In last month's issue I introduced the idea of approaching your business as an entrepreneurial pursuit Releasing your inner entrepreneur. As it turned out, that column generated a lot of response. This month I thought I would share a huge sales opportunity in the group marketplace.
If you're looking for a new and different door opener, here it is: "Ms. Business Owner, I have an idea that can lower employee pressure for increased wages."
Trust me when I tell you that very few of your competitors are using this as a door opener, despite the fact that the time has never been better for using this approach. Before you read any further, however, please take a moment and try to identify for yourself how you can actually deliver this result to clients.
For the better part of the last 20 years employers have struggled with double-digit rate increases. To combat this, many employers resorted to increasing deductibles, increasing out-of-pocket maximums and eliminating annual pay raises.
To further complicate matters, in 2007 the country entered the most severe economic downturn since the Great Depression. If employees had managed to eke out any pay raises in the past, that became a near impossibility over the course of the last three years.
This inability to provide any increase in pay has not affected employee retention because of the poor economy and a dearth of new jobs. However, it is taking a toll on employee morale and, by extension, on productivity. Virtually every employer will agree with this assessment - and therein lies the opportunity for the benefit professional.
The solution to the problem of increased employee pressure for higher wages is to focus on those products other than major medical where employees are either paying the entire premium, such as voluntary benefits, or where there may be employee contributions, such as dental insurance and disability buy-up.
The prospecting script for this approach is very straightforward, as indicated above in the second paragraph of this article.
Immediately following that opening line, the salesperson says: "I don't know if you are interested in reducing pressure for increased wages, but if you are, may I ask a couple of quick questions to see if I may be able to help you increase the take-home pay of your employees?"
There are only four potential responses to this question:
2) "I'm not interested."
3) "I'm busy, can you call me back?"
4) "How are you going to do that?"
There is an optimal way to deal with each response. Other than dealing with the prospect who has no interest in this topic, your goal is to identify two things:
1) Whether or not this employer has been able to provide raises to its employees.
2) Which benefits are paid for by employees either in whole or in part.
The easiest sale is when the employer offers voluntary benefits such as cancer insurance, critical illness insurance and/or accident insurance.
If this situation exists, your response should be: "Ms. Employer, we have found that many employers today are starting to review these benefits in much the same way that they review their group health insurance annually. That is to say, they are looking to provide the best benefits at the lowest possible cost.
"If I can provide benefits that are equal to or better than their current plan at significantly reduced premiums, thus increasing their take-home pay, would that be worth 20 minutes of your time?"
Of course, you must be able to deliver on this promise.
A second approach - equally successful if not as profitable - is to ask: "Do you know whether this voluntary benefit offering includes short-term disability income coverage?"
If so, follow up with: "We've found that as a general rule, we can significantly lower the cost of the disability income component and improve coverage by using a true group voluntary disability income product.
"Since this is one of the most important insurance coverages that you can offer, would you be open to a brief appointment to see if we can make a difference in the premiums that your employees are paying?"
In October, I discussed using dental insurance as a door opener and differentiator ("A missed opportunity in group sales," p. 66). By using either a lifetime deductible dental plan, a co-payment dental plan or a combination of the two, you can significantly lower the employee premium for the dental plan.
Even if the employee-only premium is paid by the employer, there may still be an opportunity for this approach to work if there are enough employees paying for dependent coverage.
An alternative approach
If you are a captive agent, the replacement approach may not be quite as effective unless you can actually deliver benefits that are equal to those in place, at lower premium rates. In the absence of the freedom to work with multiple carriers, you can use employee benefit communications as an alternative method to reduce pressure from employees for increased wages.
Unlike the discussion of voluntary products above, the central focus of your conversation should be about employer-paid benefits, vacation, sick leave and retirement benefits.
A key question during that conversation should be: "In your opinion, should there be a connection between the benefits that you provide and employee morale and productivity?"
The majority of employers should acknowledge that there should be a connection. Also, they should readily admit that the connection does not currently exist.
This allows you to set up an appointment by saying: "I have a strategy that can help your employees better appreciate the benefits you provide, as well as their value. Would you be open to a brief, 15-minute appointment to learn more?"
When enrolling a new client after using this approach it is important to not oversell employees - the last thing you want is for employees to feel burdened by the amount of premium they have incurred.
The beauty of it
As a general rule, employers are more likely to be open to talking with you about voluntary products than they will be about group major medical. The beauty of voluntary products is that more often than not, the incumbent group health agent is not the provider of the voluntary benefits.
By making the voluntary sale, you begin to establish a relationship with the employer as a trusted adviser. And at group major medical renewal time, you will be on a level playing field with the incumbent agent. More importantly, you will have generated new revenue that requires significantly less work than major medical benefits do.
Schlesinger has 26-plus years of insurance sales experience, and provides business development coaching to both life and health agents. He is the author of "Get More Group Clients," a marketing system designed to fill your calendar with high-quality prospects. Reach him at getmoregroupclients.com or at (336) 774-3075.
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