Premium » Motivation

Hit the Bull’s Eye

Administrator — Tue, 20 Dec 2011 05:00:21 +0000

Two primary conditions that any marketeer must understand are:1) People are not equal, and they cannot be treated equally; 2) Birds of the same feather flock together. (that is, in a group they behave almost alike).

Markets consist of people (buyers) but people (buyers) differ in one or more ways. They may differ in their wants, resources, locations, buying habits. These variations are the main criteria for segmenting the market. Yes, people are not equal, and we cannot treat them equally.

If we group people with similar virtues (or likes and dislikes) together, then we can address their needs/problems with specific solutions (Birds of the same feather flock together).

Mr. Prakash was the star salesperson for an FMCG company. He topped the merit list of salesmen month after month. He sold maximum top-end models of TVs, fridges and washing machines.

He operated in a big metro city. He used to call on working women executives and rich women at their offices/ business establishments and position these products as time-saving equipment and he was getting good response. This was his prospecting strategy, and it worked well for him.

Given this performance, he was promoted as head of a branch of the same company and was asked to lead a team of 10 salesmen operating in a rural area. The team was not performing well and was always giving excuses to justify their poor performance. Mr. Prakash quickly realised after joining his new position that what worked for him earlier was not going to work here.

He changed his approach. Here he led his team to address farmers’ needs in a different way, pitched not the top-end models but the economy models, and, again, not as time-saving equipment but as gifts to their beloved. He also brought in easy paying modes. Not surprisingly, he again topped in sales of the company.

Now, think of what would have happened if Mr. Prakash had not changed his prospecting strategy. The above story is just a very simple illustration of the concept of segmentation of market and choosing a matching marketing strategy.

We had earlier defined Market as “A set of all potential buyers of a product.” But within this market, there can be people of different income levels (affordability), people of different ages, different needs and wants and many other differences, making it very heterogeneous. So for any marketeer to design a strategy to reach this market, he requires to divide this market into more homogenous smaller segments. He can then decide as to how to position his product in that segment.

He does not have to spread his resources all over the marketplace, instead he can choose those segments he is more interested in and focus all his resources on that.

He can specialise in serving that particular segment. Marketing efforts can thus become more economic and efficient.

Let me give you an example, the Life insurance market can be segmented into 1) Individual policyholders market, and 2) Corporate buyers.

The individual market segment can be divided into 1) Children policies, 2) Women’s policies, 3) Retirement Solutions, 4) Mortgage insurance solutions, 5) Small savings solutions and a few more such categories.

The corporate segment can be divided into 1) Welfare segment and 2) Statutory segment.

To operate in the corporate market we need specialised knowledge, but the same knowledge may not be of great use in the individual policy holders market. The aspect of taxation related to corporate houses and the tax savings on such Life insurance schemes that they may buy, are different from the tax aspects related to individuals. This is just one criterion of purchase decisions made by the buyers; there can be few others also.

This is only a broad overview of segmentation, but we need to know much more about the scientific basis for segmentation and also about designing a suitable approach to tap that segment, which we will be doing in the coming issues of Premium.

When I was working as Manager (Sales) in Chennai Division of LIC some 15 years ago, I met a lady agent who had cultivated a good association with big maternity hospitals in Chennai, and she used to be informed by the staff of these hospitals every time a baby was born there. She would greet the parents of the newborn and present them a small silver ‘kindi’ (a type of cup traditionally used to feed infants with liquids). She would then explain to them how they must from then on start saving exclusively for the child. She would also present testimonials from other parents who have benefited from her advice.

She focussed exclusively on the Children Policy segment and was selling more than 200 policies every year. She was always on the top of the merit list of agents of the division. She carried printed documents showing the fee structures in foreign universities and the top universities in India for professional education. She also had with her photographs of eminent people who had been educated at MIT or Harvard and would encourage the parents to dream of such a future for their own children.

Now, let me give you some home-work:

If you as an agent were to focus on Retirement Planning as a need in the market, what type of segmentation will you do? What will be your strategies to tap into those segments? Send me an email at gopinathr@go-past.com. I will go through it and suggest any fine-tuning that might be required.

The author is Founder and Chief Executive Officer of Go Past Centre for Learning Pvt Ltd, Chennai, and former CEO and Managing Director, LIC Lanka Ltd. Responses and comments on this column are welcome. Email: feedback@premiumonline.in

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Grow by Design, not Default!

Administrator — Wed, 16 Nov 2011 05:00:48 +0000

When an individual grows bigger he becomes an organisation.

A Life insurance agent to start with works as an individual but, as he keeps growing he forms an organisation. Organisation has various functions such as production, finance, personnel, governance and marketing. While a major portion of the design and production is taken care of by the insurance company itself, some part of it (combining a few plans to suit the customer well) is done by the agent. He invests money (finance) in his own organisation, maintains books of accounts for this, engages people (personnel), rewards them, gives guidelines (governance) to his team and markets insurance products (marketing) or plans, brands his organisation as much as any other insurance company might do, albeit on maybe a smaller scale.

