The insurance sales funnel has basically been structured the same way for years, with a wide opening at the top that dwindles to a skinny tube at the bottom. The old method of prospecting was to cram as many prospects into the top of the funnel as possible, hoping that new clients would pop out of the other end. Then, the only thing that mattered was sheer activity.
Not so today. Yes, activity is still important, but what really matters is that you feed the right people into the funnel in the first place, nurture those prospects, and hasten their passage through the sales cycle, all of which will decrease the amount of time it takes to close your sale.
In the modern insurance industry, even a 10 percent reduction in the length of a sale cycle can increase productivity by about 25 percent. This means more clients, more deals, more referrals, and more commissions.
Picture the funnel from the olden days. If you just stuff as much as you can into the top of the funnel, it’s more likely that weeds, rocks, sand, and other debris will clog the opening, preventing the steady entry and flow of good business. Just try pouring water in a funnel that is filled with debris. What happens? The water backs up and nothing moves through the funnel. Compare that water with the prospects you need to move through the funnel, and it does not create a pleasant picture — and certainly not one that fosters better business.
It’s not difficult to find new business, however, if you simply change the shape of your funnel. Here’s how: Make it narrower at the top and gradually wider throughout the middle, with the spout at the bottom as wide as it can possibly be. This avoids the natural temptation to feed just any consumers into that funnel, regardless of how well you think they meet your ideal client profile — a profile that, incidentally, needs to be constantly refined for the best results.
Once, I really wanted to refer my clients to an insurance agent I knew. But before doing this, I needed him to answer two questions:
• Who is your ideal client?
• What is a good lead for you?
His answer to both was, “Anyone who has assets to protect.” I told him that the entire world is made up of such prospects and that his criteria were way too broad for me to think of anyone who could fill his needs. After much discussion, he finally identified two groups that would be an ideal match for his skills and resources: young families about to buy a house, and dry cleaners (his company underwrote dry cleaning businesses). That definitely made it easier to point him in the right direction than simply going by “Anyone who has assets to protect.” After this, rather than randomly feeding clients into the sales funnel and potentially clogging things up and preventing their fluid movement throughout the cycle, he was able to clear the passageway for the prospects who met his expertise and expectations.
Passing your ideal clients through the sales funnel is only the first part of the sales process, however. Part two consists of everything that happens after that — if you’re not talking to the right people, nothing else really matters, does it?
Agents pay far too much attention to part two: conducting meetings, asking questions, overcoming objections, closing, etc. Yes, you need to know how to listen and question, how to create a sense of urgency, and how to advance the sale. But if we’re not in front of the right people to begin with, it’s a waste of your time.
Part one largely consists of prospecting, and most of you do not enjoy this unpleasant yet essential task. In a September 2007 study by conducted by Agent Media* and NAILBA, 67 percent of agents said that prospecting for new business is the most challenging aspect of selling insurance, and another 67 percent said they dedicate less than 25 percent of their work time to prospecting for new business.
Simply speaking, prospecting includes a flurry of activities such as cold-calling, advertising, direct mail and email campaigns, Web strategies, networking activities, and referrals.
What if you focused on referrals as the proactive strategy adopted to attract new clients? When you’ve been referred, you can experience a shorter sales cycle, you ace out the competition, you create trust, and you are guaranteed a new client more than 50 percent of the time — perhaps even as high as 70 to 90 percent of the time. Virtually no other business development strategy can claim these results.
What would your business look like if only your referred prospects were in the funnel, the prospects who matched your ideal client profile? You would continually feed your funnel with exactly the kind of business you wanted, and you, in turn, would be referred to other clients who match that same profile.
Joanne Black is a professional speaker and author of “No More Cold Calling: The Breakthrough System That Will Leave Your Competition in the Dust.” For more information, visit www.nomorecoldcalling.com.
*Agent Media is the publisher of the Agent’s Sales Journal.