One of my mentors, Dan Sullivan, says: “All progress starts with telling the truth.” Is it true that you don’t spend enough time prospecting to have a pipeline of real opportunities that you can win? And that by winning them, you can continue to grow your book, grow your personal income and your personal wealth?
Another great mentor, Stephen Covey, the author of “The 7 Habits of Highly Effective People,” said: “begin with the end in mind.” I encourage you to move all the way out to the day you decide to hang it up, to quit selling insurance… the day you retire. How much money do you want in your retirement account? Financial advisors will tell you that you need approximately 22 times your annual living expenses in your retirement account. That means that to have a $100,000 life-style at retirement, you need $2.2 million in your retirement account.
I have asked several thousand producers: “Do you know how much money you need, and are you making that deposit annually?” Most producers are deluding themselves: They are way underfunding their future.
Before talking about hiring an appointment setter, which could be a perfect strategy to enable you to reach your income goals, it makes sense to get clear on why. The why comes in the form of how much money you need to enjoy a great lifestyle today, while also funding your future. Most families with two kids should be saving at least $45,000 a year to pre-fund for two cars, two university tuitions and one great retirement. Further research tells me most are saving less than $15,000 a year. Net result: they are underfunding their future by approimately $30,000 a year.
That’s good information to know to make a plan for how to grow your book, income and wealth. By the way, yours truly got on this plan 23 years ago and it’s worked very well. This is not hypothetical malarkey; this is real stuff. Are you underfunding your future? Do you want to hang it up someday with a lot of jingle in your retirement account? If so, all you have to do is figure out how to get there. That is one reason why you might want to hire an appointment setter.
Figure out if it makes sense to hire someone to compensate for one of the biggest gaps that is killing your growth: not enough prospecting effort.
Hunters, Trappers, Skinners
Producers can be categorized as hunters, trappers or skinners. Here is the obvious distinction.
A hunter is willing to prospect, even though it is uncomfortable. They are also good at closing the business. So, a hunter, by this definition, is the primo producer. They have the fullest pipelines, they write more new business annually, and they have the biggest books.
A trapper is a little different. They prospect occasionally, but they are opportunistic. Prospecting is not really in their vocabulary. But if you put a trapper in front of a good prospect, the prospect won’t get away without buying. It’s one of those ironies that is difficult to figure out. A trapper can sell but is not much of a prospector. Slim pickings on the pipeline front.
A skinner is neither a prospector nor a seller, but will retain an account for a lifetime.
The problem is clear, there are only a few hunters in most agencies. And if they are true hunters, they’ve built a big book of business, even to the point where prospecting becomes a secondary activity. The trappers never were good prospectors, and the skinners are, by this definition, fake producers.
With this said, you should do some math. Figure out if it makes sense to hire someone to compensate for one of the biggest gaps that is killing your growth: not enough prospecting effort.
Cost – Benefit Analysis
Think of this as a math problem first and foremost. Determine the economics of hiring an appointment setter to see if it makes sense. Suppose you hire an appointment setter and pay them %500 each for a new business appointment. Is that a good deal? It depends, doesn’t it? If you can close 50% of the time, the cost of a sale becomes $1,000 each.
As a producer, you get 40% new and 25% renewal. That means you get paid $2,000 in commission for selling the account. You paid $1,000 in appointment setting cost. Net income first year: $1,000. On renewal, you get 25% on a $5,000 deal or $1,250 annually, and you will probably keep the account five years; that’s $6,250 in your pocket on the renewal and $1,000 from writing it for a net commission earned of $7,250.
If you don’t hire an appointment setter, there is a good chance your appointment count is going to be significantly lower. If you rely on your own ability, the difference could be significant. How many first time, new business appointments do you set annually (if you told the absolute truth)? Is it five new business appointments, or maybe even 10? If you had an appointment setter, it could easily be three-to-four per month or 35-to-50 annually.
The effect on your growth and personal income is significant over a five-year period. It’s probably the difference between writing $35,000 to $50,000 annually if you continue to do it on your own. If you hire an appointment setter, you could increase that to $100,000, maybe even $200,000, of new business annually.
No Shame, No Blame
Dan Sullivan, the strategic coach, once said: “You can’t make $100,000 a year doing $12 per hour work.” It’s just as true that you can’t make $500,000 a year doing $50 per hour work. Sometimes, the No. 1 thing you should do is delegate tasks that others can do, so you can do $500 per hour work.
Meeting with prospects and closing the deal is $500 per hour work. That is your unique skill, and you should spend as much time as possible in that role if your goal is growing your income and developing your personal wealth.
Dialing for dollars is also a unique skill. If you can pay someone to do that for you so you can do what you are great at, and it brings in an enormous amount of money, then do it.
Time, Talent, Fear and Phobia
There are a lot of ways to justify having an empty pipeline. Here are just a few.
