I would like to examine the expanding market with small business owners and how the skills developed in selling life insurance can be used in the area of employee benefits.

I want to leave you with transferable sales ideas and outline how to develop a consistent flow of level monthly commission, provide a flow of prospects for new business, and an effective way to build trust and rapport with self-made millionaires.

Everywhere we turn today it seems the topic is millionaires. Through the work of Thomas Stanley in two of his books, “The Millionaire Next Door” and “The Millionaire Mind” we learned that most people who accumulate wealth, do it through ownership of small businesses.

Uncovering and identifying our prospect’s needs and objectives is the most important part in the process of the sale of life insurance. I believe that most small business owners appreciate the idea of shifting risks to insurance companies to protect what they have accumulated. If we position ourselves in the marketplace as what we really areself-employed or the owner of a small businesswe will have much more credibility when call on our prospects.

By sharing what we have done to attract quality employees and to minimize the risk in our own businesses, we can demonstrate our role as an experienced advisor.

There are 3 stages of any sales presentation. The first is Needs/Objectives, the second is Features/Benefits, and the third is Cost/Price. If we spend one-third of our time with our prospects in each stage we are making a big mistake. We need to focus and spend most of our time on the first stage of needs and objectives.

Until the prospect clearly understands his situation and recognizes his particular needs, there is little likelihood they will be impressed by the features and benefits of any product.

Secondly, insurance companies have many times trained agents to focus on the features and benefits of a product and while it is important, it seldom motivates prospects to make a purchase.

The third stage, cost and price, speaks volumes to our client, but the less time spent in this area, the more effective we become. Most objections have a foundation in price if we are talking to the right people.

We need to spend the large majority of our time in the first stage because needs and objectives can outweigh the price in a prospect’s mind if they are properly communicated. The price usually outweighs the features and benefits unless clients recognize they have a problem in their current situation.

When you think about it, most of the sales people who call on small business owners, are promoting tangible products and tend to move quickly into the features/benefits of their product. We have all heard that people make the buying decisions based on emotion and rationalize to justify why they made that choice.

One of the primary things we must do in the process of selling life insurance is getting our prospects to focus on their long-term objectives. If we help our prospects to realize what their needs are and what they are trying to accomplish, we provide an invaluable service.

When we approach the small business owner as an equal and discuss his needs/objectives, we separate ourselves from most of the competition. We must understand the problems of our prospects. We have all heard that it takes guts to sell life insurance, because we have to discuss the problems that a family has when the breadwinner dies. Play to your strength and the experience you have discussing the hopes and dreams of your prospects and clients.

When discussing the solutions to their problems, you must present all of the ways to solve them and insurance is only one way. By intelligently discussing all of the available means to address their problem and presenting insurance as one of the several options you maintain your position as a first class advisor such as their attorney or accountant.

Insurance should be presented as a generic solution. Your prospects expect you to know the insurance solution, so you gain credibility by discussing the non-insurance solutions and then contrasting and balancing the way to solve it with insurance.

If you move too quickly to the features/benefits, you are delegated to the role of a spreadsheeter or price shopper. The cost/price will outweigh the feature/benefits in the clients mind. If the needs/objectives are clearly established and the problems understood, they will outweigh the cost/price.

Small business is the growth engine of the U.S. economy. Most of the new jobs are created by small business. The owners, most of the time, do business with other small businesses. If you can demonstrate your ability as a problem solver, getting referrals to the suppliers and customers of the small business owner becomes much easier. The number one problem of small businesses is attracting and retaining quality people. The tight labor market and an expanding economy has made it increasingly difficult to fill the positions that are open in companies. Employee turnover is very costly.

If we understand that a properly designed and communicated employee benefit program can help solve or minimize these problems and make that the central theme in our presentation, we will be much more effective when working in the small business market.

Not only are you providing a valuable service to the small business owner, but also group insurance can improve your practice by providing a consistent source of level monthly commissions. Since group commissions are not annualized, the regular monthly cash flow allows the means to add staff and computers to build your own practice without incurring debt or waiting until after closing the next big case.

Group disability and group long-term care are ways to build revenue without the administrative time required for group health claim problems and renewal premium increases. Having a professional administrative staff to answer questions and address service issues is absolutely a must.

