Increased Need, Unprecedented Opportunitysecure.gamaweb.com/Public/GamaDocs/10Freitag_Hoopis.pdf · 1/30/2012 2 The Need Has Never Been Greater! • 48 million households state they

1/30/2012

1

Bridging the Trust Gap

Delores R. Freitag Assistant Vice President

LIMRA Talent Development

Harry P. HoopisPresident & CEO

Hoopis Performance Network

Top Takeaways

The What, Why, and How

of Sales Effectiveness

• Understand the unprecedented market opportunity • Understand the unprecedented market opportunity presenting itself to today’s producers

• Uncover why today’s consumers fail to take action

• Discover the skills required to bridge the gap

Slide 2 © 2012 GAMA International

Increased Need, Unprecedented Unprecedented

Opportunity

Slide 3 © 2012 GAMA International

1/30/2012

2

The Need Has Never Been Greater!

• 48 million households state they “don’t have enough life insurance.”

• 30% of U.S. households have no life insurance at allat all.

• 29 million households state they are “likely to buy life insurance in the next 12 months.”

• 80% don’t have a personal life insurance agent to turn to.

Retirement Storm on the Horizon

3

3.5

4

4.5

0

0.5

1

1.5

2

2.5

3

20102020

Roadmap for Success

1:61:61:61:666%

1/30/2012

3

Large

Lucrative

Sustainable

Strong Demand, Yet Reluctance to BuyYet Reluctance to Buy

Slide 9 © 2012 GAMA International

1/30/2012

4

The Crisis Of Confidence

• 43% are afraid of making mistakes with financial decisions.

• Complex decisions inspire inertia.

• Our job is to align intentions with action.

Perception of Buying

Communication Is Key

• How much do I need?

• Am I getting my money’s worth?

• Did I make the right decision?

1/30/2012

5

Lack of Trust in the Marketplacein the Marketplace

Slide 13 © 2012 GAMA International

Trust Is the “Attribute Under Siege”

50% 24% 11%Consumers 85%

Has become significantly more difficult to trust advisors now, versus five years ago

40% 14% 5%Advisors

"3" "2" "1"

59%26%

Has become significantly more difficult to build trust with clients now, versus five years ago

Sources: MDRT Generational Survey, 2010; MDRT PREP Survey, 2009

Trust from First Meeting

1/30/2012

6

Listening vs. OversharingReally Know MeReally Know Me

Using Behavioral Economics toEconomics to

Simplify Decision-Making

Slide 17 © 2012 GAMA International

Seven Tactics of Behavioral Economics

Personal Experiences Overcome Optimism

Avoid Ambiguity Heuristics

Present Value Fairness Visualization

Mental Accounts

1/30/2012

7

Tomorrow…

Premises of Choice Architecture

• People choose poorly when making financial decisions.

• The immediate context of decision making The immediate context of decision making matters.

• We can improve people’s decisions by controlling features that influence those decisions.

BE Tactics Increase Sales

4 565

6

7DefinitelyWould Buy 29% higher

3.54

4.56

1

2

3

4

5

Traditional Behavioral

DefinitelyWould Not Buy

Uncertain

1/30/2012

8

Trustworthy Selling

If you could get 30% greater likelihood to buy every time you meet a prospect, what impact would that have on your

closing ratio, your income, your bottom line?

Bridging the Trust Gap 1. The need for what we do has never been greater — the market is large, lucrative, and sustainable.

a. Only 44% of all U.S. households have individual life insurance and only 29% have any life insurance at all – creating unprecedented opportunity!

b. 80% of American households do not have a personal life insurance agent to turn to. c. The number of new retirees will grow from 3.5 million in 2010 to nearly 4.5 million in 2020 –

the retirement market opportunity past the mid-century mark. d. Over 40% of consumers think they need more professional financial advice today compared

with three years ago.

2. The crisis of confidence is bigger than you think. a. 43% of households report being afraid of making a mistake in regards to their financial

decision-making — increasing the likelihood of procrastination. b. The more complex the buying decision is, the further out in the future the benefits are, and

lower the availability of feedback is on a purchase decision the less likely the consumer is to buy (source: Nudge). Those are the characteristics of our products and they directly feed a human tendency toward inertia.

c. Producers’ job is to help people do the right thing and that means they need to gently steer (nudge) them toward the best decision without restricting their freedom of choice.

3. Trust is the attribute under siege. a. According to a recent MDRT study, 85% of consumers across all generations say it has

become significantly more difficult to trust advisors now, versus five years ago. b. Only 59 percent of advisors believed that to be the case — representing a gap of 26 percent. c. According to LIMRA research, most consumers (70%) decide whether they will trust producers

the first time they meet them. This makes it critical to create immediate, positive, and trustworthy initial impressions with prospects. Words make a difference — what producers say and how they say it influences trust.

4. Incorporating Behavioral Economics into presentations will streamline the decision-making process and has been proven to increase the likelihood to buy by 29%.

5. You do the math – If producers could get almost 30% greater likelihood to buy from changing their perspective on how consumers buy, transforming their sales process, and adding language that is preferred by today’s consumers, what impact would that have on their closing ratio and income?

To learn more, please contact Delores Freitag ([email protected]) or Harry Hoopis ([email protected]), or visit www.trustworthysellingdemo.com.