“Marketing is often dynamic, challenging, and rewarding. It can also be frustrating and even disappointing, but it is never dull! Welcome to this part of the organisation where “the rubber meets the road.” The place where the organisation’s ideas, planning and execution are given the acid test of market acceptance or rejection.” – William J. Stanton.

True. An actuary can design a Life insurance product, as per what he thinks best suits the needs of prospects, can price it also well, and also file it with the regulator and get it approved. But ultimately, it is the market which is going to accept it as a great product or simply ignore it. Market is the place where that idea, price and design of the learned actuary is put to the acid test.

As Peter Drucker said, “Marketing is so basic, that it cannot be considered a separate function…. it is the whole business seen from the point of view of its final result, that is, from the customer’s point of view.”

What is Market?

A Market is a set of all actual and potential buyers of a product.

What is Marketing?

While there have been so many definitions by various authors in various books and texts, let us, for our simple understanding and use define it as “identifying and fulfilling the needs of the customer at a profit to the organisation.” This definition is the closest to the definition given by Philip Kotler, known as the father of marketing management.

Marketing management for a Life insurance agent contains a set of activities such as:

1) Analysis (demand in the market, segmenting)

2) Planning (forecasting, designing specific strategies, positioning)

3) Promoting (branding, publicity)

4) Controlling (monitoring implementation, reviews)

5) Developing (identifying new markets, expanding horizons, strategic alliances)

Let me give you an example: An agent keeps working on individual policies and, in the process, comes across a corporate client who enquires about a group insurance policy for his staff. Then the agent gets busy collecting the details and in due course gives a group insurance policy for that institution.

This happens by default, but the same can happen through a specifically designed marketing programme like identifying from the existing client base all such clients who are engaging more than 100 member teams and positioning himself as an expert in group insurance policies, so that he can expand his market much beyond his present horizons.

There are some niche areas like key-man insurances, business successions through partnership insurance, delinking a business risk from the family by issuing policies under the Married Women’s Property Act, gratuity provisions for big institutions, employee welfare schemes and such. These initiatives mostly happen by default, whereas through a good marketing management approach we can make it happen through our design.

Please look at the visual below to get an idea on the relationship between profitability and the volume of new business and the need for segmented approach in the marketing function.

To get these things organised systematically we need to understand the whole concept of marketing management, so please stay in touch and read the coming issues regularly that we can together grow bigger multiple times what we are now.

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Pilot through Air Pockets!

Administrator — Tue, 18 Oct 2011 05:00:55 +0000

Two persons, Akshay and Aiswarya, decided to invest in the stock market and both started the same day. The performance of Akshay’s stocks and that of Aiswarya’s are given at the bottom of this page. The price movement of the stocks selected by Akshay was Rs 6, Rs 8, Rs 10, Rs 12, Rs 14 and Rs 16 whereas Aiswarya’s went yo-yo (Rs 6, Rs 4, Rs 2, Rs 4, Rs 6 and Rs but ultimately recovered marginally to close at Rs 8 for the period. In other words, while Akshay was able to sell his stocks at Rs 16 a piece Aiswarya was able to sell them only at Rs 8.

After showing this price graph to many (more than a thousand) people, I asked them if they had known at the time of beginning of the investment itself that the movement was likely to be what it was as shown above, what type of stocks would they prefer if they were to invest Rs 5 lakh every year? Akshay’s? or Aiswarya’s? More than 95 per cent of them said they would have gone for Akshay’s.

Now look at what happened, see ‘Graph 1: Akshay vs Aiswarya’ and ‘Table 1: Akshay vs Aiswarya’ at the bottom of the page!

Keeping One’s Cool

A pilot stays calm and confident during turbulent weather, rides out the tough period and ensures that the passengers reach their destinations in one piece. He does not abandon the flight. He doesn’t bail himself out till he has ensured the safety of all the passengers.

A good Life insurance agent is like that. The current situation in the market is quite turbulent. Just the time to stay by the side of the customer and comfort him.

The past five years have seen an unprecedented sale of Unit-linked insurance policies (ULIPs). With ULIPs of course the client is likely to get much more returns than what he might get in a traditional insurance plan. But for this to happen, he has to withstand the seesaw of the market.

Life insurance plans in India have three dimensions: 1) Income protection to the family, 2) A good savings medium, and as a 3) Vehicle of investment. All the three dimensions take care of the three risks people will have to manage. These three dimensions and the risks the cover are: (‘See Table 2: The Three Dimensions’ below.)

Capacity Risk: The risk of losing or a reduction in earning capacity of a person. This can happen primarily owing to death or disability or critical illness. This will put the family in difficulty and the first casualty of this is the dreams of the children about their future. ALL the planned investments are at risk as the income from which they were to be made itself is affected. Term assurances, the insurance cover in ULIPs and traditional products, the disabilities covered and the critical illness cover, etc, fall into this category.

