’m about to tell you may not be representative or typical of the ordinary transaction.)
The Mirage of “Certification"
I had been working with Ralph (not his real name), a “Certified Financial Planner” here in Atlanta. Ralph’s recommendation (consistent with his “highest death benefit for the lowest premium” philosophy) was a policy from Protective Life, a traditional carrier offering commodity insurance products. I wanted a level term policy so the premiums would not increase for the next ten or twenty years. Ralph pointed out that I could convert the policy to a permanent insurance product (meaning I could buy an “upgrade” to the kind of policy that remains in force after the premiums are “paid off”).
Within a few days, I received a call from my Northwestern Mutual agent, Carl (also not his real name). I’ve owned some insurance from Northwestern for more than 20 years, and the new policy I was looking at would replace one of them. “I see you are looking at another company’s life insurance product,” he said. “Why didn’t you call me to discuss it first?”
Now, I’ve known Carl for a long time. I have no reason to distrust him, I’m just indifferent. I rarely talked to him over the years. Usually, it was when I called to borrow money against some of the other policies I owned (where that was allowed). Carl was always trying to get me not to borrow, but to spend (save) on new policies instead.
Northwestern Mutual, is on the opposite end of the value spectrum from Protective Life. (I’m not knocking it, just comparing and contrasting.) Northwestern is noted whole life, which costs more, but accumulates cash value. In the end you’re supposed to come out way ahead. Northwestern is the only remaining “mutual insurance company,” meaning that the policy holders are also stock holders. This supposedly increases financial returns on their products.
These Guys Don’t Like Each Other!
To put it kindly, Northwestern (and other companies like it) are generally ridiculed by most of their competitors, who sell the commodity-type product. I naturally assumed Northwestern’s term life products would be far more expensive than anyone else’s. Because I was not interested in cash value, but only death benefit at this point, Ralph, acting as my “Certified Financial Planner” agreed, so we hadn’t bothered to talk to Northwestern.
Carl, naturally, had different ideas. He insisted that he could be competitive on term policies and asked for the opportunity to quote. I reluctantly agreed.
In the end, I was very glad I made this decision.
The Race Was On
Soon I had two virtually identical term life quotes in hand (contrary to Ralph’s prediction). The difference, Carl claimed, was in the kind of policies each was upgradeable to. Deciding that such an event was a possibility, I asked both fellows to quote the upgrade for me.
Thus I began an unpleasant journey through a mare’s nest of terminology about investment projections, preforms, disclaimers, death benefits, cash values, and mudslinging. Ralph claimed all sorts of disadvantages about Northwestern (old outdated product, you can do much better investing money somewhere else, way too expensive for what you get, etc.). Carl, for his part, claimed that there wasn’t much difference between the two term policies, but there was a dramatic difference in what you could upgrade to.
Both individuals are supposed to be professionals, yet no matter how I tried, I couldn’t connect the terms and words from Ralph’s world to those of Carl’s. Ralph reminded me again of his objective status, as “Certified Financial Planner,” so I decided to take him up on his claim.
“Ralph,” I said, “you are claiming Carl’ proposal is not worth the paper it is printed on, yet I have no reason to believe the fellow is lying (heck, he’d had the same job for twenty years!). I’d like to pay you a professional fee to get on the phone with Carl and me and define our terms so we can get to the bottom of this.”
To my surprise, Carl refused!
“Mike, there is no more information you need to know. It is right there. He is telling you a load of crap, and you ought to report him to the Insurance Commissioner. I don’t want any part of it.”
Dealing with the FUD Factor
Since I trusted Ralph too I was perplexed, to say the least. The FUD Factor at its finest (“Fear, Uncertainty, and Doubt”) was at work. All good salespeople know and use the FUD Factor, right?
I looked on Google for scams (searches for things like “Protective Life Sucks” or “Northwestern Mutual Scam”). The search turned up nothing. I searched also for investment comparison results using terms like “Northwestern Mutual as an investment,” and “Northwestern Mutual comparison.” Oddly, I came up with almost nothing. I found only a few things published by employees of Northwestern itself. I could find no third-party corroborating evidence of Northwestern’s superior policy investment performance. That surprised me.
Why were there being no consumer-oriented articles from investment advisors objectively comparing the performance of financial instruments from such well-known companies?
Finding Something Believable
So, I went on Google again to look for an honest-to-god life insurance consultant (who really does not get paid by insurance companies) and found one: www.glenndaily.com. Glenn is paid by individuals and corporations to work through this sort of problem. I got on the phone with him and was immediately impressed.
