Building Solid Relationships Is Key To African-American Sales
I have found that selling insurance and other financial products and services to African-American consumers is not significantly different from the approach to other groups. However, there are nuances of differentiation that should be kept in mind.
It is important, I have found, to build a solid relationship with any clientAfrican-, Asian-, European-, Hispanic-American, or any other group. I think it is also necessary to bring a level of education to any client depending on the clients economic status, education level and previous familiarity with the world of finance.
In my experience, the key to African-American sales is building the relationship. I have found that if you build a relationship with black clients, they will trust you. I believe that if you meet black people where their needs are and develop from there and if you are willing to spend time educating and building trust, they will be loyal clients.
I have carved out a specialized marketing niche in which I focus on the faith-based community, serving the financial needs of religious leaders in 39 states. Often, the church and other faith-based organizations are the keys to revitalizing cities and breaking the cycle of poverty.
My affluent African-American clients, especially the Generation-X or late baby boomer generation, are more likely to have more than a basic understanding of the need for long-range planning for financial security. For them, insurance products are part of an overall plan and not just a transactional purchase. This group also is more concerned about making sure their investment and savings dollars will efficiently meet their financial objectives. They tend to look for assistance from a financial professional as a necessary step in helping to provide security, transfer wealth, accumulate assets and ultimately minimize tax burdensonce again very similar to other affluent groups.
I also have found that my African-American clients who are in less affluent financial situations are motivated by an embedded knowledge that insurance is a basic need so that they are not a burden on their families when they die. But they do not have a sophisticated knowledge of the different types of insurance products available or a foreknowledge of the need to create a financial strategy that will serve them in retirement and help them save for their childrens higher education.
My approach has been to listen to them tell me about their expectations for themselves, their families and future generations. I ask them more in-depth questions than I would people who are familiar with financial products and services.
Regardless of economic class, the African-American baby boomer generation, particularly the first wave, tends to be more concerned about fixed investments and security. They feel more comfortable with putting their savings in a guaranteed product, even though the interest rate may be lower, because they have the security of knowing the money is there and not likely to be lost in an unfriendly economic cycle.
On the other hand, the younger generation is more in tune with the volatility of the market. They know that while bank savings accounts and certificates of deposits are insured by the Federal Deposit Insurance Corporation and offer a fixed rate of return, the return and principal value of other investments will fluctuate with changes in market conditions. However, they are not afraid to expose themselves to risk. There are a number of reasons for thisthey tend to be better educated than their parents and grandparents; they have been exposed to the myriad news accounts of the economic environment; and they have had the benefit of initiatives that have been designed to educate African-Americans about Wall Street to get them off the sidelines and into the game.
I think that as African-Americans have achieved greater entr?e into mainstream American economics, education and corporate America, they have gradually become more knowledgeable about personal finance and wealth building. Parallel with this has been the rise in discretionary income and the ability and willingness to invest in riskier investments. As African-Americans have become more familiar with mainstream economics, they have behaved very similarly to their white American counterparts.
When it comes to long term care insurance, many of my African-American clients are more likely to see its value because many of them have seen relatives and friends become debilitated by diseases like diabetes, high blood pressure and stroke, and they have an appreciation of what it costs to take care of an ailing family member.
I also have found that African-Americans feel more comfortable working with African-American financial services professionals. I know of instances where white American sales professionals were able to get their African-American clients to spend much more money than they were originally planning to spend because the client did not want to appear stupid, poor or unsophisticated. Often in those instances, the policies lapsed because they were more than the client could afford. But when they deal with African-American sales professionals, they feel they will not be judged negatively if they say no.
As an African-American man selling to African-American clients, if I want them to buy something that my analysis shows they need but are reluctant about, I will sell them what they think they needthat is as long as it is suitable to their financial situation. Then, as we build our relationship, I am able to get them to the point eventually where they are willing to buy what they really need to help meet their financial goals.
With many African-American clients, I have found it is very important to spend more time discussing and prioritizing the various optionsincome replacement to maintain their standard of living, saving for college costs for their children, mortgage protection and the need for retirement planning.
For example, in a 20-year relationship with one of my clients, we prioritized the familys financial needs and started out with a small policy that would replace the clients then-current salary if he died young. Later we attended to his mortgage protection needs. Later we addressed his retirement needs. Tragically, this client died of brain cancer at the age of 44. His widow was very grateful that I had taken the time to build a relationship with them that continually addressed more and more of the familys financial needs. Because I did, she is in a position to continue to offer their children the lifestyle and standard of living to which they were accustomed.
Communication also is an area that has to be managed correctly. Many times a client may be unresponsive to you simply because he doesnt understand the language of finance and may not be willing to say so because he is afraid you will think less of him. This, of course, is true of any client regardless of their racial or cultural background and even their economic status.
I challenge my clients to think about not just their future but the futures of their childrens children. I get them to dialogue with me, to share their dreams and expectations with me, and tell me the things they worry about.
is an agent with Prudential Insurance Company of America and a registered representative with Pruco Securities, LLC. Hicks is based in Atlanta.
Reproduced from National Underwriter Edition, May 7, 2004. Copyright 2004 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.