I never cease to be amazed at the way some advisors obsess over every change made by a vendor: “The sky is falling, the sky is falling!” Translation: rates or benefits are changing.
Your client doesn’t care, because clients buy solutions, not features.
I learned a long time ago that if you focus on features rather than solutions, you train your clients to concentrate on the wrong thing. Let’s look at two examples:
1. “My term rate is better than Company X.” By taking this approach, we are training the client that the only important thing is price. When somebody comes along with a cheaper price, you lose the client. If you don’t believe that, consider what happened in wealth management. Stockbrokers used to get $83 to execute a trade. Now people expect trade execution to be free.
You should instead focus on providing a policy that will deliver a known amount of cash at an unknown point in time, such that a surviving spouse and children will have stability and comfort following the untimely death of a parent and spouse.
2. “Cap rates (fees, participation rates, riders, etc.) are better with Company X than with Company Y.” Again, your client doesn’t care, let alone understand, the difference. By focusing on these features you distract them from the true solutions offered by an annuity. Try this positioning instead:
- “This annuity will offer tax-deferred growth, protection of principal, and earnings slightly better than a certificate of deposit (CD).”
- “An annuity is the only financial instrument that can guarantee an income that you can’t outlive.”
Or, use a feature to solve a problem.
- “John, I know you are/will soon be taking required minimum distributions (RMDs) from your IRA/SEP/TSA/401(k). If I could show you a way to take your RMDs every year, and at your death pass on to Mary more than what you started with—even if you never earn a penny in interest—would you be interested?” (A great sales idea. Contact us to find out how this is done.)
- “Helen, an income rider provides two safety nets on your policy. First, it provides a minimum step-up every year on your income value, protecting you against market volatility during the accumulation phase. Second, once you begin taking income, it provides a guarantee that if your account goes to $0, the insurance company will step in and continue your income payments as long as you live.”
It’s fine if you want to gripe about intricate policy changes with colleagues or attendees at an industry convention, just don’t do it in front of clients. By focusing on solutions, you’ll have happier clients and less heartburn.
To learn about the great sales idea mentioned above, or to get more information on how to differentiate solutions over features, please contact one of our dedicated annuity representatives at (800) 699-0299.