Dani Peer discusses the question of whether it’s still ok to scare and disturb advice prospects as a legitimate method of securing life insurance business. In what may be a difficult conversation for some advisers, Dani takes what has been a ‘traditional’ or ‘historical’ selling technique and positions it within the context of the modern day, consumer-centric, adviser/client conversation…
In this era of enlightened consumers and overzealous consumer-rights’ protectors, is it still okay to use fear to sell insurance?
I’m in the absolutely “yes” camp, but with a proviso. It needs to be used carefully and with integrity. Fear used in a crass 20th century style will offend a buyer. As a kid, I remember listening to the war stories of grizzled veterans about how they shocked, cajoled and sometimes just plain bullied people into signing. Holding their drink and cigarette in one hand, they’d lean forward and deliver the punch line whilst jabbing you in the chest with a finger: “And then I said… I said… what if tomorrow you were hit by a bus? Then where would your family be?” This throwback from the seventies might be amusing now, but that clumsy, in-your-face selling style was pretty main stream.
It’s a tragedy of the human condition that discomfort is the most effective propeller of meaningful change
Today’s consumers won’t stand for this boorish behaviour. But that doesn’t mean that fear cannot be used to great effect. Fear is a great motivator. It motivates us to take action. In his magnificent book on leadership, Lead by Greatness, author David Lapin says, “It’s a tragedy of the human condition that discomfort is the most effective propeller of meaningful change”.
In my book, Powerful Words, I share a short anecdote about how my personal fear motivated me to make the major decision to move countries. I’d like to share this with you:
In June 1997 I was thrilled with the birth of my first child, Jessie. And I started to worry (it’s amazing how vulnerable you become as a parent). Crime in South Africa had started to gain some real momentum – it wasn’t just some guy who was hijacked, it was now your cousin, your neighbour, your colleague.
I remembered that dreadful day when I was told that one of my staff had been shot in a shopping centre parking lot. He had been taken to hospital in a helicopter and was in a critical condition. I remembered another of my staff who arrived at the office looking like he hadn’t finished getting dressed. His cuffs were open and sticking out of his jacket and he wasn’t wearing shoes. He had just been mugged.
And I started to fear. And that far distant thought of immigrating became front of mind. My priorities changed. I was motivated to take all sorts of action. I didn’t even wait for the Australian High Commission to post me the required visa documentation. I got into my car and drove to Pretoria – a city an hour away from Johannesburg – to collect them.
Fear creates action.
Today advisers must be more subtle when using fear to sell. Let’s look at a few examples that will shake and disturb the most complacent and disengaged of people:
Modelling and gap analysis
For some crazy reason, many licensees have failed to provide their advisers with a simple, easy-to-use calculator that equips a practitioner to demonstrate insurance gaps in an obvious and visual manner.
A graph showing how a lump sum evaporates well before beneficiaries reach financial independence is very confronting – and disturbing. Finding fear moves the conversation away from costs and focusses the client’s attention on what they are trying to achieve with their insurance.
Unstructured cover and lack of estate planning
Many advisers rush through the simple estate planning questions in a fact find. “Have you got a will… yep… and family trust? Yep…” Yet the absence of constructive estate planning is teeming with problems and undiscovered fears. There may be tax issues when big lump sums fall into the hands of a single beneficiary. Insurance proceeds may be contested, may fall into the hands of inexperienced and irresponsible beneficiaries, or may be lost altogether as a result of divorce.
Reluctant clients need to be confronted with the possible results of lazy thinking and an absence of planning.
The bullet proof youngster
I’m sure that you’ve had many a cocky and confident young person roll their eyes at you when you try to convince them to increase their cover. Death and the possibility of permanent disability are not topics that the young mind spends much time contemplating. I, too, was bullet proof at 25. How do we use fear to motivate the fearless to action? There are two opportunities to do so…
- One approach is to flip the focus from themselves to others. It is true that many young people don’t have financial dependants. It is also true that they can become someone else’s liability. There are sufficient examples of young people doing themselves great harm and then becoming physically and financially dependent on parents and others close to them. In some tragic cases this dependence costs a fortune and can ruin the financial security of the carer. I can reflect on several fund raisers held for seriously injured football players and for young people involved in serious car accidents. Hold a mirror to your client. It’s not just about them.
- Another approach is to explain that insurance is not a right. It’s a privilege. This is not well understood until an application is rejected. Chances are we’ll all need cover at some stages of our lives. The question is, will it be available? For many of us the answer will be positive. For a few, not so. ‘Do you feel lucky, punk?’
Reluctant clients need to be confronted with the possible results of lazy thinking
I wrote about the concept of “problem questions” in a Riskinfo article earlier this year. Problem questions are questions that assist with the discovery of problems. These are very useful to help the person being questioned to find fear (in fact that’s the whole point). When it comes to the sale of insurance and motivating the inert, here’s a good example of how a problem question can be used:
“How did you decide on this amount of life/TPD/trauma cover?” Or “On what basis was this amount of cover determined?”
In many cases there was very little thought other than perhaps whether the premium involved was acceptable. By asking this question the adviser introduces the worry that because no (or very little) thought has been applied, the current solution is sub-optimal and needs to be addressed.
Insurance still remains a grudge purchase for many consumers. That’s one of the key reasons for Australia being a woefully underinsured nation. You’d think that there are enough stats to this effect put out by the life offices to make this a mainstream issue. But it’s not. Why? Because there is no fear amongst the underinsured masses. Inject some fear into your sales conversation and motivate your client to action!
Dani Peer is a popular keynote speaker and workshop facilitator. He is associated with several highly respected consultancies and training organisations that support institutions, dealer groups and individual practices involved in the provision of financial advice. His brief is to communicate their programs with clarity, passion, vigour and energy.
He is also the author of the book Powerful Words: The New Way to Sell Financial Advice. You can order a copy here.