Is Warren Buffet’s amazing track record grounded in his ability to scrutinizing companies before he invests?
Was Ted Williams such a formidable hitter because his fighter pilot eyes knew which pitches were the right ones to swing at?
Do the best defense attorneys win more trials because they know how to select the jury members who’ll deliver favorable verdicts?
I rest my case.
Qualification is the key to closing more sales.
Qualification precedes selling. It’s about discerning whom you want to sell to and how to match your sales approach to their needs.
The upshot is that you focus on fewer prospects, close more sales, and generate a lot more revenue.
Improve your qualification process by 25% and you’ll see your sales revenue soar. Think about it for a second.
Remember your last few sales that fell apart, fizzled or unraveled?
What if you had not pursued those prospects?
Wouldn’t it have been better if you’d ruled them out sooner?
How many other sales opportunities could you have discarded more quickly and saved yourself the wasted time, effort and stress?
And if you applied that time and energy to other, stronger prospects, how much more business would you end up writing?
That’s why better qualification results in more sales.
And the best part is that becoming a master of qualification isn’t hard. It just takes the right know-how and some confident discipline.
The discipline part is teaching yourself to stick with the rules and not break them – even when your intuition tells you you’ve got a real prospect. (Because what often passes for intuition is really just wishful thinking).
Over the years I’ve learned to think about the qualification process as a kind of subtractive technology. Qualification aims to reduce a large pool of suspect businesses to a much smaller group of qualified prospects. Every time you disqualify a prospect, you’re that much closer to finding the people and companies that do want to buy from you.
By qualifying prospects up front you avoid wasting your time with people who aren’t open to changing agents; whose premium levels aren’t sufficient to make it worth your time; whose coverage needs don’t fit your industry expertise.
The right time to resolve these questions is before you schedule a meeting – not after you’re already there.
It’s like weeding a garden. Once you remove the rocks and weeds, it’s much easier to nurture the fruit-bearing plants.
Now, newer producers who don’t yet have the networking capacity or referral base to generate a sufficient flow of ongoing appointments might feel, since new business opportunities are so hard to come by, even lousy appointments are better than none, and every sale that goes bust is a learning situation.
And while learning situations abound for newer producers, since prospecting is critical to successful selling, why not invest more time on the phone asking questions and finding real prospects, instead of settling for wild goose chases with tire-kickers?
Three Stages of Qualification:
These three stages are like the concentric circles of a bull’s eye, each moving you close to the center where your ideal prospect abides.
First you consider general criteria like location, size and industry. You can usually determine these before you even pick up the phone. Next you determine who makes the insurance buying decisions, and if the target meets your premium thresholds and carriers’ general underwriting criteria.
And finally, you find out what’s keeping them with their current agent, and what will motivate them to become your client. What problems can you solve, what service can you deliver, so they choose you over other agents?
Stage One: industry, location and size
Commercial marketing lists compilers like Hoover’s and InfoUSA let you parse out businesses based on a broad selection of data. You can select hospitals by the number of beds and hotels by the number of rooms. You can identify how long a business has been operating, and know if it’s a subsidiary, headquarters, or branch. You can choose contacts at target companies by title, ethnicity or gender; medical practices by specialty; and manufacturers by the size of their facility.
Lists based on workers comp data usually include those premium amounts.
Other compiled lists can be segmented by employee counts or annual sales volume, so you’ll have to decide how those indicators correlate with the premium levels you want.
You can also order lists that include contact names for the job positions most likely to be in charge of buying insurance — the controller, CFO, owner, office manager, bookkeeper, or executive director.
By selecting your prospecting lists carefully, you can rule out a large percentage of inappropriate targets before making a single call.
Stage 2: phone qualification
The next ring in the prospecting bull’s eye is the phone qualification stage. Since compiled lists are at best 85% accurate, make sure you confirm those details, otherwise you risk chasing the wrong person or meeting with a company that doesn’t match your size or industry criteria. Then drill down and ask more questions to further eliminate unqualified targets.
Are there any critical underwriting guidelines for your program, like the ratio of liquor to food sales? If you’re looking to write coverage with a particular carrier, make sure targets aren’t already insured through that same carrier. And if the person you’re dealing with doesn’t have the insurance buying authority, find out who does.
If you discover the prospect’s complicated risk scenario doesn’t fit your markets, skill or resources, or if the account won’t generate enough revenue to justify your involvement, this is the time to tell them they’re not the right match, and move on to another suspect.
Stage Three: propensity to change
This last stage of qualification involves questions you ask both before and after scheduling the appointment.
It’s never a good idea to come in with a “blind” quote without knowing something about a prospect’s current agent relationship and insurance issues. With this intelligence, you can determine what you will need to do to make a difference for them so you can earn you their business.
We recently heard a seasoned producer at a large Midwestern agency complain about the leads they’d gotten from a former telemarketing firm, “They didn’t really do any qualification. If you ask someone if they’d like to lower their rates or improve their coverage, of course they’ll say ‘yes’. But that’s not sufficient justification for an appointment. We want to meet if they have problems we can solve: some insurance or risk management issue we can address, some frustration of deficit with the service they’re currently getting. Then we can focus on that when we meet, instead of showing up with the expectation we’ll be crunching numbers only to get them the lowest price we can manage.”
Of course this guy knows that you can’t uncover all the buying issues on the first prospecting call. But if you don’t zero in on their specific needs and wants before you meet face-to-face, you’ll be limited to competing on price alone.
To differentiate yourself, and go beyond the commodity mindset to win new business, you need to apply a respectful but judicious helping of questions and probes to determine buying attitudes and uncover problems. And then you’ll know the best way to make that sale.