Capital Risk: The risk of losing the hard-earned wealth created for future requirements. This can result from the market conditions. For the sake of the most important goals in life we need a minimum amount of capital available readily on hand at the right time. Goals need cash to be realised. Traditional Life insurance plans fall into this category.

Adequacy Risk: Over a period of time inflation eats into the wealth. If on one side we work hard and save little by little like a sparrow that builds its nest, on the other side the inflation takes away the small growth gained as interest on our savings. When the goals have to be realised we find that the money on hand is not sufficient enough. We need, therefore, to earn a little more yield than the inflation rate. This is possible only when we invest in instruments like equities or instruments which carry the risk of losing capital but provide a chance of earning better yields. Risk and rewards go together. ULIPs fall into this category.

A person skiing or skating under professional supervision of an expert is taking a risk but gains the thrill of adventure. But a person jumping from a high-rise building, without aid, without a professional to help him do it, is just being foolish.

While we need to risk the capital, in the expectation of more yield, we need to do it under professional guidance. There are two aspects which are primary in such investments: 1) Selection and 2) Staying. Both these aspects are coloured with emotions. The vision gets blurred when a person is either greedy or panicky. Most of the time the media can only add to this frenzy.

The general public at large may not have adequate knowledge about the capital markets, their behaviour, companies’ financial statements and such, to make a decision about investing and related things. ULIPs are very good options for the vast majority of our people. In the case of a ULIP, the selection of the companies to invest in is made by professionals who are well educated in this aspect. Naturally one needs to pay some fee for this advice.

The cost of not availing of a professional’s service here could prove deadly in the end. Can professionals go wrong? Yes, they too can. But compared with what a layman can do, certainly a professional will be a million times a better performer. But while entrusting our money to a professional, we must also understand that no professional can produce returns for you if the market is such. If the market is not offering returns in a given period, then the client will have to wait for the right time to cash in and quit.

Advisors in such cases must follow these points:

Prepare the client for holding over 10-year period.

Decide on the purpose of the investment and the amount needed to meet that goal.

Explain the need to continue to pay the renewals on time, without being swayed by mass opinion.

Ensure that the client has adequate alternative means of cash/cashable instruments to meet emergency situations that might arise in between.

Explain the cost structure and the difference between NAVs and the Yield (IRR).

Review and shifting or switching to bonds should be made as soon as the target amount is reached by being specially vigilant two or three years before the maturity.

For the time being, however, please stay with the customers, comfort them and see them through these turbulent times. Your job as pilot ends only when they reach their destinations. Till then stay calm, confident and poised. They boarded your aircraft, trusting you‘d help them reach their destinations quickly and safely; you will now prove that you are worthy of that trust.

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You, not the product, make the difference The Power of Now!

Administrator — Tue, 13 Sep 2011 05:00:19 +0000

God has given most of us many gifts – good parents, supportive family, good health, ability to think ….the list is virtually endless. But amongst all these, the biggest gift is ’NOW’.

We cannot change the past, we can only estimate and plan for the future, but we can ACT now. For NOW is fully under our control. Our future rests on NOW. Our future begins NOW. So we can disconnect with our past and connect to the future we want NOW.

A person born poor need not continue to be poor. He can disconnect with his past (poverty) and connect to a (prosperous) future that he wants by acting NOW. That means we do not have to be stuck with a destiny but can shape it ourselves by doing or by not doing something NOW. This is applicable to every single person on this earth.

If we labour now, we become prosperous in future. If we learn now, we become experts in future. If we plant the seeds now we get the fruits in future. If we waste time now, we are asking for crisis later. Gradually, by using our NOW we are creating our future. It is not as if we come into this world with a pre-written future, but we carve out our future from NOW.

If an agent wants to qualify for MDRT, then he has to work towards it this very moment. If we do the prospecting now, we will get names to approach. If we approach people now, we will get appointments to meet them. If we meet them now, we can help them with plans that will fulfill their dreams. The more that happens, we qualify for MDRT.

And you know a sad secret? In all these statements, add “Do Not” in the first part, you will automatically get “Will Not” in the second part.

If success is so simple to achieve, then why doesn’t everybody achieve it?

We were talking about acting NOW. Actions are initiated by feelings; and feelings are triggered by thoughts.

An ugly caterpillar transforms itself into a very beautiful butterfly in about 28 days. For this transformation the biggest contributor is Mother Nature. We have also seen ordinary and common people transforming into unique and great personalities. The major contributor for this transformation is their “THOUGHTS”. When we change our thoughts, we change our destiny, because thoughts generate feelings and feelings initiate action NOW.

Therefore, the changes that we make in our life, depend on our thoughts. Happy thoughts release lubrication into our system and all parts of our body work smoothly in fine coordination like a symphony. And a negative thought releases toxins and friction into the system and the parts slow down and create a strain.

