When looking at net profits, money is the second of the assets that we must monitor and master. "Time" is the first asset, which you can read more on here.
I prefer to separate the money that I put into my business in two categories: Expenses and Investments. First, let’s look at and define our subset consisting of expenses and investments. Expenses are pretty easy to define. They are the basic items we need to run our practice. These are dollars spent to insure that we are able to adhere to the philosophy of Service, Credibility, Integrity and Profitability (SCIP®). Expenses are things like rent, telephone, salaries, supplies, fees paid to outside consultants, professional fees, website maintenance, business insurance, health insurance, office equipment and other things of this nature. This seems pretty straight forward but it always bares further investigation. It’s important to reevaluate your vendors at least once per year because the savings through this will increase your net profit. Expense is the biggest factor when you are trying to increase your net profit. Remember: Revenues - Expenses = Net Profit Let’s look at investments vs. expenses. Investments are costs associated with items that will either maintain or increase your net profit. Some investments must be made just to stay even and keep your flow of income. Others are dollars spent to get to the next level, such as increased advertising, website enhancement, increased direct mail, client appreciation events, new office furniture or a more prestigious location and continual education. What about a new hire dedicated to a new project? What about hiring an intern? How about hiring a public relations person to enhance your position in your community? These are investments. And there is no better place to invest in than your own business. You have the most control in this endeavor. When considering deficit spending and its possible values, just make sure you have a well thought out plan with the proper strategies and tactics to give you the best chance for success. People engage in “proper” deficit spending everyday. Kids and parents borrow money for college. Cities raise money through bonds to enhance and improve their communities. There are many more examples. Money is precious. Make sure you use it properly, for it is usually a finite asset and not never ending.
0 Comments
You spend a lot of money to get in front of these prospects. So, doesn’t it just make good sense to give yourself the best opportunity of closing the sale? Time, money, and manpower are your assets. Don’t waste them! Set the stage for a successful conclusion to every sales meeting.
For many professionals, closing the sale always seems to be the toughest part of the sales cycle. If you have had this problem, don’t think you are all alone. It is the toughest part of any business. In fact, “closing the sale” applies to professions you may not have thought of. Consider these examples:
What all of these effective “sales persons” do that you may not be doing is “setting the stage” for the closing. They know, perhaps instinctively, how to prepare their “clients” for a definite conclusion. Setting the stage includes:
Here are four (4) general reasons that people don’t buy:
Understanding these “rejection factors” is why it’s important with every prospect to build trust, qualify them financially, and conduct a thorough needs analysis. A “fact finder” form allows you to find your prospect’s number one concern or need. Once you discover that need, you will be able to focus on it. As you present your story, you can make sure that you are addressing your prospect’s main concerns. Furthermore, during this fact finding process, you should never introduce new needs or concerns. The successful advisor always sticks to the big picture. If you do present new topics, you will sidetrack your discussion and move away from not toward closing the sale. Now, I know you’ve heard these tips hundreds of times. You know what to do ... but are you doing it? If not, you should review your branding and prospecting methods, examine your knowledge of your market, evaluate your time management procedures, and scrutinize your sales presentation. Again, at the heart of the process – the beginning of the sales call – is the use of fact finder interview. You would be amazed at the high percentage of advisors who don’t bother to use a fact finder. Most advisors simply walk in and try to dazzle their clients with their footwork and close a sale fast. Using a fact finder will separate you from the majority of financial sales people, because your clients and prospects will see you as the true, professional advisor. Do your homework – know your prospect, your products, and your market. Engage in some careful fact finding to identify the true needs of your client. Then, begin your “pitch” while staying on track throughout the conversation until you reach the conclusion. You will find that if you accomplish these steps, closing the sale will be the obvious and normal conclusion you and your client reach. I can't remember who first said the title above, but I know that it has been repeated for years. For many, it falls on deaf ears. Many think that they can just "wing it.” Well, the very greatest can sometimes wing it for a while. But, as things get more complex, one starts running out of hours in the day, or the rules change, then we find that we needed a plan to be able to address any of the aforementioned challenges. The following is from the book "The Best of Success," compiled by Wynn Davis. "Planning is like a road map. It can show us the way, head us in the right direction, and keep us on course. Planning means mapping out how to get from where we are now to where we want to be. Planning is the power tool for achievement - the magic bridge to our goal."