Glenn didn’t just take my money, he screened me first, making sure he understood me, my situation, and exactly what I was trying to do. He walked me through an automated database comparing all the policies from ALL the life insurance carriers (Sheesh, what a total commodity that stuff seems to be!). Then he started naming specific information, dates, companies, and lots of other evidence corroborating the claims Carl had made. This was the proof I needed to make my decision. It was evidence I could not find on my own.
Glenn Daily solved my problem in a way that Carl, the agent, could not, because 1) Carl didn’t have it, and 2) Carl was an interested party. In the end, I decided to buy the Northwestern policy. But the decision was at a far greater expense in aggravation and time than it should have been. (I’m not saying you should make this same decision, by the way. Your circumstances could be different. I’m saying that the two sales people did not – heck they could not – do their jobs. Their companies did not set them up to win.)
Let me focus on Northwestern, because I know them a bit better (though I’m no expert). From my perspective, Northwestern’s sales and marketing is stuck in the Dark Ages. From what I can see, they have not challenged their views about the role of their “vaunted sales force.” After all, these fellows are paid the highest commissions in the industry.
Now, from talking to Carl, I’m pretty sure most of those agents would gladly give up some commission if only they had an easier time of finding, winning, and keeping their customers! (to win my business, he had to discount the maximum amount, which came out of his commissions. He had to work really hard, spend more time trying to win my business. But he was at a tremendous disadvantage (in my case) without some kind of credible, third party corroborating evidence.
What could Northwestern Mutual do? Here are just a tiny fraction of the possibilities:
“Reason to Believe”
I bet there are fifty individuals going through my exact problem at any given time in North America. They have life insurance salespeople duking it out over what they should buy. Neither salesperson has much in the way of believable third-party evidence supporting their claims. Some salespeople are positively misinformed.
Why doesn’t Northwestern provide more reasons to believe, in the form of third-party evidence, examples, case histories, and industry spokesmen? They could, for example:
- Hire a group of fellows like Glenn Daily to develop a series of informational articles along the lines of “The four biggest myths in the life insurance business” or “Six things to watch out for when buying term insurance for your small company employees.” I would have read such material closely.
- Why not educate some of the more popular investment advisors about Northwestern’s true value proposition and track record? Some of them might see it as an opportunity to garner additional market attention by going against the “traditional” mindset that all whole life insurance is a bad investment.
- Become involved with whoever “certifies” industry financial planners and make sure they have at least some understanding of the differences between Northwestern (and the like) and other carriers.
How to Turn Your Sales and Marketing
Into a Lean Six Sigma Production Machine
That Runs Like Clockwork
(And Do It in a Way
Your Salespeople Will Love!)
Over the years, poor Carl had little to offer me but a lame newsletter (written by his corporate headquarters) and his creativity in striking up conversations with me. In that time I’ve gone to several financial or retirement planning seminars. Yet Northwestern never contacted me to help educate me, and they were never mentioned in any of these seminars. Why?
At some point, Carl knew I had started my own business. Why didn’t he have some information for small entrepreneurs about how to use your personal savings most wisely when taking this kind of risk? I would have read such things, and appreciated Northwestern for bringing it to my attention.
At the beginning of my search, I went to an industry website which required me to log in to get life insurance quotes. Naturally, I was deluged with irritating phone calls from starving agents who tried every trick they’d been taught to try to get an appointment with me. Lame, lame, lame. Aren’t there better ways of establishing relationships with people and helping them in more productive ways?
The Failure of Marketing
From what I can see as a customer, Northwestern is doing very little to help salespeople sell. No doubt, their marketing department is stuck in the traditional functional mindset, preoccupied with “branding,” and probably very nervous about talk of “accountability.”
Executives in financial companies generally have a difficult time grasping the “production process” paradigm, which makes it harder for them to recognize, much less solve, many of their sales and marketing problems. Of course, experience with the concept of educating prospects through their “Customer’s Journey” is what enabled me to suggest various things Northwestern could do above, and they don’t have this experience. It is a radical perspective that is not possible when you have the functional mindset.
So, perhaps it is unfair for me to imply that Northwestern’s marketing department has failed. The role I’m advocating, that of “Sales Process Improvement Department” isn’t something most companies have thought of yet.
But that is why this story might be useful to you: As a customer, it was harder for me to make a good decision than it needed to be. Northwestern left the job up to the salesperson. Carl was actually a good salesperson. He just didn’t have all the tools and support needed. He said he sees this kind of problem again and again as he tries to do his job. (So do I!)
He’s just not in the right spot to do anything about it.
What tools do your salespeople need to get their job done? More importantly, who in your company is doing something to solve that problem?
Until next week.
April 22, 2008