Insurance in Singapore is a necessity; this we all know. Yet, many a times, we Singaporeans need a little push or two from our friendly insurance advisor before we even consider buying. Let discuss in this blog post why this is so?
Logic Vs Emotion
Any competent marketer will know that people rationalize with logic but it is emotions that trigger action. When a person says he understands that insurance is a necessity, its mainly his logical mind speaking. But behind that logical mind, what is likely to be his emotional self talk? For some, it could be that they feel the pain (an emotional feeling) of parting with their money. For others, it could be a feeling inside that bad things (e.g. the insured events) will never happen to them.
The Selling Method
To make matters worse, many agents today sell using a very logical approach. This is in part due to companies promoting a needs based approach to insurance selling and in part due to the regulations which require that agents go through the Personal Financial Review (PFR) process with their clients.
Don’t get me wrong; I am not saying that such approaches are wrong. I believe in the PFR approach because it provides a basis for the subsequent product recommendation and is fair for both the client and agent. All I am saying is that in the hands of an unskillful insurance advisor, the process becomes all so logical that the only thing it achieves is showing the client that there is a huge gap between what he needs and has. And many people don’t just buy because they logically know that there is a gap; it simply does not sink into their emotional self.
Picture this – if the PFR process is that powerful, then all an insurer needs to do is to post the PFR online (e.g. on the company website) and get potential clients to fill them up as and when they visit the site. Upon completion of the PFR, these clients will likely uncover the same gaps and insurance needs. In turn, these insurers will enjoy brisk business without having to spend much on distribution cost. Does this ever happen in real life? Have we ever seen people rushing to insurers wanting to purchase policies on their own accord? Obviously not. Why? Because it is emotions and not logic that cements the sale.
Selling Savings and Investment More than Protection
Many of us would have experienced being approached at insurance roadshows or bank branches. What are these practitioners usually selling? Are they selling based on protection needs or drawing parallels between what their product can do in terms of rate of return when compared to leaving that same amount of money in the bank?
Unfortunately for these agents, the closing rates are usually not that high unless they happen to be marketing a product with really high returns. Why? Because, unlike protection needs which are immediate, there usually is no urgency on the part of the client to pick up a savings or investment plan on the spot.
The Right Way to Put Forth the Necessity of Insurance to Clients
To sell well, the agent has to get his point across. The message must hit home emotionally and not merely at the logical level.
Using the PFR approach as an example, if assuming (for simplicity sake) that the completed PFR shows that a client who earns $3000 per month has zero cash or assets other than a $100,000 life insurance policy, how can an agent bring home the message that this simply is not enough? There are two ways he can go about it; he could, for example, read out from the PFR and explain it as it is (the logical approach), or say the following:
“Mr Prospect, if I have with me now a $100,000 cheque and I am willing to trade it with you for all the future income stream that you are going to generate for the rest of your life, will you agree to trade?”
When the prospect says “No,” the agent immediately follows as such:
“If this trade is not good enough for you, why force in on your family then? You see, if something were to happen to you and you are no longer around, your family will have to forego all your future income and be left to fend for themselves with just $100,000, the proceeds that you left behind through this policy. If this trade is not good enough for you, why force it on your family?”
Wouldn’t you agree that the second method is so much more powerful? It gets the message across and it compels action.
Lastly, while this post is aimed at educating agents and helping them become more effective in the work they do, it is also our hope that if you are a non agent reading it, it will inspire you to contact your agent and review your policy for the sake of your loved ones.
(Photo Credit: Ambro/ FreeDigitalPhotos.net)