I think this sums things up pretty well. We are entering the planning season for next year, and it is time to start thinking about the plan. Income goals, market goals, digital marketing, branding, sales numbers and more. In my opinion, you need a template. You should make this as easy as possible. Therefore, I suggest that the best plan is the one year plan. You can start looking out further once you are implementing the plan. You want to keep the plan flexible and have exit strategies and plans 2 and 3. Because, as you have seen, the world changes faster now than ever before. So, that challenge also presents a tremendous opportunity. You can get there faster than your competition if the plan is ready to kick off on January 1st. So, the time to start is now. As I conclude this short commentary, I would like to offer up The Ohlson Groups business plan and marketing plan templates. I like to use the "KISS” method... Keep It Simple Stupid. And, I am addressing this to me and The entire Ohlson Group. We have the tools to assist you in reaching your goals. But, we have to have a plan. So, schedule a planning session with one of our marketing consultants. I close with the following, "Reduce your plan to writing... the moment you complete this, you will have definitely given concrete form to the intangible desire." Thanks for your attention and until next time... good selling! Most of us came in this business hearing the famous selling tip- KISS….keep it simple stupid. This acronym has never been as important as it is in today’s fixed annuity arena. Remember, when we speak of fixed annuities, we are addressing the traditional fixed and the “fixed” index annuities.
Let’s focus for a minute on the index annuity market. This is a “goofy” market. Have you even seen anything like this in your insurance career? We have products that take most agents 30 minutes to understand. How are we supposed to explain them to a prospect or client in three (3) minutes? Please allow me to quote Jack Marrion, President of the Advantage Compendium, “Fixed index annuities can best be described as savings instruments offered by insurance companies that provide a minimum guaranteed return. Insurance companies’ earnings, above and beyond what is needed for this minimum guarantee, are used to purchase an index-link providing the potential for the crediting of excess interest above the minimum guarantee.” Sounds pretty simple, doesn’t it? This is even better when you explain to the prospect that their principal and past interest gains are never subject to investment risk. They are backed by the faith and credit of the insurance company. This is safe and this is simple. Some might want a simple explanation of the difference between a “fixed rate” annuity and a “fixed index” annuity. Marrion says, “The difference between the two is that with a fixed index annuity, most of the interest paid is used to buy an index-link on an equity index. This gives your client the potential for more interest if the index cooperates.” This sounds pretty simple to me. You do, of course, have the benefit of many fine point of sales pieces along with historical performances of each crediting methodology. So what’s happened? Why all the confusion? Okay, many companies have made these products difficult to understand ... too many index choices and too many games. Some products have stretched the surrender periods without giving anything back to the client. Don’t get me wrong, long surrender periods are okay if the client gets something in exchange and fully understands what he/she is buying. Some products will never, in my opinion, perform well. Why? They are building in unmanageable commission structures. I like high commissions as well as anyone, but not at the expense of our clients.