There are three factors about thoughts that we must understand: 1) Compounding effect 2) Diverting the track, and 3) Reflexive thoughts.

Compounding Effect

What happens when you search the Internet using a keyword? Say, you type ’Automobile’ in Google search, millions of websites linked to automobiles appear before you. The same thing happens when you type ‘hospitals’ or practically any such word.

When you generate a thought, millions of things linked with this thought appear before you (in your mind) and, as you dwell more on them, millions more appear before you. This is irrespective of whether they are positive or negative. The result is that positive thoughts can turn negative thoughts because, if left to themselves, they tend to intensify.

For example, you pick up the phone to call a stranger for an appointment to explain Life insurance; right then you think, he may not respond well, or he might get annoyed with the call. This thought brings to focus such negative responses that you have got in the past. They multiply. This generates a sad or a helpless feeling in you. Because of this feeling, you might stop calling and settle for any other job on hand. Because this call was not made, we may not get the appointment – and a whole lot more.

Look at another scenario: You pick up the phone to call a stranger for an appointment to explain a Life policy, and you think, this person might respond well. A lot of people have responded well; so will this person. All your present clients have been approached in this manner. This thought multiplies and gives you a feeling of enthusiasm, hope and confidence. You now make that call.

Diverting the Track

Just like a child throwing away one doll on seeing a new one, your mind can be diverted to think about another thing, by consciously thinking about that another thing. So when you call to a stranger, you can replace a negative thought with a positive thought and this positive thought will multiply and intensify. The way one word typed in Google search yields millions of websites for you to choose from.

Let us say you are solving a puzzle, you think and produce thoughts. You are writing a poem, you think and produce thoughts. In that sense you create a thought by thinking. Whenever you produce a negative thought by looking at the logical outcome of the event, immediately it generates a sad/depressing feeling that blocks the normal, co-ordinated functioning of all the parts of your thinking mechanism. Right at this time consciously think about the likely positive outcomes and soon the mind is engrossed in finding related links to your great relief.

Reflexive thoughts

These are thoughts that you produce instantly, in micro-seconds, in response to a stimulus from outside. For example, when you hear the siren of an ambulance or the bells of a fire engine, suddenly a sense of alarm is raised inside you. When someone makes unpleasant faces at you, an instant thought of anger flashes from inside.

This reflexive thought plays a big role in your day-to-day functioning, more so in selling. When a client objects to what you have just said, an immediate thought of anger, at times or of helplessness or frustration, gets triggered. If we can not control this, then we might land in trouble by saying something damaging or ineffective.

We will continue our discussion on how to handle these reflexive thoughts to our advantage in the coming issues of Premium.

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Why Buyers Buy Creating the Right Scenario

Administrator — Mon, 15 Aug 2011 04:00:23 +0000

Mr Gopinath

We saw in the July 2011 issue of Premium how the way you use figures of speech and appropriate examples can win the confidence, if not trust, of your prospect, Now, before we begin to go about positioning the product or solution, we must create a ‘scenario’.

When the client is able to see that scene, the relevance of the solution becomes all the more appealing to him. When you watch some advertisements on television,you will notice how they create a scenario and then position the products.

Take this scene: Boy’s party visits the would-be bride’s house to ‘see’ her for the first time. After taking a good look at the girl, the boy whispers to his parents that he does not like her,as she is too dark for his taste. Sad music fills the background and the girl is shown sobbing.

Now comes the phone call from her friend, enquiring about the bridegroom, and the girl explains in great anguish about the rejection. The friend very confidently assures her, “Don’t worry, Use this xyz cream for one week, and see what happens.”.The cream is now shown with a soft tune in the background and the same boy comes calling to seek her hand. (But, of course, poetic justice intervenes and she rejects him.).

The point is you need to have the client to look into the future (that is what we refer to as ‘scene’), then he will understand the relevance of the product that you are recommending to him.

Now I am going to outline a scene creation for an adequate retirement planning product. It will be more or less on the following lines, which you deliver with appropriate pauses and so on.

Most of the times we tend to trade a huge part of our life for money. We work, we earn and we live. We all have families, and all of them have needs. Our emotional attachment (love and concern) for our family makes it quite natural for all of us to work and fulfill all their needs. And naturally it gives us happiness when we see them happy.

“So we spontaneously provide for all that they may need and want. If we have to work harder to earn more to provide for this we quite naturally do so. In fact, we keep looking for opportunities where we can work more and earn more so that we can provide the best for our families.

“We also have a moral responsibility towards our family over and above this emotional attachment. This aspect is unique to human beings. We very naturally feel that it is our duty to provide all support to members in the family. We also take pride in fulfilling these duties. We care and share.

“And then we may have the money to spend but not always the time to properly spend it. There are deadlines to be met, clients to be satisfied, auditors to be attended to, human resources to be engaged in production and a thousand and one such other things.

