Make Medigap Marketing An LTCI Profit Center

By

Years of working with many producers has taught me a lot of thingsthe most important being that sales ability alone is not the primary factor distinguishing those at the top of the income ladder from those on the bottom. It appears that the primary difference between producers is simply the number of qualified prospects to whom they get to make presentations. This brings me to the conclusion that marketing and prospecting are always more important than actual sales skills.

There is an exercise I like to do in sales management training classes that never fails to prove this point. I ask people to list the top-10 producers they have ever known and then to list the 10 best, pure salespeople they know. Interestingly, the names on these lists are never in the same order, and most often they dont even contain the same names. So, if top producers are not necessarily the best salespeople, the reason for their success must lie elsewhere. Evidence suggests it can be found in either the number of presentations they make, a larger average volume per sale, or both. The first is a reflection of the number of prospects they generate, and the second is the quality of those prospects.

Based on this information, one would think that salespeople always would be looking for better prospects through better marketing. Yet when I ask people, whether its a front-line salesperson or a vice president, what they are doing in the marketing and prospect arena, I hear the same time-proven, tried-and-only-moderately-successful prospecting and marketing ideas. Not only do these ideas seem to run in cycles, but almost all salespeople and sales organizations seem to be at the same point in the same cycle at the same time. Its mass mailings, seminars, cold calling, target marketing or using some sort of centers of influence for referrals. Bottom line, they all work (to some extent) and all are time-consuming and expensive.

Being a true believer in the concept that success is most often rooted in the ability to be first, different or better, I cant think of a place where a fresh approach is needed more than in the world of marketing and prospecting. With that in mind, allow me to share a marketing/prospecting idea that will not only provide you with qualified leads, but will, in effect, pay for itself.

The opportunity here can be found in what appears to be a producer/product gap in the senior market. Im not sure why this is, but after doing some homework, heres what I found: The vast majority of producers who sell annuities and long term care insurance dont sell Medigap policies. Inversely, almost all people we surveyed who use Medigap polices as their main product told us they dont sell annuities or LTCI.

Having heard numerous reasons from both sides of this equation, Ive yet to hear one good reason as to why this gap exists; after all, all three are mainstay products within the same market. Our conclusion is simple: Where there is a void, there is an opportunity.

Obviously a good percentage of the people who buy Medigap policies do not qualify as prospects for annuities or LTCI; nevertheless this prospecting method provides annuity and LTCI producers with an extremely advantageous marketing approach.

What producers might want to take into consideration is that using Medigap leads to identify qualified prospects for annuity and LTCI sales will pay dividends in at least 3 different ways. One, it will get your name in front of a lot more people in your target market (just because someone isnt a prospect doesnt mean he or she cant refer one to you). Two, it will provide you with the opportunity to identify qualified annuity and LTCI prospects. Three, it will generate Medigap sales, which by themselves will more than pay for your prospecting and marketing efforts.

The reason for this is that every senior qualifies for Medigap, and they have an open enrollment period in which to buy. The biggest factor in most Medigap sales is the premium the prospect can or is willing to pay. (For the most part, people tend to buy the best benefit package they can afford.)

Therefore it follows suit that in order to provide the best possible solution for the needs of Medigap shoppers, a professional will ask some qualifying questions about income, assets and health. The fact that their answers also will tell you whether they are annuity and/or LTCI prospects is a side benefit rarely put to good use.

The truth is that you will end up selling a lot of Medigap policies to people who dont have a need for annuities or LTCI; nonetheless, you will have made more than enough money to cover your marketing expenses. The big advantage of using this program is that you will also run across people who would be well served by your expertise in annuities and LTCI. By using a short, yet simple fact-finder, you will be able to identify warm annuity and LTCI prospects, both of which will provide you with opportunities to introduce ideas on the advantages of annuities and LTCI.

The easiest, most time-efficient and cost-effective way to put this in place is to buy a Medigap lead generation mass mailing program. We have found that the results from mass mailing campaigns are pretty much the same, generally running between 2% and 4%. This most likely can be attributed to the open enrollment period aspect of Medigap insurance.

Of course, this marketing approach requires a certain amount of studying for those who dont have a background in Medigap insurance. Fortunately the time required is not prohibitive, and the professional and financial rewards that will result from using this marketing/prospecting program will prove to be well worth the effort.

You can start by getting a copy of “Choosing A Medigap Policy: A Guide To Health Insurance For People With Medicare,” jointly developed by the Centers for Medicare and Medicaid Services and the National Association of Insurance Commissioners. For the most up-to-date written version, go online to www.Medicare.gov.

is a senior partner with CCG-Capital Consulting Group, LLC. He can be reached at jneal@ccgcap.com.


Reproduced from National Underwriter Edition, April 29, 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.