By Kenneth L. Fields, MSM, CIC, CPCU, CLU, ChFC
About 10,000 baby boomers (76.4 million people born from 1946–1964) turn 65 every day in the United States, and this will continue for the next 11 years. About 65,000 of those who are retiring each year are currently employed in the insurance industry.
So what does this have to do with selling insurance?
We learn in The National Alliance’s Dynamics of Selling course that the most powerful card in the sales “deck” is the relationship card. Relationships trump coverage, price, and service. There are prospects who are absolutely not going to buy from you at any price because of their relationship with the incumbent agent. This is one of the reasons over 90% of commercial accounts renew with the incumbent agent. Another important consideration is the ease of doing business. The easiest thing a prospect can do at renewal time is to stay where they are. No muss, no fuss—write a check, done, and done.
Now, back to the baby boomers.
“There is an approaching flood of baby boomers selling their businesses… “
The above words were written by Bruce Hakutizwi, the U.S. and International Manager of BusinessesForSale.com, in an article entitled Why It’s Prime Time to Buy a Business from a Retiring Baby Boomer. Included in the thousands of “boomers” who are retiring over the next several years are business owners (including those who own insurance agencies) and insurance agents. Those soon-to-be affected businesses, which Hakutizwi estimates will approach 12 million (including insurance agencies) will be sold, turned over to family members, or merged with other businesses. This means those long-term relationships between thousands of business owners and their insurance agents are going to be broken, and new relationships will have to be developed.
“When opportunity knocks, all some people can do is complain about the noise.” —Bill Maher
This spells O P P O R T U N I T Y for younger insurance agents who are building their books of business and for agencies who want to capitalize on this opportunity by recruiting new producers.
So how can you know when these changes are going to happen? How will you know when the relationships between businesses and their insurance agents will become broken and the opportunity to become the “go-to” insurance agent will arise—either because the business owner or the insurance agent retires?
“Luck is a matter of preparation meeting opportunity.”
1. Develop and maintain relationships with the help of a CRM. Knowing in advance that changes are in the works and having already established relationships with key players can put you in the right place at the right time. A Customer Relationship Management (CRM) program can help you manage information and remind you to stay connected with prospects so you can act at an opportune time.
2. Utilize social media like Facebook and LinkedIn. Social media can help you stay on top of developments in your marketing territory in real time. You can learn of changes in ownership or management long before the information reaches more traditional media. This can give you an important jump on your competition.
3. Join trade associations. Actively participating in trade associations makes it possible to prospect “from the inside.” Typically, associate members enjoy all the benefits of a regular membership except possibly holding office and voting. This gives you access to membership rosters, trade publications, and the like. You can even exhibit at trade shows.
4. Ask your current customers to help you. Your current customers can be great sources of information and referrals. After all, they’ve paid you the highest compliment a salesperson can receive – they bought from you! Databases like ReferenceUSA.com make it easy to identify their competitors and neighboring businesses in order to pinpoint accounts you really want. Also, ask about your customers’ suppliers and clients.
5. Develop centers of influence. Identify those people you already know who are in positions of leadership or have influence in your marketing territory. Examples are business brokers, realtors, civic leaders, accountants, and attorneys. These are people who know when businesses are going to change hands before it’s common knowledge.
6. Get face to face with prospects. There’s no substitute for personal contact with prospects. No email or letter can compete with a physical visit to a business. Once commonplace, there are few agents today who are willing to take the time to drop in and just visit with a business owner. Those who do are generally received very favorably. Even if the owner isn’t available, the information that can be gleaned from a receptionist or office manager can be invaluable.
Many of those very desirable accounts in your marketing territory that have been virtually unattainable in the past because of unbreakable relationships are going to move over the next few years. These sales may not be made this year or next, but if you take the time to research these opportunities and cultivate relationships, the payoff can be significant.
When opportunity knocks, some complain about the noise. Others become energized and capitalize on the situation. In the insurance industry, there has been no better time in the past 50 years to grow our businesses—now is the moment!
About the Author: Kenneth L. Fields, MSM, CIC, CPCU, CLU, ChFCKen Fields is the Sales Development Director for State Auto Insurance Company. He is also a member of the CIC National Alliance faculty, an Academy board member, a Ruble faculty member, and a 40+ year CIC. Ken and his business partner, State Auto Regional Sales Manager Diane Masterson, CIC, CPCU, are co-developers of the PaceSetter Sales Development Program.