Cash-Rich but Time-Poor!

“We are quite busy. Being so busy even gives us an illusion of being in command. Most of the time we are responsive to the demands from the world outside. We might willy-nillly postpone a holiday or give up a hobby, ignore our artistic talents as career takes precedence over everything else. We are cash-rich but time-poor.

“Most of us live more than a decade after our active working life. This is the time when we stop earning through working. This is the time when we look forward for relaxing a while. Assuming that we are blessed with good health during this part of our life, we look forward to engaging ourselves actively in matters that interest us the most. We are now time-rich, and if we are also cash-rich, then we can happily trade cash for life, hobbies, exhibiting our talents, holidaying at the choicest of places and a thousand other things that we have been postponing.

Twilight Thrills

“This is the time when our children (now grown-ups) would be focussing on their career, expansion of business, increasing their practice of their profession, just like what we were doing a few years earlier. To expect them to fund our needs and wants,would be a little embarrassing to us. Some may even feel shy to express their desires to the next generation, more so if that wish is what people might call “crazy,” if it is something like wildlife photography for example.

“Suppose we are both time-rich and cash-rich? We get the freedom to follow our deepest impulses. A person becomes wealthy by possessing capital; he becomes independent by having income.

“During our active working life we are happy providing the best to our family. After our working life we can continue to be happy by providing for ourselves and, with a little surplus, we can continue to support the family, just in case they need it.

“This cannot be left to the mercy of destiny, this needs to be planned, estimated and provided for. We also cannot do an approximation on such an important aspect of life. We must therefore, get the assistance of a professional who specialises in planning with nearest possible accuracy the money needed for those golden years.”

Earlier we talked about Rich Language. There is more to come on that topic. Please stand by!

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Why Buyers Buy Lead by Example!

Administrator — Wed, 13 Jul 2011 05:00:49 +0000

Ever wondered why some customers buy a Life insurance policy from one agent, having rejected the same concept/product offered by another agent? The answer lies in communication. The client saw the benefits clearly, he received (heard) the information explained and felt connected with this agent.

My dear Life insurance agent, please understand that the product is not

the differentiator, YOU are the differentiator. And your communication makes the big difference.

Metaphors are like catalysts, making the reaction faster in communication, just as it makes understanding faster. Even a complex subject can be made easily understandable using a metaphor. Let me use a metaphor to explain how postponing investment decisions causes a big strain in the later years of life.

During our school days, in Physics class we learnt about levers and how they operate. Trying to directly lift a huge weight requires huge effort, but if the same weight is lifted using a lever it takes much less effort. Look at the diagram at the bottom of this page.

You can see from the visual that the more the distance between the fulcrum and the weight, the less is the effort required to lift it. And as the distance between the fulcrum and the weight decreases, the effort required increases substantially.

Now assume the weight to be lifted is a Financial Need (Retirement, Higher Education of children, etc..) and the Effort required to it is the investment required to meet that need and the fulcrum is the time of investment. You will see clearly that when the time between the investment and the need is large, very small investment is required to meet that need and as the time between the investment and the need reduces huge investment is required to meet that need.

Yet another example of the loss that one has to incur because one is not prepared for a contingency is the story of the Titanic. There was a huge loss of life in that accident not just because the ship hit an iceberg which made a hole in the ship, but because there were not enough life boats and life rafts on board.

All because the owners of Titanic thought that the ship was ‘unsinkable’; they felt there was no need to provide for those many life boats or rafts. In other words, they thought it an unnecessary investment or wasteful expenditure. Just as some people think of insurance premium as a wasteful expenditure, since in the present condition of their lives no big danger is visible in near future.

One of the important aspects of Rich Language, a concept we broached in the June 2011 issue of Premium, is to create a “whole brain” effect – that is, involving the Right brain and the Left brain functions simultaneously. To do this, we need to take the help of metaphors, stories, small video clippings, pictures, visual representations and riddles.

We must always attempt to communicate our message by involving the three major senses, namely Visual (videos, pictures, colours, highlights), Audio (rhymes, music, interviews) and Kinesthetic (exercises, good ‘touchy feely’ workouts), besides brochures, riddles, puzzles and souvenirs.

We will continue our discussion of Rich Language in the coming issues.

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Spice up Your Talk!

Administrator — Mon, 13 Jun 2011 05:00:18 +0000

Mr R Gopinath.

Since our childhood we have grown up with stories. At home, we frequently use metaphors and similes without actually being conscious of using such figures of speech.

When children play cricket, ignoring everything else, we tease or scold them,with this put-down: :“Do you think you are Sachin?”.

Or, when we catch somebody sleeping during day, we criticise: “Don’t sleep like a Kumbakarna”. Or, talking about the stunning lady who has taken up residence near our house, we may say, “Her face is as bright as a flower in bloom”. And to someone else, “Why are you so pale-faced as if you have seen a ghost?”

