A Blessing In Disguise

One of my early mentors as I began my selling career, and prior to my life in insurance, was an experienced salesman with the 3M Company. Fred and I traveled the state of Arizona, and we often coordinated our travel schedules in order to be in the same town (usually small) together. There wasn’t much happening in these places after 5:30, and it was nice to have company in the evening.

One night at dinner I was grousing about how tough it was finding new customers and the difficulty of selling in general. Fred replied, “Quit complaining, it’s a blessing in disguise. If selling and prospecting wasn’t a tough business, the company wouldn’t need you, and they would dispense the product from a slot machine.”

Years later, when I entered the life insurance business and endured the trial of “starting over” in my quest for prospects, I was reminded of Fred’s admonition, and it sustained me during my indoctrination period.

I also am reminded of him when I hear critics of our business refer to the agency system as costly and inefficient. They often point out that typically it takes 10 calls to make one sale, and buyers are paying for all the effort spent on those non-buyers. What usually is overlooked is the fact that competing systems in insurance and elsewhere are equally costly and in most cases less efficient insofar as customer satisfaction.

In the late 1970s, Blake Newton, then CEO and president of the American Council of Life Insurers, tried to sell the industry on a concept he believed had merit. His belief was there were millions of people who would “self-identify” as life insurance buyers if they received the right stimuli direct from the companies. Blake believed this fervently and felt it could lower company distribution costs significantly. A few companies bought into the idea and some even dismantled agency forces that had taken a hundred years to build. It didn’t work and, sad to say, some of those companies are no longer a factor in today’s marketplace.

At the time I argued against the concept that large numbers of people would “self-identify.” It reminded me of the wisdom of Chinese philosopher Lao Tse, who in 500 B.C. said, “The bird chooses the tree, not the tree the bird.”

More than 2,500 years later Lao Tse’s wisdom has significance to us in a contemporary way. In a sense we are truly birds, free to choose among all the trees in the forest. But consider the plight of our competitors that are more like trees waiting for a bird to fly in. All other systems of distribution are essentially passive with respect to prospecting. They’re passive in the sense that the prospect must affirmatively act in order to be identified as a potential buyer; passive also in the sense of providing little or no assistance in determining needs and ability to pay.