Sales vs. Insurance Knowledge:
What’s More Important?
By Ronimarie Acord
Agency producers are “drinking from a fire hose.”
That’s how Angelyn Treutel Zeringue, president of SouthGroup Insurance Gulf Coast in Bay St. Louis, Mississippi, describes the learning environment in the independent agency world: Technical knowledge is critical as new coverages, policy forms and risk exposures evolve, but building networking and sales skills is equally essential.
Insurance sales legend John Savage used to say his technical skills contributed only 5% to his success, recounts Kenneth Fields, assistant vice president and director of sales development with The State Auto Insurance Companies – the other 95% he attributed to his people skills.
But Savage – who started a Toledo, Ohio life insurance agency that still thrives as one of the 100 largest insurance and financial service agencies in the U.S. – “would then go on to say the trick was you have to have 100% of the 5%,” Fields adds. Zeringue agrees that technical training “helps producers stay keen” to ensure they provide the best coverages and reduce their E&O exposure.
When training producers, what’s the right balance between sales training and the development of technical skills?
What’s the Mix?
“Technical skills are a given – a must-have,” says Fields, who’s helped train and coach 1,600 new property-casualty producers in the 19 years since co-founding State Auto’s PaceSetterSM sales development program. But he adds that those are “useless without the ability to communicate technical information to prospects in such a way that they can understand the value of the product or service. That requires sales skills.”
In the overall process of grooming a new producer, Doug Mills, vice president of Gillis, Ellis & Baker in New Orleans, believes you can’t separate sales training from technical training. “At its core, what we sell is our expertise on insurance products and how they can be applied to the client’s risk exposures,” he says. “You have to ‘know your stuff’ to be effective at sales.”
The two demands can form a chicken-or-egg question for some agencies. “The biggest hindrance to sales success early on is the fear that the producer will be found to not know what they are talking about,” Mills says of his eight producers under age 35.
“Sales is all about confidence, and until the confidence is established, sales will languish,” Mills agrees. “Confidence cannot be established until the producer has a firm grasp on the technical side of things.”
Jeff Wodicka, chairman & CEO of Casswood Insurance, also says the single biggest reason producers fail is lack of confidence. A longtime contributor to the training programs of The National Alliance for Insurance Education & Research, Wodicka explains that the organization once focused solely on insurance knowledge. But in the late 1980s, it broadened its mandate to help agents become “salespeople” rather than “order takers.”
“For many years, the independent agency system acquired technical knowledge, but didn’t have the other skills to move people from their status quo to where they should be to protect their families and businesses,” Wodicka says.
Wodicka, whose agency has nine producers, starts with sales training for new producers to build relationships, probing and objection-handling skills. Then, “we step in and start to train property insurance, liability insurance, workers comp insurance and so on” so the agent has the insurance skills, he says. “We’ve tried it both ways. We’ve gone in with two weeks of technical training – not as effective. It’s not chicken or egg – it’s circular.”
In or Out?
Some agencies have explored sales training from outside the industry. Zeringue says non-insurance programs for “soft skills” such as time management and sales excellence help make a producer well-rounded. “I’m a huge proponent of any training that advances computer skills for producers,” she says, citing examples like Internet marketing and social media strategy.
But while it can be productive, Fields notes that non-insurance-based sales training lacks the unique focus the insurance business requires.
“Because we essentially sell promises of a future benefit that may not ever be realized, the sale of insurance is very different than any other type of sale,” Fields says, adding that agents may “have difficulty applying sales techniques that are not specific to the insurance business.”
White agrees that “working within the industry has significant advantages over working outside the industry.” His caveat: “This is only because the industry is currently meeting our needs.”
Does it Work?
How can you tell producer training is effective? Mary Parsons, sales program manager, Chubb Personal Insurance, says effective training has three attributes: “deep industry knowledge from the presenters; relevant subject matter expertise and experience of the sponsoring firm; and an ability to help with post-classroom real-world application of the learning.”
White’s agency puts together one-, three- and five-year rolling plans with and for its producers, then matches these goals with resources such as sales training, team selling, quarterly sales summits and monthly one-on-one meetings between agent and mentor. The process “also includes learning in the field – that is and always will be important,” White says.
He adds that internal coaching and mentoring are critical to developing and maintaining the effectiveness and growth of producers. “Each of our advisors has a mentor or an accountability partner to work with, along with myself as sales leader and our business development coordinator,” White says.
How does he know the training is worth it? White says producers are succeeding when mutually defined goals are “consistently met or exceeded – we are a results- and performance-based business.”
Your success in this business is about you being confident in your ability to do what is right for your clients!
If you want to be successful in this business, then it isn’t just about your product knowledge. You need to learn how to help your clients ‘and you’ to completely understand their situation, so you can properly apply your technical knowledge to your client’s situation. And, that requires sales skills. You must become a “salesperson“, rather than just an “order taker.”
As insurance sales legend John Savage said… “Technical skills contributed only 5% to my success! The other 95% I attribute to my people skills!”
He also stated… “People don’t buy insurance, people buy people. If they like you, in fact whatever you are selling if they like you they will buy it even if they don’t need it.”
Research carried out by the Carnegie Institute of Technology shows that 85 percent of your financial success is due to skills in “human engineering,” your personality and ability to communicate, negotiate, and lead. Shockingly, only 15 percent is due to technical knowledge.
Nobel Prize winning Israeli-American psychologist, Daniel Kahneman, found that people would rather do business with a person they like and trust rather than someone they don’t, even if the likeable person is offering a lower quality product or service at a higher price.
Get the training and support you need to build your confidence. Confidence leads to success. Believe in yourself. Believe in your skills. And most importantly, believe in your ability to succeed.
Yours In Success,
‘The Nine Out Of Ten Guys’