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Sales has changed more in the past 10 years than it did in the previous 100: Recap from LIMRA Distribution 2014

Recently we were honored to be in Florida for LIMRA’s annual distribution conference, where our CEO Clara Shih shared the stage with Mark Hug (Executive Vice President Product and Marketing, Individual Life Insurance Prudential), Patrick T. Leary (MBA, Assistant Vice President, Distribution Research, LIMRA), business experts Daniel Pink and Ryan Estis, and many other industry leaders.

For those who weren’t able to make it, here are some of the best takeaways from the event, where we discussed the future of distribution in financial services.

The New Age of Marketing and Sales

Kicking off the conference, Mark Hug framed his presentation around key challenges the industry faces today. You may be familiar with the industry challenges as listed below, but what made Mr. Hug’s presentation especially insightful was how he tied the challenges to the opportunities facing the industry.

Key Challenges

  • The Economy: The pressures of low interest rates are especially affecting the life insurance industry. Although the U.S. is projected for a full economic recovery by 2015, the recovery of the life insurance industry is lagging.

  • Regulations: “The industry has never been more regulated,” said Mark. He described the growing regulatory pressure, especially as new technologies emerge and make information more accessible.

  • Distribution: Distribution volume is at a low point, and by some measures, there are 25% less producers than there were 10 years ago. Life insurance distributors are also greying at a faster rate that their financial services counterparts. Today, the average age of a life insurance advisor is in the upper-50s compared to a financial advisor who is in their lower-50s.

Mark described how some organizations are experimenting with “alternative” distribution channels, such as websites or big-box chains. But “we are not going to make progress through experimentation,” he argued, encouraging LIMRA members to move faster to keep up. “We can’t experiment anymore, we need to disrupt.”

Specifically, through technology and big data, he sees key opportunities for the life insurance industry to innovate and adapt in the areas of marketing, distribution and customer experience. Some producers have adopted social media as a means of building relationships with clients, but he also encourages other digital channels of communication such as chat or video conferencing.

Mark pulled out his iPhone and used Siri to search for a life insurance advisor to make a point: it is just not that easy to find a life insurance agent online. He went on to explain how important it is for advisors to be findable on the Internet, using the legal industry as key example. Social media profiles and pages boost search results, making social media a key tool for producers to make themselves more findable.

Another area of opportunity that Mark highlighted was big data and analytics. He encouraged LIMRA attendees to start leveraging the information they already have to better serve their customers and prospects.

“Leverage predictive analytics, learn about your customers and understand how they are going to change in advance,” he said.

In his parting message, he focused on customer experience. At Prudential, they are spending more time on customer experience than ever before. Mark urged his peers that if they are not already investing heavily in their customers’ experiences, then they should be. And the investment can’t be done in isolation by a single team. Distribution and marketing should work as partners, understanding your customer and potential segmented consumer better.

“If you do this,” he said, “you’ll be right along with us next year.”

To Sell Is Human: The New ABCs of Moving Others

The second main stage presentation was led by Daniel Pink, bestselling author of “To Sell is Human.” Daniel started out his presentation with a bold assertion that the disintermediation predicted as a result of digital distribution hasn’t happened. He supported this assertion with U.S. employment numbers showing that the number of salespeople in the workforce hasn’t declined.  The percentage of American workers that are in sales has stayed constant at about 11% from 2000 to 2014, according to Daniel.

Sharing some data his team researched, Daniel described the negative connotation most Americans have with “sales.” The team asked approximately 7,000 adult full-time workers, “When you think of ‘Sales’ or ‘Selling,’ what’s the first word that comes to mind?” Results were overwhelmingly negative: 20 of the top 25 adjectives they recorded were negative, including words such as “pushy” and “smarmy.”

We are no longer in a “buyer beware” world: with all of the information available online, the warning is “seller beware.” Not only can buyers now do extensive research on a product before making a purchase, they can also research the salespeople. Daniel highlighted three key qualities of salespeople in this new era: attunement, buoyancy and clarity.

Daniel also debunked a popular myth that people with an extrovert personality are the best sales reps. In their study they found that “ambiverts,” people who are neither exclusively extroverted nor introverted, are actually the most productive salespeople.

Daniel’s key message: selling has changed more in the past 10 years than it did in the previous 100. Salespeople today need to recognize these changes and return to customer-centricity.

Social Media and the Future of Agency Distribution

On day two of the event, we were proud to take the stage with business leaders from Pacific Life, Thrivent Financial, and New York Life to discuss how social media affects the future of agency distribution.

Hearsay Social CEO Clara Shih (@clarashih) was joined by Greg Bailey (VP, Marketing, Pacific Life Insurance Company, @gregbaileyco), Knut A. Olson (CLU, FIC, Chief Distribution Officer, Thrivent Financial), and Maurice B. Springer (CLF, CVP Manage Development, New York Life Insurance Company).

Building off of Mark’s and Daniel’s presentations described above, Clara discussed how multiple factorsshifting customer demographics and buyer expectations, an aging advisor population and the unprecedented pace of technological changeare challenging the effectiveness of traditional distribution models. She argued that innovations in social, digital and mobile technologies for the advisors can help solve many of the problems discussed at the conference.

To support her arguments, Clara passed the microphone to distribution leaders from Pacific Life, Thrivent Financial, and New York Life in the audience so they could share their social business success stories. Selling is transforming, but that doesn’t mean it’s dying. The most adaptable firms will embrace new technologies as way to help, not hinder, their field forces.

Learn more:

The rise of the customer and social business in financial services: Recap from LinkedIn FinanceConnect
Social Media Is Key to Humanizing Financial Services: SIFMA Seminar
Enhancing the social business experience for financial advisors at Wedbush Securities