Increase Your Income With Cross Selling
First in an ongoing series
By Phil Calhoun
This is the first in a series of articles about how to expand your business and increase your success through cross selling. Why this series? Our readers know that cross selling is an ideal way to generate more revenue but many do not have a process to get started or maintain momentum. In all business endeavors, success is assured when we use an organized process.
We will share tips from experts to address situations that health insurance alone will not solve for business owners and individual clients. There are many ways you as a health broker can add new lines of insurance that will increase your value and add to the good work you already perform for your clients.
The average California insurance broker makes $98,252 (as of October 27, 2022), but the range typically falls between $84,927 and $120,053. Adding new insurance lines within your license scope can bring from $10,000 for one case to well over $100,000 for several cases — all new income for the health broker.
This series will give you the resources you need to provide insurance solutions, supported by valuable collaborative partners: from helping clients determine what coverage they need to manage the risk of unpredictable life events at any age, helping loved ones be prepared for these life events or managing expenses in retirement. And of course, we will demonstrate how to be paid for this work.
It’s all about process
The management of client education and marketing — to lead management to presentation and then the closing sale — is about process. When you build your process you effectively build a response to these concerns — addressing the need for asset protection.
In most cases health insurance professionals already know they can select new insurance products that require no additional license and which have proven to naturally fit their current customers. They just need a process to get started and consistently maintain success.
For many health insurance professionals, it’s a smooth transition to include life, long-term care insurance, or annuities. For group health clients, many product solutions fall under a life and health license. As a trusted group insurance professional, you can provide these solutions on a group sponsored basis only, but also offer interested employees more coverage and buyup options. Your relationship with employees opens the door for more work and referrals.
Turning back the clock to the 1960s, when life insurance brokers were first able to offer medical plans for clients, it was a natural transition to offer health insurance. Customers already experienced the benefit of life insurance and with a good relationship with their life insurance broker, the move to medical insurance was natural. It is a similar natural fit to offer life, annuities and long-term care products.
Where to begin: start with your existing clients
Carriers and general agencies suggest the first step in cross selling is to look at your relationship with your customers. LIMRA states that 80% of your new sales revenue will come from 20% of your existing base of customers. This significantly lowers the cost of new business acquisition.
Introducing new insurance products to your clients is easily done when you have an outreach process. Success will come from implementing that process: determine how to get information out, how to move to further education, and how to move to a personalized quote and finally complete the application.
The most popular first step to build is a client communication process.
When emailing to a large number of clients, it’s common practice to use Constant Contact or Mail Chimp. Client focused newsletters can educate and surveys can identify needs or risks expressed by your customers. From these outreach efforts, you can develop solutions related to insurance products you can offer.
Build your customer retention process to include multiple touches.
The Golden Rule is the more touch points you make in a year the greater your client retention. Make each contact as valuable as possible. Focus on ways to educate your clients to improve their knowledge of their benefits. This demonstrates you are concerned about their health and wellness. When you focus on a process to introduce coverage options and cost saving tips in addition to health insurance, you open the door to saving your clients money and improving their financial situation. With a consistent
education efforts, you will become a trusted advisor and advocate. With a process in place, you will have a disciplined approach to move to the sale.
Asset protection is top of mind
Retirement income concerns are very common, and usually center around secure savings. Both annuities and permanent life insurance are often a good fit. Long-term care insurance also addresses these concerns since expensive levels of care required are not covered by health insurance. These solutions allow savings to grow and be used for other expenses.
Health brokers using a combination of tools to educate their clients will see many opportunities to address these concerns. Working with marketing or general agencies that offer a proven process centered on client education-based campaigns can be highly profitable.
As one example, Medicare brokers often have hundreds of clients aged 65 and over. While some of insurance products are clearly more affordable for people in their 50s, many policies with the right coverage can be written for those over 65. Also with group benefits brokers, you have the opportunity to work with business owners and their employees to address the same issues.
Consider building a process to address these lifetime events, which all clients experience directly or through loved ones:
- Dealing with the birth of a child/grandchild
- Finding safe investment options built for both current needs as well as longer lifetime needs
- Covering the costs of medical care in older age
- Providing funds to cover expenses and debt at death
These realistic needs and concerns can be addressed with insurance products all health insurance professionals are licensed to offer.
Cross selling often happens in one of three ways. Health brokers:
- Learn about products and offer them as a natural part of their business. They enjoy some sales and product support with a carrier or general agency.
- Partner with another broker/agency who supports the broker marketing and sales efforts.
- Handle owner policies and work with a few friends but don’t actively work with clients.
In future cross selling articles, we will focus on the process to offer your health insurance clients life insurance, annuities and long-term care insurance as a natural cross sell. We will hear from experts about the steps to grow your business in these insurance lines. We will explain your options to include collaborating with experienced advanced planning professionals on a per case basis and/or working to build your product expertise through general agencies who provide the resources health brokers need to either get started or expand.
We will outline the professional assistance available for quoting, case design and implementation and how as a health broker you can exercise these options to meet your client’s needs. You will also see how a disciplined process will help you close sales to increase your income.
Bottom line: We will help you help your clients build a defense against the risk of expensive personal health issues. When you add value to your clients by bringing new solutions for their concerns beyond what health insurance covers, it is a Win-Win. All in all, your success is enhanced when the new products build on current client relationships and needs.
PHIL CALHOUN is owner and publisher of California Broker Magazine. Phil also is a leader in coaching health insurance professionals. He is an active member of several insurance associations including the California Association of Health Insurance Professionals (CAHIP) and Orange County, Los Angeles, San Diego and Inland Empire Health Insurance Professionals.
Phil’s book “The Health Broker’s Guide: To Protect Grow and Sell Commissions,” is available free at www.healthbrokersguide.com.
He offers complementary 15-minute coaching sessions.