Both stories and metaphors are highly useful in effectively communicating our ideas. In NLP- Neuro Linguistic Programming – Rich Language is an important dimension.

There are four primary aspects of Rich Language:

Metaphors

Stories

Conjunctions like ‘because’, ‘and’, ‘yet’, ‘also’ and such

KAVI (Kinesthetic, Audio and VIsual)

Metaphors:

Examples make things easier to understand. Examples add value to the ideas. Let me give you an example!

Let us say you are trying to explain to the customer the concept of the “Power of compounding”. The mathematical illustration will be somewhat like the table at the bottom of this page.

It is a matter of fact chart and conveys information but does not carry inspiration. It can be introduced with a metaphor, say, “the power of compounding is like growing a tree”, it will be all the more clear to the customer.

“Sir, imagine a farmer growing a mango tree. If he allows the tree to grow fully, then it will spread its branches and start giving fruits year after year. But if the farmer were to cut the growth at the very first sighting of a mango on the tree and keeps doing so for some time to come, he may get a few mangoes but he will remain poor. If the same farmer is a bit patient then he stands to gain a lot.”

This metaphor, alongside the illustration will enhance the effectiveness of your communication with him.

One more example to show the power of examples (read: Metaphors):

One of the most talked-about topic nowadays is financial freedom. Listen to this: “Sir, the birds in the sky enjoy complete freedom. A bird can choose to fly East, or West or in any other direction. It enjoys that freedom because of its wing power. In the same way, if we can generate enough cash flow for our golden years we can enjoy complete freedom to choose any option that we like the most because of our wealth power”.

Yet another example of an example: It’s about retirement planning. Sample this sales pitch: “Sir, right now you are the pilot of your family and you shoulder the responsibility of reaching the family members to their destinations they are dreaming about.

With this plan I can assure you one thing … you will remain the pilot not for just now, but forever .. Even at the age of 70 or 80, you will never become a passenger who needs others to help him since this plan will take care of all the financial requirements, both yours and theirs.’’

We will continue our discussion on rich language in the coming issues of Premium.

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Plan Big Time!

Administrator — Fri, 13 May 2011 05:00:12 +0000

Mr Gopinath

Planning is the first step towards taking charge of your life, and no matter how ambitious you are, without a plan you will be lost in the rough seas of your profession or business. Mr R Gopinath on how to reach the very top with a well-charted plan. Here’s to Happy Planning!

This is the time to plan. Right at the beginning of this fiscal let us sit down to draw up a business plan.The time spent in planning can save us much time in executing the plan. Let me share with you a piece of history to prove this:

Most of the ancient temples in India are quite huge. They have taken a few centuries to build. The kings who patronised such efforts dedicated vast resources to the construction of these magnificent structures. The Madurai Meenakshi Sundareswarar temple took almost three centuries to be built. The Tiruvannamalai Swami Arunachaleswarar temple took almost 14 centuries and the Tirunelveli Thiru Nellaiyappar temple took nearly four centuries.

But the biggest temple in Asia, the Big Temple at Thanjavur, or the Brahadeeswarar Temple was built by King Raja Raja Chola in 25 years time. How could he achieve this feat? The secret: He spent close to two years drawing up a complete plan for its construction. The blueprints were done, modified and then adopted. Resources such as people (the plan specified both the numbers and quality), finance, materials and actions required to be taken at various stages were all built into the plan. This made execution simple, systematic and without major disruptions and halts.

Therefore, investing some time in planning is not just some time-worn management fad, but quite a prudent necessity.

Since we are at the beginning of this financial year, let us now plan for this year.

A Life insurance agent is an enterprising professional; meaning, he is a professional, owning his own business unit. And every corporate body draws up a business plan. So must our agent friends.

I suggest that we draw up a plan with three time-frames in focus:

1) Life

2) The next five years, and

3) This year (2011-2012)

Exactly in this order.

Life planning

I believe that 95% of whatever

happens to us in our life are caused by ourselves and maybe 5 per cent by factors such as destiny and environment. If that is so, then we can certainly enjoy all that we want in life. But we need to take charge of our life. The first step towards that is to design a plan. Let us, for starters, ask ourselves a few questions:

What do I want out of my life? What are the things and materials that I would like to own or possess? What records would I like to set, what awards, certificates, recognitions and merits should I earn? What should be my contribution and what would I like to give? To whom would I like to give? For what cause should I live? What would I like to be known as?

Five-year plan

What should happen within the next five years towards building a life of character? Our profession is the foundation on which all the above can be built. Be it financial strength or people support, we depend primarily on our profession for earning a decent livelihood. So what do we need to do to realise our goals within the next five years?

What should be my commission earnings? Should I be a TOT (Top of the Table) , or even multiple TOTs, by then? What type of infrastructure will I require to reach such heights?

This year (2011-2012)

If in the next five years I want so much to happen, a minimum of 30 per cent of that should be happening this year itself.

