The benefits of life insurance cross-selling are tremendous, and yet…
The benefits of cross-selling life insurance are well known—however advisors have long struggled to embrace the practice and consistently excel at it.
What are the benefits of life insurance cross-selling?
At the simplest level, cross-selling and up-selling involves meeting more client needs, which benefits not only them but all stakeholders. Clients who purchase multiple products are also shown to have higher levels of satisfaction with their advisor and results in higher life-time value. Deepening relationships creates barriers to competitors seeking to lure away clients.
It’s also a lot easier. It takes less effort, and each client relationship is more profitable.
A recent Deloitte study revealed that advisors have:
- 15% chance of selling a product to a new prospect
- 50% chance of selling a new product to an existing client
- Plus, selling to a new prospect is 6X more costly than to an existing client
Clearly, cross-selling is a tremendous opportunity for advisors to increase sales and profitability.
So why do 63% of advisors say they do not have a cross-selling system in place?1
And how is it that most industry research shows that advisors average less than 1.5 policies per client? Most clients, in fact, have one 1 policy with an advisor.
Why don’t advisors do a better job of cross-selling?
There are a variety of factors that seem to hold advisors back from doing a better job at cross-selling to current clients. The most common challenges include:
Challenge #1: Lack of confidence/Loss of momentum
Many advisors are unsure about their ability to educate and sell to their clients after the initial policy has been bought. Even if they begin a cross-selling campaign, it often peters out in the first few months, after the initial interest has waned.
In a lot of cases, the lack of confidence is probably rooted in insecurity, not about an advisor’s own abilities, but their doubts about their process or lack of an effective model to follow. Which is the same reason, their determination to stick with their campaign can falter.
Challenge #2: Lack of a simple cross-selling model
Many advisors are opportunists when it comes to cross-selling. They will do it now and again when an obvious situation arises, but it’s not a set of activities that are baked into the advisor’s everyday workflows.
This means that, for most advisors, cross-selling is not a strategic initiative. They don’t create automated processes that can easily be repeated each day and are consistently effective at uncovering clients with specific needs.
Challenge #3: Many advisors don’t have the right tech stack
When advisors rely on outdated methods like manual systems involving Outlook, Word and Excel—or if they are using generic CRM solutions—they usually struggle to turn their hit and miss cross-selling efforts into automated, consistent, customer-need driven processes.
Traditional approaches using tools that aren’t designed specifically for cross-selling life insurance are not optimal. They make segmentation challenging. Opportunities are difficult to uncover. Marketing is usually a manual and occasional process that is generally not very effective. And, since activities are not automatically tracked, follow-up can be inconsistent.
How can distributors help their advisors consistently cross-sell?
The solution to enhancing advisors’ cross-selling capabilities is not very difficult. And it gives insurance distributors a powerful opportunity to help advisors in significant way that will impact their bottom-line and provide exceptional value.