Is the long term health care insurance industry stalled, or is it better than ever? It depends on how many sellable appointments producers have and how they view their opportunities.
When I speak with veteran LTC insurance specialists, I hear one of two opinions. The folks who are struggling to see one or two appointments per week will say the market is tougher than ever. The producers who consistently have four, six, eight or more appointments per week argue that while changes have occurred, the business is better than ever.
I believe our business and our market are just different than they used to be. What hasn’t changed is that the probability for success is directly related to whether the producer has a system to follow. It may sound simplistic, but most agents who have focused on LTC and have placed $200,000 or more of business in a year accomplish this by having a system. This system must generate enough leads to see at least five potentially sellable appointments per week. A tried-and-true formula shows five sellable appointments will lead to $5,000 in placed premium.
The fundamental reason growth has slowed is because agents have not clarified or updated their lead and appointment-setting formula. The old adage–we will sell more when we see more–is still true today. The obvious question is, “How?” Let’s examine further.
Most LTC specialists create sellable appointments from several common lead sources–the traditional and principal ones being direct mail, seminars and the Internet. Other sources, some newer and expanding, are client referrals, professional referrals, networking, public relations and the employer-multilife market.
An agent who tries to create leads from all these sources all the time likely will become overwhelmed and frustrated. I believe in deciding which source each producer wants to focus on and what percentage of applications will come from each. Then we can work our way backward to develop a formula to use marketing materials, lead creatives, sales tools and so on to generate those leads. Most importantly, a structured system helps producers stay focused.
Let’s examine each source in more detail.
Direct mail, seminars and Internet
The challenge with direct mail is postage expenses are increasing, while response rates have decreased. Our national average response rate is eight leads per 1,000 mailed, with some states like California, Washington, Texas and Florida even lower.
Some solutions that have worked for us include endorsement leads, rotating creatives, unique offers like agent-branded booklets and phone consultations. These have helped, but for a producer to see five sellable appointments each week consistently, he or she has to order enough leads, call 10 to 15 hours per week and generate at least $200 in placed premium per lead. This is still a very workable formula for success. Having a profitable formula, enough leads in the pipeline and structured calling times are the keys. Internet lead sources are also practical. Seminars generate great leads, but using existing groups with high affinity works best.
The producer who can contact enough of these leads can be successful, but therein lies the challenge. We have found converting a lead to a sale is easier than ever when eyeball to eyeball with customers, but with direct mail and so on, it is not always easy to get to that point.
Client referrals have never been better. We use different tools branded specifically for each individual producer, which creates value for everyone involved. Electronic education tools are also a good way to create referrals from appointments and from a producer’s existing book of business.
Professional referrals are the fastest-growing and perhaps most natural market for a “lead junkie” to move to. It is a relationship-building approach instead of the more transactional model to which most producers are accustomed.
Working with CPAs, attorneys, financial advisors, insurance agents and medical experts are all referral-building avenues for the producer. Having specific marketing pieces for each group, branded for the individual producer, is critical. The producer can offer LTC insurance as a way to deepen those professionals’ relationships with their clientele, protecting their assets under management, reducing liability under their fiduciary responsibilities and bringing in new clients.
We want to create an environment where the professional advisor agrees to two key concepts: (1) it is advisors’ responsibility to give clients access to an education about long term care; and (2) providing a way for their clients to have access to LTC insurance is just the right thing to do.
Networking and Public Relations
Networking and public relations will help build awareness and generate primarily professional referrals. Just don’t think this will create instant sellable appointments.
The employer and multilife marketplace is perhaps the most exciting component of the LTC insurance industry’s future. It is also a potentially distracting way to spend our time and to lose focus on sellable appointments. The key to this market is to identify your niche. Do you want to focus on C corporations, executive carve-outs, “lunch and learn” seminars or other niches? Should you target small, medium or large employers? Most carriers have great tools, but it helps your credibility to have personally branded materials.
The worksite market reminds me of where the consumer LTC market was a dozen years ago. Any time there is a favorable buzz but a lot of ignorance, an opportunity exists for all of us.
Focusing on creating leads from a few main sources and following a system is what establishes consistent sellable appointments.
To change the way this country finances long term care, which I consider my personal mission, we LTC specialists must lead the way by changing with the times. As we adjust and grow, my favorite definition of learning comes to mind: “Learning is remembering what you already know.”