Sales skills are the lifeblood of the benefits industry. But fewer and fewer carriers and agencies have formal programs that teach their employees basic salesmanship. Instead, salespeople rely on their own ideas, what they learn from peers, and informal mentorship arrangements.
And, frankly, some industry insiders say, that’s not good enough.
They say that few salespeople today have the skills they need to compete in a rapidly changing marketplace. What’s more, they say, the industry isn’t training up-and-coming salespeople in the skills they’ll need in the future, leaving the benefits insurance industry without a pipeline of high-quality sales professionals who can step into the jobs that retiring baby boomers leave in their wake.
What makes a good salesperson?
A good salesperson is "insatiably curious," says Kevin Trokey, founding partner and coach at Q4intelligence, a benefits industry-consulting firm based in Kirkwood, Mo. "They are there to teach, educate, and solve the buyer’s problem, rather than selling their own story. The selling takes care of itself."
Doug Lenhoff, managing director of DI Broker West in Portland, Ore., echoes Trokey’s assertion that listening to a situation from a client’s perspective is a vital sales skill.
"We spend an awful lot of time teaching salespeople how to talk, as opposed to how to listen," he says. "The better salespeople are able to recognize their biases, so they’re better able to hear another person’s perspective, instead of what they want to hear."
Time management is another important skill, Lenhoff adds. "Most insurance salespeople are self managed. The more discipline they have around how they spend their days, the better the sales results that they’ll see," he says.
Along with those skills — plus an extroverted nature, an ability to be motivated by money and recognition, and a strong desire to win — good salespeople also have subject matter competency, says Jay Starkman, CEO of Engage PEO in Fort Lauderdale, Fla.
"Salespeople need to know where clients exist in the regulatory environment and act as a consultant, to help the client navigate that stuff. Otherwise, that client is going to go to someone else who can help them," he says. "If you’re selling health care and you’re not an expert on the Affordable Care Act, then you’re selling cassette tapes."
Two eras, two sales models
There are consultative salespeople with subject matter competency out there, of course. But there aren’t enough of them, for several reasons.
First, industry insiders say, salespeople aren’t getting the same deliberate, often intensive training that the insurance industry offered a generation ago. "Back in the day, they would take you away for three to six weeks of intense training," says Reid Rasmussen, president and co-owner of freshbenies in McKinney, Texas. "Then they’d put you out on the street, and if you made a go of it, you became a professional salesperson."
Lenhoff agrees that sales training is not as robust as it once was.
"The majority of people in leadership positions in my industry today, on the sales side, were trained by Paul Revere, Provident Life and Accident, and Unum," he says. "We were trained to understand the product, why it costs what it costs. It made it easier to talk about the product and why it’s important. But there’s nobody who is providing that kind of training today."
The average age of a broker who was trained in this way, Rasmussen says, is 58. When today’s young hires arrive, "carriers don’t put them through the same kind of school, don’t put in the same kind of investment. The people who were around 20 or 30 years ago learned the business of selling, and that became the basis of how everyone sold. Now people learn it on their own, from their sales managers, and learn to sell a carrier’s products in a specific way. There’s less focus on how to sell as a general subject," he says.
There also is more focus today on product knowledge than there was in the past. Decades ago, Rasmussen says, "building relationships meant getting business." Product knowledge was secondary.
This model worked, he says, because many health plans were very similar to one another. Buying a creative solution often wasn’t an option, so clients bought coverage from salespeople that they liked.
"If someone was just good at quoting business, they could make a go of it," Rasmussen says. There was little incentive to keep developing sales skills, or to hone their ability to creatively solve employer problems.
Now, by contrast, there are a wealth of benefit offerings, and many opportunities to creatively improve end clients’ business situations. That means getting fluent with a huge amount of knowledge, a volume that the Patient Protection and Affordable Care Act has exponentially increased.
"There’s a lot of detail around legal issues, compliance, ACA rules, accounting," Rasmussen says. "The volume of material that an agent needs to know today is astonishing, and it has to come first, before relationships."
That model doesn’t appeal to many of the salespeople who trained and did business for years in the relationship sales model. "The gray-haired people at the meetings say they can’t believe all of the work in selling today," Rasmussen says. "I think the old guard is going to cash out, if they can."
