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Watch your SUDs level

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As I visit with benefits brokers across the country, they seem to divide into two camps.

The first, a small fraction of the whole, is actively working on finding new and innovative practice models that allow brokers to take advantage of the rapid change in our industry.

The second, and by far the most predominant, is the group that is paralyzed by those very same changes.

Seasoned salespeople armed with amazing skill sets and great books of business have become convinced (or have convinced themselves) that their experience and training are no longer useful. Many believe they need to transform themselves and their practices completely. For some, that may be a useful exercise — and might have been a practical course of action even without the recent market turmoil. Sadly, others have that deer-in-the-headlights look.

They have reached a SUD level that has left them unable to move. This does not mean they have been drinking (though perhaps some have). SUD stands for “Subjective Unit of Distress.” Joseph Wolpe developed the SUD level concept in 1969 for use as a quantification tool for clinicians treating patients with anxiety and other disorders.

Think of the measure as a thermometer, with gradations from zero at the bottom of the scale to 10 at the top. At zero, patients were totally at peace and not stressed at all. At five, patients were moderately upset but able to handle the distress. At seven, patients started to freak out. If patients hit 10, they were having an anxiety attack, and whatever distress was going on their lives had wrested all control from them.

Many years ago when I was managing my first sales unit, a crusty old veteran and former agency manager told me it was his observation that salespeople performed best when they were in the six to seven range on the SUD scale. He said that below the six or seven level, salespeople became complacent (he actually said lazy) and sales tended to wane. If salespeople were above that level, they ended up like our deer-in-the-headlights friends today.

At the time, I was not certain I believed him, but as the years have gone by, I have learned there is a certain logic in the theory. Very few individuals in any field perform well when they are pushed far out of their comfort zone. Today, if that larger cohort is at number 10 on the scale, the goal has to be to find ways to get them back down to the middle — and most productive — part of the metric. We need to find ways to put them back in “the zone.”

In my platform talks about transformation strategies for benefits professionals, one of the first things I suggest is that folks who are heading to the top of their SUD level might want to consider ways to stay in the market segment they know, even as they adjust the practice areas in which they interact with prospects and clients.

Since May is Disability Insurance Awareness Month, let us use an example or two from the individual disability marketplace to illustrate how the concept works.

Assume you are a broker who has been working in the small- to mid-size group market. Since this represents the vast majority of all businesses in the country, it is a fertile market indeed. Some of your market is comprised of current clients — those with whom you have established relationships over time. Others are suspects and prospects yet to be approached and converted to client status.

Begin with existing clients who already know you as a trusted advisor and perhaps a friend. This is a natural market. What these clients have in common is that they are small businesses, and that means some of them are close corporations or partnerships. When you visiting to discuss the vagaries of PPACA and regulations yet to come, it is easy to pivot to talking about other insurance challenges the business might be facing.

What would you do if one of the partners/shareholders dies? Then, difficult though it might be, quietly wait for the answer. They may say, “We are covered. We established a buy/sell agreement a few years ago.” You say, “That’s great and a very important thing to do to protect your business partners and the company itself.”

Continuing, you ask, “What happens if one of you becomes ill or hurt and can no longer work in the business?”

That is the key question. In my experience, many of the clients who have buy/sell agreements in place do so because they were recommended by their life insurance agent or by one of their professional advisors. They are frequently funded with life insurance but are not often funded with disability insurance. Younger partners and shareholders are at a significantly greater risk of disability than of death, yet an agreement unfunded for a disability creates an amazingly huge liability for the company.

You can help them fund that liability in exactly the same way the life insurance funds the risk of death. Moreover, depending on your relationship with the client, you can express some concern that their advisors left them with a liability that was not even discussed — much less funded. You have just become more valuable to them, and you have begun the process of a sale you would not otherwise have even discussed.

One more example, again using individual disability as a stepping-stone, is the multi-life sale. This is not a group product in any sense of the word, but it is marketed right in your comfort zone — the employer setting. These are multiple disability contracts from the same carrier, but which are sold to several (three or five usually being the minimum) employees simultaneously. The kicker is that the carriers discount their everyday disability offerings by as much as 20 percent. The contracts can each be tailored for the particular individual, and the policyholders get to keep the contract and the discount even if they change employers.

Once again, you are marketing in the employer arena, and you are beginning the process within your existing book of business. You just had to substitute the word “employer” for the word “group,” which is how you have traditionally viewed these folks. Nothing has changed except your vantage point and your willingness to add new products to the mix.

This simple strategy seems to do a good job of helping brokers lower their SUD levels so that they can begin the process of moving forward. The disability examples are just two of five basic DI strategies we teach that accomplish the strategic goal of helping to make the transition to the “new normal” within a context that is comfortable for producer and client alike. It is a soft landing from the health care reform hurricane.

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