Time: If you’re a successful producer, you know how much time it takes to manage a book of business. Depending on the make-up of the book, it can be overwhelming at times. When it is, setting up a call block on your calendar and dialing for dollars is the last thing on your mind. When that happens, the pipeline dries up and with it, your potential to grow your income diminishes, unless you’re lucky or have a great network of referral sources pumping opportunities your way. If time is your problem, the smart thing to do is to delegate activities. Setting appointments could be your No. 1 opportunity.
Talent: There are some people that are good on the phone and some that are not. If you are the latter, then delegate this part of your job to someone who is good. Pay them well to queue up opportunities for you.
Fear and Phobia: Some people, even successful salespeople, have a negative visceral reaction to making cold calls. It scares them. Yes, it’s irrational for an adult to get scared picking up the phone and calling someone (it’s impossible to get hurt physically), but you could get crushed emotionally, and that’s enough to keep a lot of good people from making the dial. I had the same problem when I started my business.
For whatever reason, when I started dialing on the phone, I imagined the buyer looked like Telly Savalas – a bald man with big fat sagging cheeks, a stogie in his mouth and a deep, harsh sounding voice. It got worse. I could almost hear him screaming at me, “What do you want?” I’d get nervous and would have this awful feeling in my gut.
There were many times that I would quit dialing, get up and go to the bathroom, get a cup of coffee, come back in the office and start writing a letter instead. Irrational, yes, but real in my mind. Fortunately, I ran into Tony Robbins, did some pseudo psychological reframe work on the problem, and it went away. Had I not, it would have been a huge obstacle to my success.
If you suffer from cold call reluctance, there are places to get help. If you don’t your paycheck will suffer along with your self-esteem. There is no shame in admitting this is tough, but don’t sit and suffer. Do your research and find help. It could be worth several million dollars in income.
Know Your Numbers
If you want this to work really well, you have to be realistic. Optimism could be a fatal mistake. There is a ratio of dials, conversations, appointments. There is a good chance that the ratio of dials to appointments is much worse than you’d anticipate. You need to know what they are over a long enough period to set and maintain expectations. Like most things, this is more difficult than it looks. But it could be a life-changer if you can master it.
You want to know if leaving a voicemail will make your numbers better. Does sending an email or a series of emails improve appointment conversion?
The other big variable is the “punch” – the first thing your appointment setter says to gain the prospect’s attention. This is critical. If it’s not loaded with a compound benefit/pain statement, there is a high chance that the buyer will go into automatic response syndrome and end the call without hearing a word.
The four big variable are your list (who you are calling), your punch (the bold statement used to get their attention), your voicemail strategy (think of it as marketing messages) and your email strategy (designed to gain attention before the call).
You need to test all of these to hone-in on the most successful pattern.
Efficient and Effective
If you haven’t read Jeb Blounts’ book, Fanatical Prospecting, it’s time to pick up a copy. Be prepared, he’ll hit you in the nose with his blunt comments. One of the many things he lays out in his book is the formula: Efficient + effective = performance. (Efficient is the number of dials made during a call block. Effective is the ratio between dials and appointments set.)
The point is simple: For this to be a successful, ongoing venture, you need an efficient method for your appointment setter to get through a lot of dials during a call block. If your appointment setter is working with spreadsheets, the traditional off-the-shelf CRM system, sticky notes or anything that wasn’t designed for efficiency, it’s going to cost you.
The other piece is effectiveness. If someone can make 60 dials but can’t convert them into appointments, then what difference does it make? That is why your appointment setter needs a strong “punch” to open the call and get the prospect’s attention. Combine that with a compelling story and a simple line to close the appointment and you can develop someone into an effective appointment setter.
Combine your efficiency with effectiveness and you’ll get the result you desire – appointments with the right buyer.
Caveat Emptor: Buyer Beware
As in all things, there are numerous telemarketing firms vying for your business that say they have the ability to set appointments on your behalf. Some can, most can’t. If you consider a service of this type, do your homework. Find out how they train their personnel.
Many firms are bottom feeders, meaning they hire $15 per hour people and give them a basic script. Unfortunately, they sound like teenagers reading a script. The only people that respond are those that would entertain a quote from anyone (bottom feeders). In most cases, they are not your best prospects.
There is a good chance that the ratio of dials to appointments is much worse than you’d anticipate. If you retain this type of firm, you’ll probably go through three phases: Euphoria, disappointment, then anger.
In the beginning, you’ll be glad you have someone else dialing for you (euphoria). But when they set appointments with people that want to email you the dec sheet from the policies and expect a quote, you’ll be disappointed. Generally about four-to-six months into the relationship, you’ll acknowledge it was a mistake, and you’ll get angry that you wasted time and money. So, do your homework. Ask tough questions. Find out who will be making dials on your behalf. If you don’t, it could be an ugly and expensive ending.
Your other option is to do it yourself. There are places you can find talent, such as Upwork or Fiverr. These are job boards where you can post your job and see who responds. The bottom line is you should determine who you are (hunter, trapper or skinner), what you want (financial freedom or financial chaos) and take action to get it.
Article By: Randy Schwantz
Source: The Insurance Journal