A Crash Course in crushing it for new insurance agents

It pains us to say it, but breaking into the insurance biz might be riskier than opening a restaurant. According to our research, 50 to 80% of new agents aren’t selling insurance three to six months later.

“The failure rate is enormous”
David Duford, veteran insurance agent

David, the author of three books, including “The Official Guide to Selling Insurance for New Agents,” estimates that 90 to 95% of new agents don’t last a whole year. And they don’t even need to buy industrial-grade refrigerators and pray that they’ve calculated the correct amount of avocados to buy.

We do mean pray. By our calculations, the avocado freshness window lasts about 20 minutes between ‘rock hard’ and ‘too mushy to even throw in a smoothie.’

New agents tend to fail because they’re recruited into the business under pretences and aren’t informed on their options. Or they don’t understand how insurance products and markets operate. They’re prone to jump in without doing a ton of research and introspection.

Thats where we come in.

Vanillasoft’s Director of Product Marketing (and in-house insurance industry expert) Bergen Wilde invited David Duford for real talk on what it takes to become a top performer. Bergen and David hosted a webinar focused on:

• Understanding insurance markets and products

• How to find a great agency (and what to run screaming from!)

• Ways to fill your funnel and improve your confidence

• Why self-master is crucial for your success and your sanity

David Duford

Owner

David Duford owns DavidDuford.com, a virtual insurance agency helping new and experienced agents nationally become top producers in final expense, Medicare, and annuity sales. He is the author of 3 best-selling insurance sales and marketing books, including “The Official Guide To Selling Insurance For New Agents, “The Official Guide To Selling Final Expense Insurance,” and “Interviews With Top Producing Insurance Agents.” David is also a YouTube Influencer in insurance sales with nearly 14,000 subscribers and more than 1.7 million total views.

In sales (and in life), it’s absolutely critical to approach new opportunities with eyes wide open. And it’s more important now than ever. Options abound, and each agency or niche market tends to position itself as the best in the industry. But many times, the truth doesn’t live up to the hype.

Time to hit the books, kids. Er, fire up the Google machine. Research the companies you’re considering, and dive deep into the markets that those companies represent. Consider your strengths and weaknesses to determine what’s right for you. Above all else, trust your gut. If it smells fishy, it probably is (see below). And remember:

This is a get-rich slow business, not a get-rich quick business

New sales reps are often brought into an agency environment with “a lot of rah-rah and Kool-Aid passed around,” says David.

But if you’re considering a company that boasts about making passive income through recruiting people in your network (ahem, your circle of influence), that’s suspicious. Or if you come across a business that spends an inordinate amount of effort (we’re talking more than 10% of their time) explaining how its leaders recruit their way to success, think twice before joining. It sounds like you might be dealing with a multi-level-marketing (MLM) company.

David doesn’t have a problem with the MLM as a structural idea. All organizations are like a food chain with leadership at the top and plankton (sorry, team members) at the base. The insurance industry is no different. But the big issue with MLMs is that they place value on the wrong things.

How to spot an MLM

• A culture of mass recruitment

• Complex commission structures

• Claims of high returns in a short time period

• A mandatory buy-in

• Numerous Ferraris, Porsches, and other forms of conspicuous consumption in the parking lot

• You’re promised a Rolex (or the guy who runs the company shows off his Rolex)

You need to start by having a psychological understanding of how your particular insurance market works.

For example, products in the senior market include life insurance, final expense coverage, supplemental Medicare plans, and financial planning tools like annuities.

Regardless of the market, most insurance products are long-term purchase decisions. That’s especially true for life insurance. People buy it because they want to protect their family and/or want to leave money behind.

For most, it’s a lifelong financial commitment. It's not like paying off a car or a home, where you eventually reach the end of the line. Most life insurance products require you to pay premiums until… Well, until they payout.

So the customer needs to make an indefinite commitment that will possibly (hopefully) cost $50 to $100 a month for decades. It’s a really big decision.

David started in the insurance business in 2011, during the Great Recession. His clientele was middle- and upper-middle class. Things were going great until uncertainty took over – not necessarily because they fell on hard times but because they were afraid of what was to come.

“When people don’t know what the future brings, they stop spending money,” he says. “It just makes sense.” Ring a bell? We’re in a similar circumstance right now.

In the age of COVID-19, David found that even people who earn a good living are questioning whether or not they feel comfortable with a lifelong purchase. After all, does anyone know what’s going to happen in the next few months, let alone next year? Much of that feeling still resonates today.

You might sell a policy today, but what if your client cancels six months from now because they got laid off? That’s always a concern, even in the best of times. But it’s particularly worrisome now, when a recession, if not a depression, could be coming ‘round the krazy korner. That’s why David cautions everyone who’s thinking about jumping into this business.

Ask yourself: Is this product line something that has resistance to a bad economy or turbulent times?

His agency focuses on the senior market. His clients are baby boomers, the vast majority of whom are retired, disabled, and/or draw a fixed income. But they’ve already worked to make their money. Now, they’re in a position where the government pays them, regardless of the economy.

“It would take, literally, civilizational upheaval – for the government to collapse – before Uncle Sam stops cutting checks,” he says. [Fingers and toes crossed.]