Before we analyze potential changes, let’s look at the traditional “fixed annuity.” The traditional, non-index annuity, has been around for quite some time. It has really served a great purpose. People have been able to save money through this vehicle on a tax deferred basis. The last ten (10) years provided our industry with an excellent opportunity for explosive growth. Boy did it ever happen! Bank annuity sales took off; agents were experiencing tremendous increase in incomes and companies’ assets exploded. The annuity design was simple. They mimicked CDs. That’s the greatest benchmark for today’s consumer – “is this annuity paying more than my CD?” This is very important because that is the most important factor in your client’s decision to purchase. Tax deferred growth, freedom from probate and an income they can’t outlive is a distant second to “beating” the CD. But things started to get a little cloudy. Let’s take a look. Companies wanted an increase in market share. They wanted more assets under management. Remember, that’s one of the two (2) biggest factors in which an insurance company makes money. It’s called the spread. It’s the difference between what the company earns in investment income and what they pay your client. The bigger the spread…..the bigger the profit. The other main factor is expense (home office costs and of course, your commissions). So, enter the day of the first year bonus. This “sizzling” first year rate brought in a lot of money. These bonuses have brought about some critics from the press, as well as, disgruntled clients. Why? Renewal rates, in many cases, tanked. These were declared rate annuities that allow the company to “declare” where they set the renewal rates. Many companies in search of income reduced your client’s rate to increase the spread. Wall Street liked it….but not the policyholder. I believe that it’s in your best interest, as well as your clients, to purchase a multi-year rate guaranteed annuity if you are not proposing an index annuity. Otherwise, your client is saving in a vehicle with no guarantee of future results. They surely wouldn’t do this with a bank CD. Don’t get me wrong, there are plenty of honorable companies that will treat your client fairly. Also, we do want the company to be profitable. They are our partners. There are many ways to analyze a company to determine how they will renew your client’s rates:
I have been fortunate to be on both sides of the fence. I’ve been an insurance company president as well as having twenty (20) plus years in the field as an agent, general agent and owner of an insurance marketing organization. So, please excuse me if I tend to over-analyze. But, I am happy to say that the next couple of years will get our annuity industry back on track. Companies are now designing new products, pulling old products and adhering to new regulatory guidelines. The business is going to be better than ever! The policyholder, the insurance company and the agent will all do well! We are getting back to a level playing field. I, for one, am extremely happy with the direction our industry MUST take if we are going to be able to operate profitably without government intervention. So, what do we do next? Here we go: Sell only what you believe in. Don’t rationalize away parts of the contract you don’t like. Only sell “GOOD STUFF”. Have a concise presentation that provides your prospect or client with all the information they need to make a decision. They buy easier when they understand what you are selling. Don’t over promise. Don’t sell the stock market. This isn’t an investment. The fixed index annuity is the most important annuity in the industry. Seniors and Boomers will continue to buy. Our future is bright for multiple sales of annuities and ancillary products - but, only if they are happy with previous purchases. This product is simple and beautiful. Sell it properly and you will profit immensely. The answer is simple. Sell it right and sell what’s good. Good for everyone. We can’t lose. Until Next Time ... Good Selling! While obtaining leads is most advisor’s number one priority, the 2nd most important step is closing the sale. In order to do this, you must put yourself in your client’s shoes and ask the appropriate questions. Along with that, you should provide them with professional services to build relationships, trust, and position yourself as their trusted financial consultant. Let's discuss 5 sales tips for annuity selling insurance agents to help you boost sales and continue achieving your goals: 1. Understand Your Target Market: The first step in selling annuities is to have a deep understanding of your target market. Who are your ideal clients and what are their needs and concerns? What are their financial goals? Understanding your target market will enable you to tailor your sales approach and messaging to resonate with them. This will help you identify the right prospects and focus your efforts on those who are most likely to be interested in purchasing annuities. 2. Build Trust and Establish Relationships: Selling annuities is not just about making a one-time sale, but also about building long-term relationships with your clients. Trust is crucial in the insurance industry, and it takes time to establish. Be honest, transparent, and professional in your interactions with clients. Take the time to understand their financial situation, goals, and concerns. Educate them about annuities and how they can benefit from them. Listen attentively to their needs and provide personalized solutions. Building trust and establishing relationships will help you earn repeat business and referrals, which are essential for long-term success in annuity sales. 