So what should be my business performance this year, in terms of policies, in terms of premiums, and in terms of commission earnings? What should be my comparative standing in the industry? First? Second? Within the top 25?

A plan necessarily has three aspects: 1) Goals, 2) Actions that will help us reach those goals, and 3) Resources that will be required to carry out those actions.

Let me give you an example. The goal is to achieve MDRT (Million-Dollar Round Table) this year. That is, to achieve a First commission of Rs 7,89,100 or procuring a graded new business premium of Rs 31,56,400. (GOAL)

If on an average I expect to earn about Rs 40,000 premium per policy then I will require about 80 policies this year to complete my MDRT. To procure 80 policies I will have to meet about 320 people this year on an average, that is one NEW business appointment every day (ACTION).

To do this I will need a minimum of 4 hours every day (Resource: Time) for new business alone, I will also require two persons (Resource: People) who can take care of servicing activities so that I will get these 4 hours to work on new business. Maybe, I will require some office space, two computer systems to support those two staff members in servicing activities (Resource: Materials and money)

Unless all the three – Goals, Actions and Resources – are part of it, the plan is incomplete.

The next important aspect of this exercise is that the PLAN HAS TO BE DOCUMENTED. Without that, the plan is just a mirage. Let me tell you a story to illustrate this.

The pilgrims who visit Rameshwaram make a Shiva linga with their own hands out of the sand in the beach. Then they bathe in the sea before offering prayers before the Shiva Linga that they themselves created. Since there are thousands of pilgrims who do this, each will leave behind something to mark the linga created by him, so that he can get back to the right one to pray before.

One pilgrim looked around and saw a cloud right above his Shiv linga, So he decided that this would be his mark of identity and went on to bathe in the sea. You can guess what would have happened? A plan that is not documented would be no different from this man’s story.

I would therefore suggest that let us start this new year with a PLAN and then document it, so that we can review it at the beginning of every month to decide if any course corrections are required. Remember, 95 per cent of whatever happens to us are of our own making; we are not victims of our environment, but a product of our own choices. So, the first step in taking charge of our life is designing our own PLAN.

Our business plan should not be a mere mathematical estimate based on past performance. It should be an expression of our ambition, a design of our aspiration. It should reflect our character and be a tool of inspiration. It should be a path leading us to excellence. Our business plan should be so designed that all our potentials are fully realised, transporting us to a world of abundance. A plan that will raise us to levels of supremacy in our field. A perfect tool in our hand to discipline ourselves so that we stay on track till we reach our desired destination.

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Questions: A Friend of the Buyer AND the Seller

Administrator — Tue, 12 Apr 2011 18:00:16 +0000

Asking the right questions is central to understanding your prospects. What’s more, they help them understand themselves. Mr R. Gopinath explains what these questions are and how to pose them.

MR Gopinath

We all have been trained well in the expressing part of communication, and over years we have become rather good at explaining to others what we feel (feelings) or what we think (thoughts and ideas). And this capacity naturally plays a major part in our success in selling.

We also need to get expertise in the other aspect of communication: Listening. You might have heard about: Active listening, Participative listening, Empathetic listening and a big list of such aspects about listening.

Each one of these concepts will be useful in various situations. We know there are at least two parties to communication. So even to become an effective listener we need the other party to be a reasonably good expresser.

If for some reason (it happens quite often) the prospect is not able to express what he wants, then we are in difficulty. Therefore to get to understand the prospect better we need to get skilled in asking questions. Clean questions.

Let me explain what type of challenges there are in understanding precisely what the prospect wants. Let us take a look at the words and statements:

Every time I have invested in stock markets I have lost money.

They say that we must not …

It made me feel sick when I came to know…

These statements communicate nothing specific for you to respond to. The problem here is that the prospect himself is not clear about them.

‘Every time’ is the word used, does it mean many times? Or does it mean most recently? Or has it so happened that he invested only once and that ended up in a loss? We don’t lose while investing, we lose when we exit our investments.

Look at the second statement given above, “They say…” But who are ‘they’?

The same thing can happen even when someone comes up with objections:

“I don’t believe in Life insurance”

“I always invest in real estate”

“They say that during young days you must invest in share market”

Instead of trying to handle them directly, let us ask them questions. But, remember, clean questions. These are questions that are: i) Simple, ii) Short and iii) Single.

Let me give you some examples here:

Example 1:

“Is there any impairment in the personal history that will adversely affect the risk being underwritten?”

This is a complex question. The client may not be able to understand the full meaning of this.

Instead we can ask:

“Since health is an important factor in Life insurance, can you please tell me about any treatment or illnesses you may have had in the past?”

Example 2:

What percentage of your income is spent on essentials? (Complex)

Education, health and comfort of family have to be taken care of. What percentage of your income is spent on these? (Simple)

Look at an example of multiple questions:

Are all your policies with our company or do you have any policies from other companies also? Are they unit linked? Apart from this, do you hold any mutual funds?

