Permission Marketing - IFBC Fall 2000

We live in a time when information is both inexpensive and invaluable. How can that be? When there is so much information at our fingertips why we are willing to pay for a little of it to be delivered to us in an understand-able form at just the right time?

Why are professional advisors such as lawyers, accountants, stock brokers and financial advisors making so much more money than they have in past?

Why are people buying more specialized magazines than ever before?

Why are more and more people hiring personal trainers and personal coaches, accountants, and tax advisors to help them?

Why has information Television become so common that is seems that the news is on 24 hours a day?

What are we all looking for?

We aren't buying Wired Magazines and Yahoo and Business 2.0 for the pictures of hardware and for the ads.

We aren't buying the Sunday New York Times, the Financial Times of London, Forbes, Barron's and Fortune in record numbers for the pretty pictures.

It used to be that we were willing to pay for help dealing with specific in-formation, maybe just a little reluctantly sometimes, when we recognized that we didn't even know where to begin to get it. When we bought a house, or made a will, we needed a lawyer. When we had tax problems we needed an accountant. That was the type of thing that we hired a specialist to help us with.

More and more often now it seems that we are willing to pay for help when what we see just doesn't make enough sense for us to make a decision. Sometime this happens because we have so much information that we just can't sift through it all.

If we can't make that decision, then we can't act. That makes us uncomfortable. We no longer feel that we have the luxury of time. We have to make a decision and get on with life or face a backlog of things to do that will, eventually, overwhelm us.

We are all, it seems to me, looking for appropriate and timely information. It has to be in a form that we can understand and it should be easy to relate to the decision that we have to make.

We are looking for something that we can use in our day to day lives to give us an advantage. Life is busy enough. We need a leg up whenever we can get it.

This is the information age. That is what we, and our clients have to contend with every waking hour of every day.

We get our information from all sorts of sources. Some are less obvious than others. On the highway we see trucks with ads and billboards by the side of the road. We listen to the radio and talk on our telephones. And that is just on the way to work!

I was walking to lunch in Toronto with a few friends and we were talking about this. So we started mentioning advertisements that we saw. There were litter bins and cabs. Buses wrapped so that you couldn't see the win-dows and signs outside of stores.

People were wearing clothing that would have been considered walking billboards when I was a kid.

Then there are the big electronic billboards that have more ads than a free web site. They flash messages at us when we least expect it.

Televisions are on everywhere that we go. Even elevators have television monitors that feed us information in the 4.83 second that it takes to go be-tween floors. In the underground passages under Toronto there are Investors Centres that show the business news channels on large screen televisions all day long.

Who won the race? How is Tiger doing? What is happening with Micro-soft? How is the market doing? What stocks are going up?

What about the dollar?

Information is everywhere! Little of it is of real interest to us, but we absorb it all, adding to our information overload. No wonder we all feel overwhelmed by everything that we have to remember!

My job is to give advice. I make recommendations for a living. I get paid when my clients act on my recommendations.

My clients are all bright people. Most of them are lawyers. They all know that they could buy the products that I sell from any agent. More and more they know that they might even be able to buy these products directly from the companies. No agent will call the ad says and they have seen it.

My clients want the agent to call. They get upset when they don't hear from me! The same is true for every agent who I know. A survey by Dan Richards of Marketing Solutions was written about in the Star on September 23rd. In it, Mr. Richards observed that 41% of respondents to the survey said that they'd change financial advisors for better investment returns. That is no surprise, but 35% said that they'd change advisors to find an advisor who communicates better with them. That should be a wake up call to us all.

Are we communicating with our clients in the way that they expect us to?

Our clients look at insurance spreadsheets and their eyes glaze over. Com-parisons? Analysis? What are they?

Read the contract? I hazard to say that only a few of my lawyer clients have read their contracts unless there is a problem. The rest of my clients are probably the same. They rely on us to break through their confusion.

We are there to help them to wade through the reams and reams of informa-tion. Our job it to find out what they need, and then to reduce the choice of options to those that fit their individual circumstances.

That doesn't mean that clients don't want to make a choice. It is clear to me that they want very much to be the ones to make the choice. They just want to have some understanding of the choice that they have to make, preferably before they make it. They also want our recommendations as to what they should do. Otherwise - why are they paying us for our advice?

How can they decide among 2,000 or so life insurance options when they don't know how much insurance they need, or for how long, or why they need it? All that they have thought of is that if anything happened there might not be enough money. That's why they agreed to talk with us about it in the first place. They are acting responsibly. They are risk adverse. They know that money that shows up at the right time is often the only solution.

