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Relationship Building Strategies "Sell like you date" Build a relationship with your prospect or client By Jack McMahan Editor’s note: This month we introduce a new column that will appear periodically. In it, industry experts will offer their insights on how agencies can acquire additional information about prospect and client needs and behaviors in order to serve them better, and in the process, increase sales. Our author for this first column is Jack McMahan, president of Crossing the Chasm, LLC, a relationship management consulting firm, which specializes in innovative growth solutions for insurance agencies. Your phone rings and you answer to hear this bizarre request: “Hi, this is Pat. You don’t know me. Want to go out for lunch?” Does that cold call work? Probably not. You wouldn’t use this technique to get a date. So why do we use it to obtain prospects? Aren’t the goals the same—to build a relationship? Over the last decade the terms “relationship,” “relationship management,” and even “customer relationship management” have taken on added interest. None of these terms is new. For me, however, heightened awareness of how selling organizations outside the insurance industry perform has created new interest in getting back to the basics of relationship building. Harry Beckwith, who suggests that we need to sell like we date1, is one of my favorite marketing mentors. I hope to expand on his “dating” metaphor, with a touch of humor, to address fundamental issues of relationship building and management. “Want to get married?” Asking to marry your date the first time you go out isn’t likely to bring a positive response—and if it does, the likelihood of a good marriage resulting is slim. Inexperienced insurance producers often talk first about themselves (what they know or who they know), about products (“We have great_____”), and, finally, about price (“We are competitive.”). Initiating any relationship means building trust, which necessitates demonstrating a genuine interest in the other person early on. Relationships take time. Do not talk about “me,” “product,” or “price” on the first date. Focus, instead, on the prospect. The prospect is not “the business”; he or she is a person. Find out who the person is, what that person needs, and why you should date. What blank eyes mean. Blank eyes probably mean that you’re not connecting at an emotional level. If you can’t get, or haven’t gotten, to an emotional level in the relationship, the connection probably isn’t going to work. How do you know when you’ve connected emotionally? Look at the eyes. First kiss. Build a foundation for the relationship early on. Gain trust by developing the big picture. Look for and understand the critical issues surrounding the client, such as economic trends, industry trends, and downstream customer demands. Keep in mind the client’s underlying values and behaviors. Look for opportunities, big and small, to be of service, to provide insight, and to offer opinions that demonstrate you understand the person as well as the business. Once you have proved that you understand and you care, then you have earned the right to kiss. “I can’t get no satisfaction!” In this anthem of the 1960s, the Rolling Stones sing about the ambiguities of relationship building (“supposed to use my imagination” and “about some useless information.”) Chances are good that your prospect is not looking for you to prove your expertise. Expertise is generally assumed, or you wouldn’t be offered the privilege to meet. The prospect is looking for a relationship experience. That experience may mean convenience (“great cars and free pickup,” the value proposition of Enterprise Rent-A-Car), confidence (Allstate’s “good hands”), or comfort (Progressive’s promise to be nearby to handle the claim in person). The point is that “relationship experience” is a feeling in the mind of your client. You absolutely must find out what feeling your client or prospect is looking for to make sure that what you are delivering matches that feeling over the long haul. Clients are typically won based on expertise, but the relationship experience is what keeps them coming back. Let your date know you care. Reliability is a fundamental component of trust. It goes beyond showing up on time or answering the telephone on the first ring. It means truly understanding the client’s behaviors, characteristics, attitudes, and values and then using your understanding to customize the way you interact with that client. Sometimes you do that intuitively, remembering Joe’s favorite team, for example. My point is, do it better, do it deeper, and do it systematically. “Will you still love me tomorrow?” The number one reason why defection occurs is the customer’s belief that he or she has been taken for granted2. That’s the reason that the second most important month to genuinely communicate with your customer, on a personal level, is the month after renewal. “Just tell me the truth.” Lying or exaggerating is never appropriate. Building trust, right from the beginning, is the single most important ingredient in a lasting relationship. Looking for Mr./Ms. Right. Are you just looking for another sale, or are you looking for the right customer? Despite the fact that most agencies claim to prefer a certain type of customer, they rarely convert vision into action. Diverse pressures from carriers, varying producer talents, and the costs associated with new customer development make getting around to developing and executing a successful marketing plan difficult. Those agencies that do, however, enjoy significantly higher margins and increased customer satisfaction, and they have more fun while doing it. “Talk to me, darling.” Marriage is more than just good sex. Building trust requires two-way communication. Yet most agencies haven’t spoken (outside of billing or claims events) to more than 80% of the customers they are already “married” to3. You may argue, but that’s what the survey says. Carrying on conversations with your customers may seem impractical and costly, but building effective communication campaigns (including postcards, holiday cards, thank-you cards, single-page newsletters, letters, product announcements, personnel announcements, etc.) is not nearly as expensive or complicated as you think. Dating around. More than likely, your customer has between two and four insurance agents. Think of it this way: How would you like to be one of four guys dating a girl? Well, like it or not, you probably are. In an insurance customer relationship share-of-customer—policy density—is the measure of value. Cross-selling and up-selling are not only tolerated in a trust-based customer relationship, they are expected and desired. Relationships take work. Most insurance agents have gone through some form of selling program. Most of these programs are process driven, that is, one step following another in a specific sequence. They recommend, for example, meet the client, gather policies, develop underwriting information, submit a proposal, and close the sale. Relationship management is not process driven; it is based on trust-building. Trust is an emotion, not a step. Forgotten how to date? Find a counselor. Forgotten (or don’t know) how to build relationships? Find a relationship management coach. We’re all different. What John Gray taught us in his book, Men Are from Mars, Women Are from Venus: A Practical Guide for Improving Communication and Getting What You Want in Your Relationships, is the importance of understanding behavior as the foundation for building strong relationships. It’s important, therefore, not only to observe and respond to the behavior of our customers, but also to understand our own behavior (also read “culture”) and how that may affect our client relationships. Everyone benefits from long-term relationships. Maintaining a high retention ratio (usually measured in terms of a factor of current revenue) is certainly important when determining book value, but an even greater opportunity is often missed. Relationship duration provides the opportunity to get to know the customer better and to segregate most valuable customers (MVCs) and most growable customers (MGCs) from the remaining customer base. Customers who have been with an agency longer than seven years are 37% more likely to consolidate all of their business with that agency. An explosive opportunity exists to build unique loyalty programs to significantly increase the revenue value (long-term customer value) of the MVC and MGC segments who will generate over 80% of agency revenue. * 1 What Clients Love: A Field Guide to Growing Your Business by Harry Beckwith. Warner Books, Inc. 2 Communications Strategies Survey. Baetis, Inc. 2001. 3 Ibid. The author |
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