The notion that people do not buy things, but rather buy what things will do, is best illustrated by the old bromide, “each year millions of 1/4 -inch drills are sold, but nobody wants a drill–what they really want is a 1/4 -inch hole.” I learned this lesson early on in my sales career selling automotive and industrial equipment prior to my entry into the insurance business.
For example, I used to sell wheel balancers, and I always stressed the quality of the machine and its features that distinguished it from the competition. While this may have been of interest to the customer, what clinched the sale was the fact that he could make more money with my equipment and pay for the initial investment more quickly. It was what the machine could do that was the primary motivation to buy.
Likewise, when I sold an expensive automatic lubrication system to a large copper mine–the features and durability of the system were important, but it was the savings in labor that prompted the mill superintendent to authorize an expenditure of tens of thousands of company dollars.
Perhaps there is no other product that I know of where this axiom is truer that in the sale of life insurance. People do not take comfort in knowing they have a number of insurance policies in a desk drawer or safe deposit box. Their comfort lies in the knowledge that these policies can do something that in most cases nothing else can do. There is no great demand for the policies themselves. The demand is derived from their ability to satisfy a want or a need.
More often than not that want or need is not thought about on a day-to-day basis, if at all. For example, two people form a partnership to operate a business. In most cases, they draw up a partnership agreement spelling out how they will operate the business and how they will divide the profit. Little or no thought is given to what will happen to the business should one of the partners die or become disabled until a life insurance agent enters the picture. The agent, by whatever name he or she is called, does not talk about insurance at the outset. The savvy agent focuses on the problems created by the demise of one of the partners and recommends they have a buy-sell agreement drawn up by their attorney.
Selling the idea of a buy-sell agreement is the first step and an essential part of the sale. Once the partners become aware that this is needed to solve a problem they didn’t realize existed, then the question of how to fund the agreement arises. When all options are explored, it usually becomes obvious that the only mechanism that can do the job is life insurance on each of the partners. Again the demand for life insurance is derived from the problem the partners face. Everyone benefits–the survivors and the decedent’s family. It is important to note that in most cases none of this would have happened had the agent not entered the picture.