As Ben Feldman said - that is all that insurance is - money at a discount for future delivery.

But that isn't enough to help someone decide on a solution is it? They have to know what the choices are, and which ones fit their needs best.

They depend on us for that. We clarify needs and options. We show them their choices. Then we make a recommendation about which choice fits them best.

That is what you do for your clients isn't it?

Isn't that what you all do - every day?

So here we are, just a few minutes into this hour, and I have determined that each and every one of you already understands Permission Marketing and there is no need for me to go on.

Don't you believe me?

If interference marketing is when an advertiser constantly has to be in the customer's face just to get them to pay attention to the message, and Per-mission Marketing is when the client gives you permission to contact them to make convey a message, then aren't you all already permission market-ers?

None of you hold hostages to get your prospects to talk with you - do you?

I always found that the pesky 10 day right of recision got in the way of twisting arms to make a sale.

OK, so we are all permission marketers, provided that we have the clients to see. But where do these clients come from?

Aha! I said to myself early one morning. If they want me to call when they want information or when they want something explained, then how can I give them information that they will want to speak with me about?

First there was a newsletter - we bought it from a service. Then there was a second newsletter that we did in house. Then there was another, and an-other. Well, I don't have to have my head banged against the wall more than a dozen times to learn that the wall is hard. The clients weren't calling to discuss the great ideas in the newsletters. Something was wrong.

Then I realized that it was the occasional photocopy of an article that I sent out with some of the newsletters that got calls. That was what they wanted - photocopies. So I tried mass mailing photocopies and that worked just about as well as the newsletters, well, not quite as well, and it took a lot longer to send them out.

So what was it? Why had they responded to those photocopies? So I thought about it for a while and went back to my old habit of clipping arti-cles of interest to my clients and sending them copies. I wasn't mass mail-ing - I only sent a few out at a time, since they were generally of specific interest to only a few people. And they started calling for information again.

Well John Ferguson didn't train any fools. It worked and I kept on doing it. We subscribed to dozens of magazines and papers and my wife's eyes began to cross. As our head of research she had to go through everything working from lists of subjects and topics of interest, then she photocopied and collated with the client lists.

Boy was she glad when the Internet developed into a credible source of cur-rent information and she could reduce the number of papers and magazines that she had to read! Our recycling bins are also much lighter now.

Many argue that computers will soon be able to provide this level of spe-cific information to everyone. Yes, maybe, provided that they know that they are looking for it. Otherwise, it is just a rapidly expanding, poorly in-dexed database. As I said, I have found that information has to be of spe-cific interest to an individual to get them to pay attention to it. If not, it is just spam.

The survey from Marketing Solutions found that only 12% of clients who use the Internet want to deal with their advisors principally through e-mail according to Dan Richards. Now that was interesting!

I live a good part of my life attached to the world by two umbilical cords. One is a telephone headset, the other is the Internet connection. Through these I run my business from an hour (longer during the half day that is rush hour in Toronto) outside of the city.

Given that my clients are almost all located on Bay Street, that means that I have had to learn to do business from my office as much as possible - or spend my life on the highway.

Using Permission Marketing I have been able to build my practice to allow me to spend most of my time in the office, touching hands with my clients and prospects over the telephone, by fax, courier and e-mail and only occa-sionally face to face. Yet my experience is very similar to that described by Mr. Richards.

While most of my clients have e-mail and are comfortable using it, few feel that it can be their primary source of information. Most need to speak with me. They need to know that I am a real person who thinks like they do, and who cares about them, as people. They need to hear a voice talking with them about their problems. The Internet is still a bit too impersonal for most people to feel that it can adequately fill their need to be dealt with as individuals.

They say that they love to receive the information that we send them by e-mail. They notice if they don't get a picture or cartoon from me at least once a week. If they don't get electronic clippings from me, they call after a few months to find out whether I have forgotten about them. They want timely information about the things that interest them, about their profession, and about their peers.

So we provide it. When I am reading things I think about my clients and ask myself who would find this article interesting? Does this affect anyone indirectly? Is this something that I have discussed with a client?

Surprisingly, most people's interests don't change that much over time and what was of interest to them last year is probably still of interest to them now. So we keep track of these things and when we see something, often two or more years after the client and I have discussed it, we send it out to them.

It is amazing to me how pleased clients are that we have remembered their interests. This works even better when it is their family's interests that we remember!