3. Be a Trusted Advisor: As an insurance agent, it's important to position yourself as a trusted advisor rather than just a salesperson. Your clients are looking for someone who can provide expert advice and guidance on their financial matters. Educate yourself about annuities, including the different types, features, benefits, and risks. Stay updated with the latest industry trends and regulations. Be prepared to answer questions, address concerns, and provide accurate information to help your clients make informed decisions. By positioning yourself as a trusted advisor, you will build credibility and confidence with your clients, leading to increased sales. 4. Customize Your Sales Approach: Not all annuity prospects are the same, and a one-size-fits-all sales approach may not be effective. Customize your sales approach based on each client's unique needs, goals, and preferences. Tailor your messaging to resonate with their specific situation. Use language that they can understand, avoiding technical jargon. Use visual aids, such as charts or illustrations, to simplify complex concepts. Be flexible and adaptive in your sales approach, and be prepared to adjust your strategy based on the feedback and responses from your clients. A customized approach will show your clients that you genuinely care about their individual needs, which can significantly impact your sales success. 5. Provide Excellent Customer Service: Excellent customer service is essential in any sales role, and annuity sales are no exception. Be responsive to your clients' inquiries, whether it's through phone calls, emails, or in-person meetings. Be prompt and reliable in providing information or assistance. Be patient and empathetic, especially when dealing with clients who may have concerns or questions about annuities. Demonstrate professionalism and integrity in all your interactions with clients, even after the sale is made. By providing excellent customer service, you will not only retain your existing clients but also receive positive reviews and referrals, which can contribute to your sales growth. Now that these tips are fresh in your head, it's time to reach out to your leads. Dig into your CRM or prospect pool and see how you can help them. Perhaps it's through providing some quotes or wealth transfer strategies, sending educational consumer materials, or maybe re-introducing yourself and remind them you're here for them. Just because a lead hasn't converted yet, doesn't mean they won't. Is Your Annuity Supply Low?We can help with that! Let us give you contact information for leads who are actively searching for annuity information. And the best part? Our in-house generated annuity leads cost around 1/3 of the price of other annuity lead vendors! Implement your sales knowledge today!
This was the first lesson drilled into me during the initial week of sales training at one of the most established and entrusted insurers in our industry. I’ve learned it’s much better to ask open ended questions, listen, ask permission to take notes, then repeat what you heard back to the client. This demonstrates that beyond listening, you seek to understand where they are coming from. This is step one in establishing yourself as someone worthy of trust. If you are smooth enough, use their name while doing so, and you’ll earn a few extra brownie points. After all, everyone’s favorite subject is themselves, their family, or their business.
Some advisors “wing it” or meet with a client with sales illustration in hand ready to go. However, I propose a different approach. By asking your prospects these 5 key questions during your initial meeting, you’ll find prospects reveal more about themselves when asked a thought-provoking question. This strategy change can move you from being perceived as “selling a product” towards being viewed as a problem solver, and who wouldn’t want that? Prospects often say things like, “Those are good questions, you’ve really got me thinking...” or “Wow, no one’s asked me this before!” Ask these questions, schedule your next appointment while you’re there, send a follow up letter, then share what you’ve learned with us. We can help you put together the product solutions and illustrations that work best. Create a great referral plan and your business will sustain itself for years to come. Yes, I know that the MYGA (Multi Year Guarantee Annuity) market is hot. With the Fed steadily raising rates over the last year, the marketplace has seen an explosion in fixed annuity business. And with the inverted yield curve, the short term rates are even better than long term rates! Lastly, with the stock market being rocky, clients are flocking to guarantees. While all of this equals great returns for short-term planning for your clients, we shouldn’t lose focus on long-term goals. I’d like to re-introduce you to the “other" MYGAs. I’m talking about guaranteed lifetime withdrawal benefits, or income riders. In my opinion, right now is the perfect time to sell these GLWBs. The products give your clients GUARANTEED growth to the income account value and GUARANTEED benefit payouts for life. I know many of our agents stopped promoting income riders to their clients during the bull market times of the last ten years. Historical projections looked fantastic due to illustrations relying heavily on returns of the last decade. But times have changed. Consumer attitudes have changed. Many clients believe we will have a recession soon and a topsy turvy stock market will continue. So what’s the solution? We need to get back to income planning by asking our clients, “How much do you need and when do you need it?”When we know this, we can solve for how much premium we need to put into an index annuity with an income rider to pay out that needed benefit for life. Of course we’re still tied to an index, since these are index annuities, and we’ll be able to capture significant returns when the stock market does bounce back. But you’re protecting your clients from another downturn, should it happen. In conclusion, I think we need to look outside of the short-term MYGA market and look to solve your clients’ long-term income planning needs. Call the Ohlson Group so we can help design your client’s next Personal Pension Plan to solve their biggest problem – GUARANTEED lifetime income!