Which of the above questions can the client answer with clarity?

Questioning skills are vital to understand what is going on in the client’s mind. And many times, questions can help the client himself get things clarified.

Let us look at some of the objections we face while we are explaining some products or plans to our clients.

Client says: “I am happy with my existing arrangements.”

We can ask questions like:

“Good to hear that, sir. Your present associates must have certainly qualified for this statement…

“Is there anything specifically that you are happy about?

Does this arrangement cover xyz…?.

Client says: “I have huge assets”

Then our questions can be:

* How much of these assets have you acquired in the past 10 years?

* How much more assets are you likely to add in the next 10 years?

These questions help us in understanding the client better and moreover it helps the client himself to understand his ideas better.

We will see more of various expressions of the client and our responses to it in the coming issues.

The author is Founder and Chief Executive Officer of Go Past Centre for Learning Pvt Ltd, Chennai and former CEO and Managing Director, LIC Lanka Ltd. Responses and comments on this column are welcome. Email: feedback@premiumonline.in

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Why Buyers Buy: Tackling the Trust Deficit

Administrator — Sat, 12 Mar 2011 18:00:17 +0000

Mr R Gopinath.

A prospect’s frankly expressed doubts about your professional integrity should not stop you in your tracks. Rather, you must understand the genuine misgivings he may have about your product and how he stands to benefit from it, says Mr R Gopinath.

By and large people are not comfortable thinking about death, disability or even old age. Even when a person is growing older, he would still like to consider himself young. So if people are not comfortable thinking about death, you can easily understand why they would be much less comfortable talking about it. Our science of risk management does not easily cut ice there. When the risk is not perceived at all, transferring the risk at a cost to the insurance company becomes a very remote possibility.

Let us say a Life insurance agent goes to meet the prospect after extensive preparation. How to start the sales discussion, how to present the solutions and how to motivate the prospect for action — all these have been mentally rehearsed. As the discussion starts with the prospect, the agent is quite energetic and is in full flow. All goes well till the prospect starts putting in objections. The moment this happens , the agent feels blocked, and he starts feeling he is losing grip on the process. What appeared to be a smooth sail suddenly appears caught in a turbulent storm. The outcome appears to be uncertain now.

It is quite natural to get upset with such hurdles that crop up on the path to striking a ‘deal’. More so when the objection appears quite silly or unreasonable. But the best thing to do in such circumstances is to keep calm and handle the situation sensibly, rather than panic or get emotionally upset. We must recall all that we have seen in the last seven issues under this title. This will give us a broad idea of what is happening in the prospect’s mind.

One of the presuppositions of NLP (Neuro Linguistic Programming) is that “Behind every behaviour there is a positive intention”. Let us understand this statement in totality. Behaviour that appears silly or even unreasonable to us has a positive intention from the point of view of the person who is behaving that way. If we can understand that positive intention then we can alter his behaviour.

Let me give an example. Immediately after we go through the preliminaries of our interaction with the prospect, he says, “I have lost faith in all insurance agents. They misguide us for their own benefit.”

We know this to be an unreasonable statement. Not every agent does it. In fact, a majority of the agents work only for the client’s welfare. Faced with such an objection, all our preparations and homework appear to be thrown out of gear.

We don’t have to feel that way at all. Let us believe that there should be a positive intention on the prospect’s side that has triggered this statement.

Let us look at the various possibilities in terms of positive intentions:

The client wants to safeguard his own interests

The client wants to be very sure about the person to whom he is going to entrust his hard-earned money

The prospect is particular that his benefits may have to be secured well

The prospect is currently busy on some other project which is occupying his mind.

The possibilities can be any many. So our job then is to find out what is it that is going on in his mind. The best way to do so is by asking him questions. Our justifications at this point to the effect that we are a different from the general run of agents may not impress this prospect. Instead, we need to start asking questions that could eventually win his trust.

For example we can ask the prospect, (prefacing it with, say, “I am able to sense your feelings”):

“What do you feel that I must do to qualify for your trust?”

“What benefits in a policy are very important for you?”

“What is the most important feature for you in selecting a financial instrument?”

While most of us have been trained in explaining products or presenting convincing figures and numbers during sales discussions, very few of us have been trained in asking such questions.

We need to ask CLEAN QUESTIONS.

CLEAN QUESTIONS are those that are: i) Simple, ii) Short, and iii) Single.

Let us learn more about such CLEAN QUESTIONS with some examples in a sales scenario in the coming issues and equip ourself with ways of handling difficult sales situations arising out of the buyers’ psychology.

Meanwhile, I will leave you this month with an interesting true incident about the buyer’s psychology below.

The author is Founder and Chief Executive Officer of Go Past Centre for Learning Pvt Ltd, Chennai and former CEO and

Managing Director, LIC Lanka Ltd.

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