If they don’t leave, Starkman says, they may be pushed out. "If these people don’t adapt and learn the current environment, they are going to die, because those that do adapt and learn will eat their lunch," he says.
Today’s training — or lack thereof
Those older salespeople will retire — either now, in response to the changing market, or in a few years, when they might have retired anyway. The sales force that takes their place will not have had a similarly intense training. Some of them will have had no formal training from anyone.
"There are very few agencies now that have any kind of formal training at all," Trokey says. "I can’t tell you how high the failure rate is in new hires in this industry. We ask people to commit their careers to an organization, but we don’t give them they tools they need to succeed."
Lenhoff agrees. "I don’t see any of the companies I do business with putting any resources into training the sales force, and at the same time I see them scrambling to find new sources of sales," he says. "Their plan is to offer good salespeople top dollar and figure that they’ll get their training somewhere else. They don’t see the disconnect there."
Those untrained new hires would have a tough time in the insurance industry of 30 years ago, but they’re really in trouble today. The medical loss ratio requirements of the Patient Protection and Affordable Care Act are driving down commission rates, Trokey says, so salespeople are working harder to capture their parts of a smaller commission pot.
"I just talked to someone whose agency is down 25 percent just on commission cuts," he says.
Keeping current — and looking ahead
There is value to offer and money to make in the benefits insurance industry, but today’s salespeople will need specific ways to access it.
First, Starkman says, benefits professionals need to accept that the changes in the industry are likely permanent.
"Some people still don’t believe that the Affordable Care Act is going to stick," Starkman says. Even if PPACA isn’t the final word on health care coverage in the United States, the industry is almost certainly not returning to the version of the world that preceded it. The future will only be more complex — not less.
Based on that acceptance, salespeople must invent new ways to play on the new field.
"The consultants and brokers who survive health care reform will be bringing more value to their customers than we’ve seen before," Trokey says.
They won’t just provide benefits; they will find ways to help end clients improve their overall businesses. In addition to commissions, some salespeople will earn consulting fees.
"You want to be a concierge of advice, not someone who comes in twice a year," Rasmussen says. "A lot of brokers have a ton of information about human resources, hiring, payroll, and other business issues. Those things don’t tie to a specific product they sell, but they can still be a consultant on those issues."
If agencies are going to survive, they will have to bring value in ways that they never have before. They need a process. Up to this point, Trokey says, they’ve been able to get away without having one.
Ideally, that process would involve structured sales-training programs for new hires, offering both fundamental skills for those who are new to the industry and a refresher course for old hands. Lenhoff notes that Northwestern Mutual, Guardian, and New York Life all offer salespeople solid training. He hopes that more firms will join their ranks.
If agencies don’t step up and provide training, salespeople will find their own resources. "There are training programs, books, self education," Trokey says. "I don’t think there’s just one way. You have to commit to being a professional. If you want to sell effectively, you have to commit to lifelong learning."
Finding and paying for a sales training program is one option; books, blogs, and other online information are other good sources of expertise.
Partnerships are another way to gain skill and knowledge.
"We recognize that salespeople are not necessarily experts, so we brought in people who are nothing but experts and can sit side by side with salespeople who have all the other ingredients," Starkman says. "Those two people work as a pair for a while, and the salesperson learns the subject matter. Salespeople are never the best and most highly qualified experts, but the salesperson has to have at least a competence in the subject matter area."
Industry and sales-specific professional organizations can help, too, sometimes by arranging mentorships and peer groups. There’s a lot to learn in deliberate groups of mutually supportive salespeople, Trokey says.
"Groups bring people together to network and share ideas and resources. They ask questions and answer questions. If you don’t have a group to lean on that’s going through the same struggles, you make things harder than they need to be. That’s a fool’s game."
The best groups, Rasmussen says, combine salespeople from territories all over the country, so that members aren’t naturally competing with one another.
"I know a group of about a dozen folks who originally all worked for the same company, and they still get together a couple of times a year as a mentorship group. And they’re rocking it. In their category, they are feared competitors. They are looking toward the future and developing new strategies."
"Today, a salesperson has to take responsibility for educating themselves. They need to read, go to conferences, and have groups that can give advice without eating their lunches. Nobody owes them a living," he says. "The people who continue to develop their skills and act as consultants are the ones who are going to succeed."