Distribution Matters! Retirement planning encompasses two crucial phases: the accumulation phase and the distribution phase. During the Accumulation Phase, which spans our working years, individuals set aside and invest income to prepare for retirement. This results in an account balance that accumulates until the day of retirement. The Distribution Phase commences on retirement day and continues throughout one's life. It involves converting accumulated accounts into income, ultimately determining the retiree's lifestyle in retirement. While much attention is often given to maximizing the account balance for retirement, it's essential to consider non-financial aspects and limitations when evaluating alternatives. The table below highlights some of these: Here Are Some Key Considerations:
1. Taxes Are Likely to Increase: Reviewing historical trends suggests an increased likelihood of future tax hikes, given the correlation between national debt and GDP. As the U.S. national debt has surged, reaching $33.17 trillion, a 312% increase in 15 years, many anticipate potential tax increases. 2. IUL as a Tax-Free Retirement Income Solution: Indexed Universal Life (IUL) presents a tax-efficient retirement solution. In addition to leveraging Roth IRAs, IUL can complement and address gaps left by other retirement accounts. IUL policies offer the potential for cash accumulation, tax-free income, accelerated living benefit riders, and an income tax-free death benefit. Under the current tax code (section 7702), permanent life insurance allows for retirement income not counted or taxed as income. The cash value serves as collateral for a tax-free loan against the death benefit, providing flexibility in withdrawals and loans during retirement. 3. Initiating the Tax-Free Retirement Income Conversation: To guide clients, educate them on tax risk using historical data and proposed legislation. Assess their current tax diversification and its implications for their financial situation. Utilize interactive client presentation tools to showcase the advantages of cash value life insurance compared to alternative financial tools. Making informed decisions involves comparing and analyzing results. By mastering this skill set, your confidence in navigating retirement planning options will grow. If you seek tools to enhance your sales experience, reach out to Levon Justice, our life insurance expert at the Ohlson Group, for assistance. We're here to help! 😊 Happy New Year! We at Ohlson Group cannot thank you enough for your support in 2023 and throughout the years. However, it is “primary season” and we are asking for your vote in 2024! No, we are not running for any political office – we are running (working hard!) to earn your vote (business) this year. Why link up with Ohlson Group? Here are some compelling reasons to make Ohlson Group your annuity and life IMO … Exclusive Annuity Leads We generate exclusive annuity leads for producers who are working with Ohlson Group. These are high-quality and exclusive annuity leads. The cost is much more palpable versus traditional lead vendors. Exclusive Branding Opportunity When you join Ohlson Group, you automatically become a member of The Safe Money Places Agent Network. Check out www.safemoneyplaces.com – we own this consumer site and use it to help enhance agents’ credibility. Additionally, we build Ohlson Group agents their own Safe Money Places themed website. You own the site – we maintain and update it for you and provide proprietary client-facing videos, consumer guides and storyboard scenarios. Savvy Marketing Team Ohlson Group also provides agents with case design and support. Our annuity and life marketers have been doing this for decades. We have subscriptions to all pertinent software and aggregator systems and work hand-in-hand with agents to ensure we find the best solution for your case. Back Office Support Our licensing, contracting and new business teams are second to none. We combine a personal touch (phone call and e-mail updates) as well as employing technology to help. We utilize a new technology to monitor your cases 24/7! Agent Commission Bonus: We realize nothing happens until one of you – our valued agents – sells something. We only feel it is right to reward quality producers with additional compensation. We pay hundreds of thousands of dollars in bonuses each year to agents. We make it easy to qualify as well. Have questions, just ask one of our marketers for details. In closing, we can all make 2024 a banner year. Annuity rates are still at or near all-time highs and we have an opportunity in front of us that only comes along every so often. Let’s take advantage of the opportunity, help our clients and make it a prosperous year. Give us a call and let us know how we can earn your Vote in 2024! Most agents have heard and live by the Standard 10-3-1 Rule (10 leads, 3 appointments, 1 sale). As long as you can achieve that level of performance and closing ratios, you will earn a decent living. Of course, the main goal of each lead campaign is to set appointments and make a sale. However, one of the most important aspects of lead campaigns is often overlooked… leads are fundamental towards building a database of prospects with on-going sales opportunities.
