Why You Need To Start Treating Your Clients Like Dummys

The client was sitting there writing out a cheque for $100,000 to put into an insurance premium in what he called tax insurance. Money he was going to have to pay to ensure he minimized his tax liability at death, the reason many people do buy permanent insurance.

“You should have talked to me about this like I was a dummy.” This was weird since this person was clearly not a dummy, heavily educated and well versed in financial matters.

Here’s what I’ve realized: client have no idea what they want. I wrote an article last week about how the traditional sales process of finding out what clients want and then presenting that to them is dead, because when we are talking about complex products, they have no idea what they need because they don’t even know what the problem is.

I didn’t get a chance to fully explain myself in the last article, but the predominant sale-type operating in the marketplace is what we call “relationship builders” and I mean who wouldn’t want to be a relationship builder. However, the problem comes when these types of salespeople are challenged, they fold like a cheap table.

Here’s an example of how this might unfold:

Relationship Advisor: One of the options is permanent whole life which has both cash value and death benefit.

Normal Client: I don’t need cash value.

Relationship Advisor (now under duress): Well in that case, we have Universal Life with no cash value.

Normal Client: I like that option.

Do you see how this typical salesperson has made a major mistake by letting the client take control of the sale, a client I should add that has no idea what they are doing. That is like a surgeon taking advice from the patient who just watched an episode of “The Good Doctor”, they have no idea what they are doing. Make no mistake about this, if anything goes wrong (and stuff always goes wrong) you will be held responsible for the decision the client made, because remember in the world of relationship builders, “the client is always right”! I need you to understand that I am not saying we shouldn’t have strong relationships with clients, obviously clients are only going to buy from you if they like you. But we can have both strong relationships with clients and challenge them at the same time.

Advisors that are winning out there are what we call Challengers and they will challenge clients on their answers. Here’s why:

One of the defining characteristics of the Challenger salesperson is they make sure the client “avoids the pitfalls” of the marketplace. While this client may not want cash value, this could be the best product for them in the end.

Challengers also defend their expertise and solutions, because (and this shouldn’t come as a surprise) they know this subject matter better than their clients. Challengers are the experts and we must make sure that when a client decides, they have all the relevant information so they make the correct decision. We can help them avoid the mistakes of the past, but often we need to be assertive and push the client.

Let’s go back to that scenario where the client had said they don’t want cash value in their life insurance policy, because its just about the death benefit. What happens to a UL policy when it gets rated versus a Whole Life? Different implications right? What happens if you live longer or shorter than expected? Different implications. The point here isn’t to choose one over the other, but to fully explain the benefits of both and help the client make the absolute correct decision based on the information provided.

When we get into larger cases there are 4 sales that happen:

1.      The first is at the presentation stage.

2.      The second is at the underwriting stage, because people get rated.

3.      The third is at the placing stage, where we need to reemphasize the whole reason for doing it.

4.      The fourth is the first anniversary of the premium, because they start to question why they are paying the premium.

Going back to the start of this article where the client said: “You should have talked to me like I was a dummy,” this is one of the greatest pieces of advice that we got. He was right, because what he realized was that he didn’t know as much as he thought about this subject and he ended up deferring to our expertise. We challenged him on those assumptions. We reasserted our expertise. We controlled the sale. We managed the clients expectations. We were the experts. He relied on our advice. He avoided the pitfalls of the marketplace.

In the end, he wrote us a very large cheque because we solved a problem for him that no one else could.

Andrew McKeown is an Insurance Consultant at a leading Canadian Insurance Company. He writes about sales and insurance ideas.

Check out his online course at: Advisor's Voice

If you liked this story, leave a like or comment. If you want to read more, check out my other articles below.

If you would like to reach me directly, email me at andrew.mckeown@londonlife.com