The Preventable Demise of the Fixed Annuity Business: Part Four of a Multi-Part Series
In the first three parts of this series I offered a historical context for the present challenges confronting the fixed annuity industry. In this fourth installment I’ll present a vision of tomorrow’s practicing annuity producer: an agent who is more productive, who is selling a more diverse lineup of annuity products, who is financially successful, and who is compliant by definition.
Meet Ben Harrison, Future Annuity Agent (with 40 Assistants)
Imagine an early morning in the not too distant future. An annuity producer named Ben Harrison, arrives at his office, logs on to his computer and checks his email. Among the messages he finds are three from individuals not yet his clients.
The first email message is from Sydney Atwood, a 62 year-old employee of VestiTech Manufacturing. Upon opening the message Ben soon realizes that Sydney has 1, during the previous evening visited his Retirement Income Strategies microsite, 2, viewed the movie entitled, “Transition Management Planning Using Fixed Annuities”, and 3, requested a telephone appointment with Ben to discuss one of retirement asset principal protection concepts presented in the movie.
Next, Ben sees an email from Frank Poretta, a 73 year-old retiree who had, at 9:42 PM the previous evening, visited Ben’s Fixed Indexed Annuity microsite and watched the presentation called, “Longevity Insurance: Income Security You Cannot Outlive.”Frank’s message to Ben includes these words: “Thank you for sending me the link to your website. I watched the movie and I feel that this product may be right for what I’m looking for. Please call me a 1-555-465-1103 so that we can arrange to meet and talk about this.”
The third message is from Jennifer Wolfe, a 47 year-old single mom who has visited Ben’s Saving for Retirement microsite. After viewing the movie entitled, “Long Term Savings with Tax-Deferred Annuities”, Jennifer has decided to contact Ben to talk about her desire to increase her personal savings. In part, Jennifer’s message stated, “I feel it’s time that I begin to save regularly, especially in light of my company cutting back on matching contributions to my 401(k) plan.”
Ben utters to himself, “Forty active microsites and only three leads today?”
Ben’s Multiple Markets & Increased Productivity
Sydney, Frank and Jennifer are individuals with entirely different needs requiring diverse solutions. By virtue of his licensure, industry knowledge, practical experience and product manufacturer representation, Ben Harrison is an annuity agent well-equipped to meet the needs of each of his new prospects.
After closing Outlook, Ben thinks to himself, “It’s a lock that I’ll reach my goal of four sales this week.” Any why not? It’s only Wednesday and Ben has already made two sales; an income-generation indexed annuity with a $125,000 premium, and a MVA annuity with a $215,000 premium. It’s going to be a very good week! Says Ben, “I’m definitely going to reach my goal of 200 cases this year!”
In fact, by week’s end Ben’s sales have topped $600,000. Ben likes his “new approach” to the annuity business: He’s selling many more annuities, and his gross income is significantly more than in the past. That the commission on each annuity sale is less on a percentage basis doesn’t concern Ben. He’ll settle for a much greater volume, any day.
The Next-Generation Annuity Agent
Ben Harrison is a modern annuity agent. He doesn’t shrink from what he is, he doesn’t camouflage his identity – he doesn’t have to. He proudly broadcasts to the buying public that he is an expert in the multiple financial needs where annuities play a potentially central role.
Ben Harrison is web-enabled to a super extent. He has forty live microsites, each strategically aimed, and each capable of delivering compliant, state-of-the-art video presentations on each and every product and solution covered in his practice.
Ben Harrison has learned the power to be found in empowering his prospects and clients. He’s learned that consumers enjoy “taking control.” Ben knows that his prospects enjoy learning about and evaluating his products on their own terms: when and where and how they choose. Ben’s come to know that all that really matters is that they call him when they’re ready to talk or meet. Ben’s learned that the power of technology personalization keeps the prospect in his circle of influence.
Ben Harrison has learned that his capacity to cross-sell and up-sell successfully has finally been realized through his ability to aim his microsites at different, needs-based customer segments. Ben has learned that his microsites’ ability to deliver highly-effective sales presentations on a wide spectrum of products has resulted in his ability to earn commissions on a much wider spectrum of sales.
In the context of his prospecting and sales activities, Ben has come to see his microsites as “clones” of important parts of himself. Each performs a limited number of vital functions: engaging clients; educating prospects on products and solutions; asking for an appointment; asking for a referral.
No individual microsite can equal Ben’s own abilities, knowledge and experience. Collectively, however, the microsites create a combined prospecting and sales capacity that Ben could never hope to equal.
Ben has come to value the end of “wheel spinning.” Until the rollout of his microsite-based prospecting strategy, Ben wasted considerable time with prospects who really weren’t prospects. Ben has learned that it’s more efficient to meet only with individuals who are pre-qualified. Or, as Ben likes to say, “…half sold already.”
Ben has learned to translate the power of “reach” into higher personal income. His forty microsites are able to reach-in and engage prospects even at great distances. Previously, Ben would tend to ignore prospects that live 50 or miles from his home. Now, he regularly acquires clients who live more than 50 miles from his home.
Ben likes to hear his clients tell him that they enjoy the educational and entertaining experiences he provides them through the video presentations he streams from his forty microsites.
Ben likes to hear praise from his clients, not criticism. He is glad for their trust rather than their skepticism.
When Will Ben Harrison Emerge?
In short, he already has. In fact, the technology to create personalized, compliant, streaming video microsites for Ben-and thousands of other annuity agents- is already in use with several visionary annuity providers including SunLife Financial, Aviva and National Life.
These companies are in the vanguard of a movement that will combine compliant video educational content and web-based technology to deliver engaging experiences to consumers’ web browsers; all while strengthening the central role of annuity agents.
Personalization, compliant educational content and agent-centricity are the three indispensable components of the next-generation communications strategy which will help to solve today’s market conduct related problems and liabilities.
To help agents as much as they can, insurance companies must begin to move away from the “all-encompassing, enterprise website mindset” to a new strategy, one that focuses on the creation of dozens of small, strategic and personalized websites for each licensed agent. Only then will today’s problems begin to vanish due to agents who are vital, productive and financially successful through their marketing of annuity products that convey consumer value that is obvious to all.
©Copyright 2007 David A. Macchia. All rights reserved.
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