This is like sending out birthday cards. When I first started in this business we were so desperate to find reasons to speak with people about what we do that we sent out unbirthday cards six months after a client's birthday. Well, if you expand that quite a bit, you have permission marketing.

When I want to talk with clients about their group insurance programmes I send out articles on employee satisfaction, and on employee retention, and on employee training, and on corporate growth plans and on employees buying in to the employer's vision. I will also send out articles about the competitive job market and about what other, similar employers are doing. These are all subjects that are related to the one that I want to talk about. If I choose the articles well, the client will call to talk about it with me.

Sometimes this process takes a while, since I don't like to send out so much information that I become an interference marketer. So I may send one or two articles a month for six months to a year before they call. However long it takes. That way I always have new prospects to talk with.

Another thing that I find useful is to send out messages every six months or so asking whether people want me to continue to send information to them. Most reply asking me to keep it up. Some ask for less, and that is a sign that I have been pushing it - and it is easy to push it when you get into the rhythm. Some ask for more.

Remember, permission marketing means getting the client's permission.

We do a fair amount of work for large groups. Each of these groups has a number of people who we work with. There are CEOs and CFOs, execu-tives, HR Directors and HR Managers. I find that it is useful to send each of these people articles and, depending on the company's e-mail policies, the occasional joke, animated picture, thought for the day or cartoon. They also like to know what their competitors are doing and so I send that type of information to them as well when I can find it in the public domain.

General demographic information is also something that most HR people find interesting, so that gets added to their list. They also get articles on em-ployment law, since that is a big thing for them. What is happening with law suits for wrongful dismissal? What sorts of severance packages are being offered? How are EAP programmes working? What intangible benefits interest employees? What are the most expensive forms of disability or illness for group plans to deal with? How can plans be improved? What about generic drug plans? Those are the types of things that we send to HR types.

Many of our groups have employees who travel a great deal and some have employees in the US and other countries. The HR people are often the ones who these employees contact for information and for help. An HR person in Canada often has great difficulty in getting the information that these employees need when they are overseas. So I encourage them to contact me with the questions and I use my contacts and search engines to find the answers.

To help with this I participate in a few international agent's discussion boards. Often, within 10 minutes of asking a question on a board I have the answer from someone. It is just a matter then of forwarding it to the client.

A few weeks ago I was contacted by the senior HR people in a Toronto law firm. They had a partner moving to the UK and wanted to know about private health coverage for the family. Within 20 minutes I had a list of the plans that were available and approximate premiums, and had spoken with an agent (first by e-mail and then by telephone) in London who specializes in these products.

The client's employee in the UK had the answer to his questions, and a quote on his e-mail when he got in to the office the next morning as well as the contact information for the agent.

Did it cost me anything - yes - the cost of a 5 minute telephone call to Lon-don and about _ hour of my time.

Did I get mileage out of it? Of course I did, and the employee bought a chunk of life and disability insurance from us before he left for England. Everyone won, and I didn't have to go looking for the client - he found me.

The firm looked good, and so did the HR person who asked for help. It cost them nothing to ask for help.

After just a few of these events the clients begin to contact me about a wider range of things. Many of them are outside of my field, and I try to refer them to someone who can help out. But at least I get the choice. Business almost always results from these calls, so I keep encouraging them.

Permission Marketing goes way beyond that however. The idea is to get new prospects to call without my having to do any prospecting at all. That allows me to spend my time helping people to resolve their financial prob-lems - with insurance.

I still use the standard prospecting talk from the Grannum Method to get re-ferrals. Whenever I help a client with something I point out to them that I am always looking for new clients just like them.

When they thank me for having helped them, I tell them that the one thing that they can do to help me is to refer new clients to me. It seems to me that when someone calls me to discuss their insurance, they are expecting to buy. That takes away most of the sales pressure and I can concentrate on identifying the prospect's needs and on providing solutions to them. That is what I do best, and, without having to sell the prospect on the value of in-surance, the level of resistance is greatly reduced. It is also impossible to develop call reluctance when everyone who you call wants to speak with you.

I have found that, whenever someone is referred to me, it is a very good idea to thank the person who referred them, in writing. A short note ac-knowledging that the referral has called, and thanking the nominator, is all that it takes. Everyone likes to be thanked, and to do otherwise would be ungracious.

Another great source of new business is from those who leave the groups that we handle. I make a point of being the one to explain the conversion options to these people. Many will be going into employment that does not provide the same level or quality of benefits. For these people the need still exists, and new coverage is often, for those who are insurable, far and away the best option.

The additional benefit to this is that we often get asked in to review the group plan of the new employer. It doesn't take many new groups to make a year very profitable.

