Sadly, I believe the career agency system (also known as a “captive” agency) is nearly extinct. I found my way into the business in one of those career shops, so perhaps I am a bit biased, but I still think that was the best way to break into the profession and to gain some very necessary tools.
A career agent was usually subsidized on a schedule we gray hairs may remember as “New York Schedule Q.” The carrier was permitted to pay us a small amount of salary which decreased over a 12-month period, presumably replaced by sales commissions. We were permitted to sell only those products manufactured by the home office, and brokerage was something that was reserved for those “other” (read that as “less professional”) agents and brokers. Most importantly, we were not allowed to be eyeball to eyeball with a prospect until we had undergone rigorous training and had passed a series of exams.
Many of today’s professionals arrive in the insurance universe through the auspices of general agencies that are, of necessity, quite different than those old career shops. These agencies are typically product-aligned rather than company-aligned. Typically representing a range of products without the exclusivity required of producers by a career agency, the focus necessarily changes from education to product. The constant search to represent the cutting edge and to find appropriately priced products for their markets means that there is more of a dynamic tension between product and education. Some general agents have done a better job of mastering this task than others.
Yet regardless of the model, there are some basic “table stakes” techniques that must be inculcated to assure success. All producers are trained to understand the elements of their sales cycles. First and foremost among them is the necessity of doing a “fact-finder” as a means of understanding the prospect’s needs. No matter how well-priced your product is, or how full-featured it may be, if it doesn’t do the job the prospect needs, you will not make the sale. A well-conceived and executed fact-finder is like the best sermon: It comforts the afflicted and afflicts the comfortable. Needs will become apparent to the prospect and the successful producer will use those revelations to close the sale.
The bottom line is that if the prospect doesn’t believe that there is a problem to be solved and isn’t sufficiently discomforted by it, you risk not making a sale. Given those conditions, even if you succeed in making the sale, don’t spend those commission dollars too quickly. When the time comes for the premium to be paid (even the first installment), a buyer who does not understand the need for the product will cancel and flee from the coverage quicker than a long-tailed cat in a room full of rocking chairs.
An incomplete or missing fact-finder poses a risk to something much more valuable than today’s sale. If clients feel that their needs have not been assessed and considered before a solution is presented, they will often terminate their relationships with the salesperson. Worse than wasting the costs involved with acquiring a qualified prospect is the loss of any potential future revenue and referrals. Everyone loses, but none so much as the one trying to make the sale.
Working without having completed a fact-finder is equally perilous in politics. Mounting an effort to dismantle and rebuild an industry that represents one-sixth of our nation’s economy without a clear understanding of your “prospect” won’t achieve your desired results any more than it will in a one-on-one sales situation.
Winning an election with 52.9% of the popular vote is impressive, but it isn’t a mandate that obviates the need to understand the needs of the “prospect.” If a proper “fact-finder” had been done, the “Salesperson in Chief” would have understood that Americans care deeply about funding the existing programs for which 11 million of our fellow citizens already qualify. He and Congress would have done well to understand that the prospect had no interest in providing care or insurance for the 9.7 million illegal immigrants who are estimated to be in our country.
The national fact-finder would have revealed that 9.1 million Americans with incomes in excess of $75,000 had chosen not to purchase insurance. Some of these folks are legitimate self-payers. In any retail environment, those who pay cash should be welcomed. The estimated 4.7 million college students without insurance represent a more challenging problem, since they represent the “good” premium of young, healthy individuals which might, if captured, allow us to have a system closer to actual insurance rather than prepaid health care.
The fact-finder would also have revealed that Americans are extremely concerned about helping the remaining 13 to 16 million uninsured folks find a way to purchase some type of insurance, no matter how subsidized it might need be. These are our fellow citizens who seek care in emergency rooms and who are often the recipients of the less than the best we can offer medically. There are examples of existing programs such as the Hillsborough County Health Plan in Florida that has been successfully helping this population for years. Emulate that program or build a new one, but the fact-finder would be clear: Let’s help those who truly need our help.
If anyone had asked, they would have learned that Americans are concerned that the part of the system that generates the greatest percentage of the health care spending in the United States — the hospital systems — haven’t changed their delivery model a whole lot in the past 50 years. Compared with the changes in the actual practice of medicine, this is unacceptable and something that the “prospect” would like to see changed.
The very bottom of the fact-finder, where the “other” section always resides along with some blank space to record the prospect’s thoughts, would absolutely reflect the concern Americans have about the millions and millions of dollars of unnecessary charges made by physicians. No, these are not those unnecessary tonsillectomies that the “Salesperson in Chief” mentioned. These costs are the thousands of additional meaningless and very costly tests that doctors perform every day as they practice with the vision of a potential witness chair in a courtroom dancing in their heads. They know it and we know it, and anyone who is actually trying to fill our “needs” in a reformed system ought to have the courage to address this unfortunate reality head on.
In sales, the lack of a proper fact-finder is always a bad thing. It tells the client that the salesperson is more interested in making their sale than in making the right sale. Doctors have an even better description for this problem. They learn in medical school that prescription without diagnosis is malpractice.
David Saltzman, RHU, is a past president of NAHU and has been a health, disability, life and employee benefits broker for more than 25 years. He is director of the large group segment for Carolina Care Plan. Readers may write to him at Carolina Care Plan Inc., 201 Executive Center Drive, Columbia, SC 29210.