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Deadline
Selling Can Kill Your Business
by Norm Trainor
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The following is based on one of The Covenant Group's clients, Alex Turkle. All
of the names and telling details have been changed to preserve client privacy.
Dan Remnor's business had been sliding downward for the past couple of years and
he was beginning to despair that he'd never turn it around.
A few years ago, Dan inherited the insurance advisory business his father had started.
Taking over from his father hadn't been easy but strong client loyalty helped ease
the transition period, and for the first couple of years, Dan was able to sustain
the business at the level it had been before his dad passed away. But sometime during
the third year, the business began a relentless downward spiral.
Dan told me that he'd been working hard, seeing a lot of people, putting together
a lot of proposals, but was still having trouble closing business.
When I asked Dan why he thought he was having trouble, he said he thought it might
have something to do with his dad not being there anymore.
"That could be a factor, Dan," I said. "Choosing an advisor is a highly
personal issue. It's certainly not a given that your dad's clients will continue
to work with you. You may have been able to borrow on your dad's credibility for
the first couple of years, and that seems to be wearing off. But the question we
need to explore is why are your clients not choosing you?"
I asked Dan to outline a recent case he'd failed to close.
Dan told me about Roger, a client he and his dad had serviced together.
Earlier in the year, Dan reviewed his client files, looking for business opportunities,
and discovered that Roger's temporary insurance coverage was about to hit a precipitous
rate hike. He called Roger and set up a meeting. During the appointment, Dan showed
Roger a proposal for converting the coverage, but Roger wasn't interested. Dan was
surprised. As he explained it, "My proposal compared his current plan with the
converted plan - there was no comparison. I was going to be saving Roger tens of
thousands of dollars over the life of the plan."
Dan put calls into Roger over the next few weeks, but never heard back from him.
Then Dan discovered that the plan he had proposed converting to was going to be taken
off the market at the end of the month. He would never again be able to get Roger
such a good conversion rate. He immediately put in an urgent call to Roger and was
finally able to get a hold of him. But still, Roger balked. That was three months
ago, and Dan hadn't been able to get through to Roger since. Dan worried that Roger
would end up canceling his coverage.
I asked Dan why he thought Roger hadn't agreed to his proposal.
"I don't know," Dan responded. "I really don't get it at all. I'm
trying to do something good for Roger. He'll never be able to get this rate again.
Furthermore, I know Roger is probably uninsurable; if he drops this policy, he'll
have trouble getting covered again. I'm totally stumped."
By now I was very concerned about Dan's approach to his clients. It was no wonder
he was struggling. "Dan," I asked, "I don't doubt for a minute that
you mean well, but you're making a mistake a lot of advisor's make. Before I get
into what that is, I want to ask you why Roger had the coverage you were trying to
convert."
Dan explained that though he'd worked on some business with Roger, this coverage
was before his time. He suspected it had to do with estate preservation, but wasn't
exactly sure.
"Dan," I said, "a few months ago I received a knock at our front door
from a window cleaner who said he was in the neighborhood doing our neighbor's house
and that because all his equipment was already here he could do our place for twenty-five
percent off. When I looked across the street, I saw that he was indeed in the middle
of doing the neighbor's house. Though he had a nice manner and seemed professional,
I still told him I wasn't interested. He explained that I would be missing out on
a great deal and that if I wanted my windows cleaned any time in the near future,
I would be paying full price. I reiterated I wasn't interested. He ended up giving
me his card and told me I could call him up to three in the afternoon, after that
he'd have left the neighborhood and the offer would be off."
I asked Dan if he knew why I hadn't taken the window cleaner up on his offer.
"He seemed to be taking a pretty hard-sell approach."
I asked Dan why he said that.
"Well, he was basically pushing his agenda. He didn't seem to be interested
in what you wanted."
I agreed, then added, "The window cleaner's approach is an example of what I
call deadline selling - 3 o'clock or the offer's off. I find that lots of advisors
apply this kind of deadline-selling technique without really being aware of what
they're doing. In fact, that's what you were doing with Roger - using the deadline
of the rate hike as an encouragement to make him act."
Dan didn't like being compared to the window cleaner. "The window cleaner was
clearly using a sales gimmick," he said, "while I was genuinely concerned
with Roger's situation. I wanted to do what was right for Roger, and I clearly had
his best interests in mind."
"Dan," I said, "the problem with deadline selling is that what you're
doing is trying to motivate your client to act by appealing to an external deadline.
What you should be doing is trying to discover or create internal deadlines for your
client. The real reason I didn't agree to the window cleaner's offer is that I didn't
want my windows cleaned, and nothing in his approach encouraged me to want to clean
my windows.
"And the same goes for Roger. Roger didn't care to address the issue of his
coverage, and you never bothered to find out what Roger really cared about. There
could be a hundred explanations for Roger's inaction. Perhaps the original reason
for the coverage doesn't apply now. Perhaps he's preoccupied with other priorities.
If you really want to do good for Roger, you'll explore his situation and what his
perceptions are. You may discover that Roger is right - he doesn't need the insurance.
Or you might discover that his perceptions are wrong and you need to work through
them and educate and advise him on what his true options are."
Dan agreed that he hadn't explored Roger's situation to the depth he should have.
I advised Dan to drop the deadline-selling tactic and to concentrate on developing
deeper relationships with his clients. Over the next few months Dan applied a relationship
focused strategy, and soon discovered that he was able to uncover and develop business
opportunities this way. Fortunately, he managed to secure another meeting with Roger
during which he discovered that Roger hadn't had the energy to deal with his insurance
issue because he was busy dealing with a toxic relationship with one of his business
partners. Dan knew of a lawyer who was an expert in these matters and arranged for
Roger to meet with him. Roger was grateful, and with the help of the lawyer was able
to resolve the partnership issue. Afterward, Dan spent time exploring Roger's situation,
his values and goals, and through that process was able to clearly address the issue
of Roger's insurance need. As well, Dan uncovered other areas, such as Roger's investment
strategy, that needed to be addressed.
After a few months, Dan's business was back on track and he was confidently forecasting
twenty-five percent growth for the next fiscal year.
Lessons learned
Dan learned that his deadline-selling approach was killing his business. Dan had
a bad habit of looking for sales opportunities that hinged on external timelines,
such as policy conversion dates, upcoming rate increases and product changes. For
Dan, these deadlines were urgent and he couldn't understand why his clients weren't
responding to his appeals for action. Blinded by his own convictions he failed to
connect with his clients. But once Dan stood back and got a proper perspective on
what he was doing, he realized that though he meant well, his clients didn't see
it that way. As far as they were concerned, Dan was pushing his own agenda, not trying
to address what really mattered to them. Dan dropped his hard-sell approach and instead
focused on building relationships, and creating urgency and action by discovering,
developing and appealing to his clients' own internal agendas.
Norm Trainor
is the author of The 8 Best Practices of High-Performing Salespeople,
a speaker and principal of The Covenant Group, a company that specializes in helping
advisors build their practices. The Covenant group has worked with many of the world's
largest financial institutions, including such firms as Swiss RE, CGNU in Hungary,
Guardian, BMO and Clarica, helping their management and advisors create and sustain
high performance by adopting a systems approach to practice development. The Covenant
Group's proprietary practice development system, The 8 Best Practices of High-Performing
Advisors Program, has been adopted by organizations around the world and
is a leader in the industry. For further information, visit The Covenant Group's
Web site at www.covenantgroup.com or email info@covenantgroup.com or call The Covenant Group
at 416-304-1766.
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