So there’s a much higher level of certainty amongst his client base. They’re not afraid of buying a long-term policy because they trust that they’ll continue to get paid.

From a business opportunity standpoint, that translates into more certainty for the agent that their customers’ policies will stay on the books. Plus, there’s a huge number of people in the senior market, and it will keep growing every day for the next two decades.

That’s why it’s crucial to ask questions about the products you plan to offer. If you sell a policy that’s dropped in a month or two, it’s a waste of time – all that work for basically nothing.

David’s aphorism is: The policy that pays is the policy that stays

Training and support are crucial in learning the craft of selling insurance. You should be part of an organization that values knowledge transfer, and that will help you personally become not just competent, but better over time.

Look for an organization that offers a structured training regimen, whether it’s one-on-one or in groups. Either can also take place online – whatever is accessible and appropriate. There should be several avenues to learn about the product and the niche it’s in.

The agency should provide some form of marketing training as well. If you don’t know how to get in front of prospects who will appreciate what you have to offer, you’re already out of business.

As we say in this business, you have to have people to see

A marketing strategy will likely include cold calling and a process for reaching out to your existing warm market. In David’s case, it means purchasing leads via Facebook and direct mail.

Look for agencies that use sales and marketing systems that are already proven. No agent new to the insurance game should be a guinea pig. Ask how their marketing system performs, and for specific examples of success. Investigate the training process and professional development opportunities. You should get confident answers. If not, that’s a red flag.

This is a boring old business. People have been doing it forever, and they know how it works. It’s rinse and repeat

You need an agency that gets that. It should have time-tested strategies that are proven to maximize results. All you should have to do is run with them. “There’s no reason to reinvent the wheel,” he adds. Because he knows what works, he looks for agents “who have the discipline and the humility to apply” what he teaches them.

The backbone of this business is leads: Where to find them, how to approach them, and how to turn them into lasting customers. So as a new agent, what should you expect from your company in terms of leads generation and management? First, for the uninitiated, leads take several forms:

Real-time: A potential client has just expressed interest, usually by filling out a form on the internet looking for a quote.

Aged: The prospect expressed interest days, weeks, months, or even years ago.

Recycled: Another company already bought these leads once; they’re worked back into the system for others to purchase.

The best lead to purchase is one that’s fresh and exclusive to your firm. And again, your organization should have some sort of system in place. New agents often receive older leads or are tasked with contacting prospects who’ve already said they’re not ready to purchase. The idea is to use them for rookie training – to practice talking on the phone, leaving messages, and using a lead management system.

But David doesn’t see a lot of value in that, at least not for training. Aged or recycled leads are more affordable, and they’re not impossible to convert. But “it’s just much harder for the average agent,” he says. In any case, don’t buy (or follow) any leads without a grasp of their pros and cons.

“This is a deceptively difficult profession,” says David. “And your biggest competition is yourself.” The insurance industry is a tough one to be in for many agents. Heck, even the most successful agents fight the urge not to knock on the next door after having the last one slammed in their faces. That’s why self-mastery is paramount to success in the insurance business. Determination, discipline, and initiative are the key ingredients.

On a daily basis, most agents’ primary purpose isn’t to see their customers. It’s to be on the phone or IRL with prospects – selling. At the peak of his face-to-face sales career, David would often book his first appointment at eight in the morning, and his last at eight or nine o’clock at night, with the goal of talking to 12 to 15 prospects a day.

Your personal goals may differ, but he encourages his team members to log at least 15 completed appointments per week. Generally, the ones who hit that metric find more long-term success than those who don’t. David reiterates that proven systems are simple. The complexity of sales lies in handling yourself – staying motivated despite the setbacks, staying focused on the process, and scaling it to the level you want.

The best insurance agents know where the money is: in front of prospects.

They fight to see as many people each and every week, knowing that most of them probably won’t buy. But that’s okay, “because it just takes a handful of clients to make this a really lucrative business,” he says.

When a potential client declines to buy, they’re not rejecting you. They’re rejecting the product. How could they reject you? They don’t know you.

The power is in caring but not too much,” says David.

The best way to deal with rejection is by having enough people to sell to. The best position to be in is having too many appointments. In the parlance of “The Hunger Games,” the odds will be ever so much in your favor. And like Katniss Everdeen, you’ll gather more confidence and strength with each victory. But it will happen much faster if your calendar is booked solid.

Even if you’re pressed for time, it doesn’t matter. If you’re logging 15 appointments a week, who cares if one person is rude to you or wastes your time? It matters much more if it’s one out of five because then the odds are stacked against you.

You’ve done your research. You know all about the companies you’re considering joining, and the insurance market they operate in. You have a product that has resistance to a bad economy.

You’re looking for an agency that offers continuous training and fool-proof sales and marketing management systems.

You’ve learned the pros and cons of all types of leads. And you’re working on how to deal with rejection.

You’ve also got laser focus. Stellar self-discipline. Mountains of motivation. A healthy dose of humility. Focus. (Did we mention focus?) “This isn’t rocket science,” says David. “These are very simple systems. Simple, but not easy.”

He’s right, folks. So, take the leap. But it shouldn’t be a leap of faith. Do your homework, roll up your sleeves, and get to selling!