Success. In the past, the word called up images of the “man in the gray flannel suit” from the 1950s and the “high-tech bubble” of the 1990s.
Today, a lot of financial practitioners I know would settle for “black ink flowing.”
Despite news of improving corporate profits and an upward moving stock market, sales of various insurance lines and financial services are still dragging. So, they ask, where is the road to success?
Invariably, someone points to new product strategyi.e., using innovative new products to attract new sales. “We cant keep selling the same policies, especially in this tough economy,” proponents say. “New products will give us a new story to tell.”
Not so fast, say critics. If youre going after product, youre flirting with “product pushing,” they charge. That is, youll end up hustling one product or another with nary a concern for the clients unique needs, preferences and situation.
“Financial practitioners should put the customer first at all times, regardless of the economy,” say these observers. “When you do that, you will gain success for your client as well as yourself.”
Who is right, the Product Searchers or the Consumer Firsts? Lets unpack it.
The Consumer First group gained a lot of momentum in the late 1990s, when employment was full, clients were investors, and new product vendors seemed to be on every street corner. These guardians of the industry wanted to stop all the spinthe product pushing, as they called itand redirect practitioner efforts towards meeting client needs.
It is hard to argue with the Consumer Firsts, especially when recalling the financial hustle of the 1990s. If the advisor does not meet the customers needs, the short-term win (of selling product x, y, or z no matter what) can only lead to long-term dissatisfaction, bad word of mouth, and perhaps litigation.
But, as you know, this is a different economy. Today, the tight purse reigns, new product development is in second gear, and markets for some products are thinning out. Today, advisors who are Product Searchers say they do not have roomfuls of customers swarming around, “needing” places to put their money and ways to preserve it.
Customers still have needs, they agree. But now these needs seem to be expressed in reverse. Many people, they say, now say they “need” to stay away from investing (which they deem a frivolity), and away from insuring (which they deem a luxury).
As a result, broaching the subject of financial needs often falls on deaf ears, say the Product Searchers. But sometimes, they add, discussion of a brand-new product can at least open the door.
This is where the discussion gets a little delicate. In todays market, the Product Searcherswhether commissioned, fee-and-commissioned, or fee-onlyhave been forced to admit they have to engage in some form of marketing to bring business into the house.
I say “forced to admit” because, as some tell it, they had previously seen themselves as a professional, one who does not overtly woo clients. Many say that in the 90s, they never had to market or even think about sales. Some thought of themselves as being “in service,” not sales. Business came mostly from referrals, and clients said thank you.
No more. Ive had countless conversations with advisors who say the recession brought them up short. Many tell how they were stunned to learn that they needed to do marketing and develop sales skills, just to stay afloat.
From where I sit, these advisors do not appear to be product-pushers. Rather, they are functioning as “product positioners,” or experts who concentrate on finding products that position well with their chosen market and in the current environment.
They say they absolutely adhere to the principle of putting clients needs first, but still must generate business that sustains and grows the practice.
Hard-core product-pushers will probably never go away. Just a moment ago, for example, a fax came into my office touting a hot new health insurance dealmedical, dental, vision and prescription drug coverage, all for a family rate of just $60 a month! You and I both know that such a deal is too good to be true.
Yet the new breed of product-searching advisors do not appear to be of that ilk. From what I can tell, most take a sober, customer-focused approach to their searches.
Some call here wanting to see if we know of a market for such and such product. Some want to know if we know of a provider who will wrap a certain kind of exposure. Some ask if we know of a carrier they can use in place of one who has just withdrawn from a market. Some say a clients policy was just sold to another carrier with a lower rating and do we know of a higher-rated carrier to consult?
In evaluating this issue, it helps to consider the larger picture, too.
First, many products today are more efficient for agents to sell and easier for consumers to grasp. One example is the introduction of front-end technologies to products (see NU, Sept. 15 for a story on this.) Another is the greater simplicity many new products offer today. Practitioners who do not make use of product advances like these risk leaving clients stuck in inferior products–and losing business to competitors who use the features.
Second, many clients prefer dealing with experts who keep abreast of their field and are choosey about what they offer. If you are not actively scoping out the latest advances, eventually clients will find outand some will go elsewhere.
Third, what sold well in the 1990s will not necessarily sell as well in 2003. Today, policies with guarantees, simplicity, and lower internal costs get more wow than many older products. But how can advisors know whether to go with the new or the old unless they check it out?
Advisors who mindfully search for new products in this way are hardly product pushers. In my book, they are closer to wise veterans.
Reproduced from National Underwriter Life & Health/Financial Services Edition, September 19, 2003. Copyright 2003 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.