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Friday, July 8, 2011

Relationship vs. Transactional Selling

I have been in the insurance and financial services business since 1984.  It has truly been over 27 years and counting, and I want to use this blog to share how I have become successful at selling insurance to my clients.  If you can replicate the selling skills and knowledge I will espouse in these posts, you will also make an excellent living in the insurance business and enjoy an exciting and fulfilling career.  You can check out my experience in the “about me” located on the sidebar to the right.  At this point it is my desire to post something new each week that you can take away and apply to your practice.

Whether you are brand new to the business or a veteran like me, you can always learn something new to help increase your sales.  Keeping an open mind and watching what other producers do to succeed is probably the first cardinal rule to being a successful producer yourself.

For my first post I would like to discuss relationship selling versus product peddling.  Even though your goal is to sell insurance and financial products in order to earn commissions to make a living, how you get to that point is important if you are to be successful.

  I had a manager early in my career at Prudential (his name is Dennis Eckels and he is now the President of First Financial Group representing Guardian Life) who was fond of saying, “take care of your clients and the commissions will take care of themselves.” I would like to say that should be the first commandment of insurance sales.  You are not a product pusher and this is not a transactional based business.  When you first meet with a prospective or existing client you have no idea whether an insurance sale will occur at that time or ever. 

The first thing you need to do is establish a relationship with the prospect.  This is important for several reasons.  First and foremost you need the prospect to trust you.  A prospect will only become a client and make a purchase if he or she trusts you, and the only way they will trust you is if you cultivate a genuine relationship with the prospect.  Showing an interest in the prospect’s life and being able to empathize goes a long way toward building that trust.  When I first meet a new prospect I spend 15 or 20 minutes getting to know them and their situation in life.  I look for common ground or interests with my own life so that we have something to talk about besides insurance sales.

The second important reason to establish a relationship is so that you can assess their need for insurance.  Once a prospect trusts you and allows you to do a needs assessment you are already half way home to the sale. 90% of the prospects you meet will have some kind of need for insurance.  Industry wide, selling 30% of those prospects is considered successful in this business.  If you’re not achieving those numbers I am willing to bet it is because you are not taking the time to build relationships.  If you are a veteran and you are achieving 30%, you can increase that number by building better relationships.  Did you ever wonder why a prospect bought from someone else after you took the time to develop an insurance need?  Because they bought from the agent with whom they had a relationship.

Finally, after gaining trust and assessing the need for insurance a relationship enables you to qualify the prospect.  If you are selling life insurance the prospect will need to qualify for medical and financial underwriting and any other insurance product sales will require some kind of financial underwriting, affordability or suitability standard.  Have you ever submitted an insurance application only to be surprised when it is rejected or declined?  Establishing a relationship will spare you the wasted hours on those submissions.

Bottom line is you need to hone your relationship selling skills if you want to be super successful in this business.  I realize I only touched on the topic with this post, so check in next week and I will begin to tell you step by step how to achieve great relationships with your prospects so that you can exceed your sales goals for this year.  If you are off to a slow start you still have half of a year left to let me help you increase your production.  Let me know what you think about this topic.



  1. Great advice from an experienced industry vet who practices what he preaches!

  2. Excellent post. I can certainly relate your sales approach to my Technology business as becoming a "Trusted Advisor" is key to maintaining a long-term client and a mutually beneficial relationship.

  3. @Phil. Thank you. Let me know if there is any particular topic on the sales process that you would be interested in seeing on the blog!

  4. @Michael. You are so right, Michael. Even though my posts will be directed toward the insurance and financial services industry, it is true that relationship selling cuts across the service industry. Looks like your business is doing well. I hope you'll continue to follow me and offer any input of your own that you think would be valuable!