I have built a team and on my business card I have the four members of my staff who assist me. I list my department manager who handles individual life and disability, and we have worked together for over 12 years. Retirement plans are handled by a professional who has her CLU & ChFC and has over 20 years of industry experience.

Often, group health insurance is the first coverage purchased. During the initial period when we are establishing our relationship, things must go well if we are to handle the rest of their business in the future. This is key, because if all I were going to handle was the group insurance, then I am not interested in the relationship. I let my prospects know very early that I want to earn all of their business.

Our group insurance specialist has over 10 years of company experience and has been with my agency for 3 years. My executive assistant has strong organizational skills because I do not. I sell myself and the outside salesman for this professional team. Having all of the members of my team on my business card establishes how I work and lets them know what type of experience I bring to assist them. It also demonstrates very early to my prospect that I have and retain a quality staff.

Voluntary payroll deduction products offer a way to sell insurance in “bunches.” There is a constant flow of new prospects for new business when your business clients experience growth and hire new employees. This can be handled by splitting business with companies that specialize in employee benefit communication and offer a choice of options for additional coverage. The added value to the small business owner is that their employees will receive a review of their benefit package that is normally available only to large employers.

Because of the number of different issues that you will handle for small business owners, you will be in constant contact with them. This is an effective way to build trust and rapport as a problem solver.

After you have established your credibility in the group insurance area, ask the owners to review their buy-sell agreement. Ask and get the commitment that as a result of your work, if additional coverage is purchased, they purchase it from you. I call this the “deal before the deal.” This can generate substantial commission revenue and lock out the competition before they are aware that a purchase decision has been made.

Be selective on the business prospects you choose to quote. Depending on the quality and growth potential of the account you can be selective on how intensive your marketing efforts will be. By asking the right questions on the front end you can have an accurate profile of which type of presentation is appropriate.

Some prospects warrant a detailed review of the marketplace, while other accounts will only require one quote with the insurance carrier you know to be the most competitive. The key is having enough prospects in the pipeline to let the marginal one pass and those that appreciate the value of what you bring to the table receive the most time and attention.

Communication is critical in presenting employee benefit plans. The primary area is to the decision-makers and the secondary area is to the employees. I incorporate PowerPoint in most of my presentations. Many times I find myself in a meeting with several people involved in the decision-making process for the business. The level of understanding may range from the big picture perspective of the owner who is not detail orientated and may not know what a co-pay is, to the analytical accountant/bookkeeper who has specific questions in every area.

I have found that when making a presentation on PowerPoint I can control the flow of the presentations and introduce each concept or product in specific steps to insure the same level of comprehension.

I start the meeting with the comment that they will receive a printed copy of everything that I will be reviewing at the end of the meeting. I show them the stack of copies of the presentation, but I do not hand the copies out until after the PowerPoint presentation is over. I know this sounds very basic but it has been my experience that if you hand out copies of the presentation first, they start reading and flip to the last page to see the cost.

After I tell them they will receive a printed copy of the presentation everyone usually relaxes because they don’t have to take detailed notes. In other words, they start to listen instead of writing or reading ahead during the presentation to find the cost. This allows you to control the speed of the presentation and focus on the critical issues.

Building a practice with small business owners is rewarding and challenging. The market is accessible and one of the fastest growing. By using a team approach with a combination of in house staff, insurance company personnel and other experienced producers, you can effectively compete in today’s marketplace.

Working with other employee benefits producers will help shorten the learning curve and allow you to share in commission revenue much sooner. The price of learning on your own is expensive in the form of time and frustration. Group carriers are cyclical in their pricing for new business. It is important to understand the track record of past rate increases and the quality of claim processing before you build a book of business with a carrier. Retirement plans are complex and are constantly changed by legislation. Joint work with specialists may be the first step in getting involved.

Challenges present opportunities and there are many advantages in the small business market. The growth of this market in general and the growth of your clients can propel you to new levels of profitability.

John E. Schneider, CLU, ChFC, is with Principal Coop, Love & Jackson, Inc., Nashville. He cam be reached at jschneider@cljinsurance.com. This article is an abridged version of a presentation he gave at the MDRT annual meeting in Toronto.


Reproduced from National Underwriter Edition, June 22, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.


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