It’s easy for all of us to forget that purchasing an annuity is a HUGE financial decision that takes a lot of time and care to consider. People have worked their entire lives to build up their retirement savings so they can enjoy their golden years. Therefore, they are (and should be) ultra protective of those assets. This leads me to my next point, that most leads will not become sales and clients within 30 days. Simply put, that’s really not enough time for most people to make a larger financial decision, especially for many, the last major one that affects their entire retirement moving forward. Most advisors in the field tend to operate on a “hunting prospecting sales strategy” versus a “farming prospecting sales strategy”. Hunting type of sales approach means one only tries reaching the leads for a short time, such as 2 weeks. If the agent doesn’t connect with that person after XX of attempts within 14 days, they simply stop contacting them and move on. These agents assume if they can’t connect to the lead within that time frame, that a sale is unlikely. However, some of the most successful advisors beg to differ. One of our most successful producers increased his annual production tremendously (30% or more in the first year) after he went from a “hunting” prospecting sales method to a “farming” strategy. His system helped him go from a $8-$10M Producer to a $20+M producer. What he found was there were a lot of “low hanging fruit” in his database of his older leads. So, by creating a long-term drip system, he was able to stay in contact and top of mind with those leads as they become closer to the buying stage of the sales cycle. And the best thing, his ROI improved because he was no longer just throwing away money by tossing away the lead after 30 days… he now had a lead until the person says “stop calling”. This is one example of why building a database of prospects is just as important as the immediate sale. It creates scalable growth by having a pool of future sales opportunities. Since we run a successful lead program, we’ve seen it ourselves first-hand. We’ve had leads reconvert through our system 6 months later, even 12 months later, and at that point, will become a sale. With our lead program, we have the ability to notify the agent who is tied to that lead exclusively, and they have made sales from those leads in the past. For us, this ongoing lead system is a long-term marketing strategy that resembles a farming sales and marketing strategy. So… what is a “farming prospecting sales strategy” and how do you create one? This strategy means the agent has created a long-term drip marketing process built around a database of prospects of potential sales. Basically, agents have some sort of system in place to keep the sale alive for longer. Some agents simply have a CRM where they automate follow-up reminder tasks. For example, they set the CRM to remind them to manually send emails and call people periodically… like 2X per month. Other advisors have a full-on automated drip marketing system that sends out emails frequently, text messages periodically, and reminder tasks to regularly make phone calls. Regardless if you’re a tech guru or not… the main thing to develop a “farming prospecting sales method” is to create a long-term drip process. This could literally be something as simple as having email templates written up in Microsoft Word and a spreadsheet in Excel that helps you stay organized on your follow-ups. Next time you run a lead campaign, please try to keep in mind, you may have a lot more sales opportunities than what presents itself within 30 days. It’s important to put yourself in your client’s shoes. I would encourage you to ask yourself, “How much time would you need to research the product solution, the advisor, and reflect on whether purchasing a $250k annuity is a good decision?” Would you need more than 2 weeks to make that decision? I don’t know about you, but I’d spend more than 30 days researching a car purchase, much less an annuity! Many people simply need more time to make that decision. They may be nearing retirement but are still working and are preparing to retire 90 days or even 6 months to a year later. So, it’s important to stay in consistent communication with one another. Want to learn more on our specific annuity lead program, or would like some general tips? Give us a call today or schedule an appointment with one of our senior marketers. |
Archives
March 2024
Categories |