Life Insurance Sales Strategies: 3 Reasons to Cross-Sell in 2016

life-insurance-sales-strategiesHow would you rate your cross-selling efforts? If you are like many independent producers and agencies, cross-selling may not be getting the attention it deserves. So, why not change your cross-selling results in 2016? Below are three reasons to make cross-selling a priority this year, along with some tips to help you become a cross-selling champion.

1. Clients share similar approach to risk – Clients who buy life insurance are planners and usually financially responsible. They are able to envision future risks, understand the need to mitigate these risks and seek smart solutions. These traits are also found in buyers of disability insurance and long-term care insurance. According to LIMRA, trust is one of the most important attributes consumers assign to a relationship with a financial professional. In fact, 9 out of 10 consumers believe their advisor recommends products specific to their individual needs.

2. Increase revenue economically – Successful cross-selling is a proven path to organic growth. Deloitte & Touche quantified the sales success rate when approaching a new client and an existing client. An existing client is more than three times more likely to buy from you than a new client. Plus, current clients spend more than new clients – as much as 67 percent more, according to Chartered Institute of Marketing.

3. Increase value of your practice – The sale of each additional policy increases the value of the client to your practice, and by more than just the revenue earned. A client with a single product with your agency has a retention rate in the mid-50th percentile. Adding one additional product increases client retention rate to almost 70 percent. Cross-selling improves retention and retention drives down operating expenses. According to Leading on the Edge of Chaos, expenses are reduced by 10 percent for every two percentage points retention is increased.

How to become a cross-selling champion

Although the economics of cross-selling are indisputable, adding cross-selling to your sales process may present a challenge. You may have resolved to increase your cross-selling efforts more than once before. You are not alone. Addis Intellectual Capital surveyed more than 5,000 financial professional about their cross-selling practices. Sixty-three percent admitted to not having a cross-selling process or to not using it consistently. Here a few suggestions to help you make cross-selling second nature in your practice.

  • Formalize your sales process – if you haven’t already, document your sales process.  You may not even be aware of your process but you have one. Then take time to enhance your process by adding some of the suggestions below.
  • Take a holistic view – The more about the client’s financial situation you know the more valuable your advice will be. Think of a client appointment as an engagement not a transaction. The immediate goal is to deepen your professional relationship. Cross-selling is a long-term play that will bring rewards. In a series of follow-up conversations, introduce disability insurance as part of retirement planning. Planning for long-term care expenses in retirement is a natural continuation of that conversation.
  • Use technology – if you have a CRM system, use it to identify clients most likely to benefit from additional insurance products. Initially, look for all clients with only one product. Identify those most likely to need disability insurance such as business owners, self-employed individuals, and those employed by companies that don’t offer DI. Next round, focus on clients nearing retirement to discuss long-term care insurance.
  • Set client expectations – Cross-selling happens over time. Don’t overwhelm clients by presenting everything at once. Tell your clients there are several financial risks you want to discuss with them over time. Then follow through.

Ready to make a sale? Brokers Central gives you access to the top life, disability and long-term care carriers. We will support your sales efforts every step of the way – from case design to close. Let us know how we can help you cross-sell more effectively in 2016. We’d love to help you earn a vacation via our VIVA 2016 program!

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