One way that I am able to do this is by offering to provide a comparison of the employees former plan with their plan with their new employer. Often this analysis shows several areas where the new employer's plan can be im-proved, generally at a very modestly increased cost. It is only a short step from there to quoting the group plan. I also get to meet new HR people and to add them to my permission marketing lists.

After a few months of receiving information from us, these HR people often begin to rely on us for their information. Then they call to ask us questions about their plan. Soon they begin to think that we are their agents. The next time that the group renews we get our shot on a very favourable basis.

Sometimes we win, and sometimes we don't. But now I never have to go looking for new people and groups to do work for.

We use a speciality to get us in, and then expand from there. For many years I have tried to learn everything that I could about disability insurance and group plans. Eventually I began to develop a bit of a reputation in this area and we began to pick up the group LTD portion of large group ac-counts. We would improve the plan, and often we would add a significant individual disability component to the plans, creating rate stabilization, non can definitions and high quality portability. When we work with these clients we provide them with the highest level of service that we can. Our method is to always act in the manner that we would like our advisors to act in.

We respond immediately to requests. Sometimes we provide information even before it is asked for by knowing where the client is going with their question. We deal with the claimants. We work on rehab programmes with the employer. We help to co-ordinate medicals. We stand between the cli-ents and their insurers, trying to improve the clarity of communications. We talk to people about their problems. Generally that is really what they need and want.

Soon the HR person in charge of the group realizes that they want this level of service on the rest of our group and they ask for my help.

Sometimes I get a telephone call that goes something like:

Hi Lawrence - I know that you don't normally do this, but would you mind taking a look at the rest of our group plan. We'd really like you to do it for us.

What am I going to say - no? Would I tell them that I didn't want their business? Not on your life! I've earned it!

Sometimes the caller says : I know that I should know the answer to this, but it is easier to call you than to look it up.

Sometimes the call is from someone who wants to buy life insurance. Sometimes it is from someone who wants disability. Every one of these calls is welcome.

This too then is Permission Marketing. Provide the information. Act as though you are already the agent of record, and soon you will be. It is, what I was taught to call, assumed consent.

I find that one of the best decisions that I made was that I worked best with those people who I like. Since most of our relationships with clients last for decades, I decided that we had to look forward to speaking with our clients. This is particularly true for disability insurance since we often deal closely with disabled claimants for many years.

When I speak with someone who doesn't meet the profile that I have for clients, I now find that it is easier to refer these people to another agent than to try to work with them. I don't do as much business as I probably could working this way, but, since I had found that the clients that I didn't like as much were giving us most of the headaches, this has actually allowed us to work more effectively. The side effect is that we really like doing the work for our current clients! We look forward to their telephone calls and are genuinely pleased to speak with them.

If only all of life's choices were so easy to decide on.

There are five key marketing rules that we follow that may well be the key to our success in these changing times:

1. We have developed long-term vision to match long-term planing. Most sales people and advisors focus on short-term prospecting ac-tivities instead of building their practices for the long-term. They hunt for the next hot prospect, or for a different product that will bring them success. But success comes only when you have a clear vision of what you want and a achievable plan to get there;

2. We have established a referral generation process and use it every day. An insurance or financial planning practice thrives or fails based on its ability to attract new clients. Sales people and financial advisors who attain the greatest success are often not the most technically competent nor may they be the best salespeople. They may just be the best marketers of their services. Having a process for consistently generating referrals to ideal prospects with the least work and at the lowest cost is the way to attain the success that we seek, and deserve;

3. We have restructured to generate a high level of renewal commissions and fees or trailers. All businesses have two goals: to create ongoing positive cash flow that increases every year and to build up capital re-serves for the future. Renewal revenue - predictable income that con-tinues without further effort from you - can help to meet both of these goals;

4. We focus on our clients and what they need rather than on the prod-ucts that insurers sell. Sales people and advisors have become product experts, but they don't study the hopes, dreams and fears that motivate their clients to act. The next generation of entrepreneurial sales professionals will need to know much more about their clients and why they act on an idea, or don't act on it;

5. We have specialized in a niche market. In many professions, such as engineering law and medicine, professionals have dealt with informa-tion overload by specializing in relatively narrow fields or practice. But many sales people and advisors are still generalists. They believe that the key to success is to be all things to all people. Unless you are a marketing specialist with a wide network of technical specialists who can help you, this mass-market mentality is a prescription for frustration in the client-centred marketplace. If you want to specialize you must focus your marketing efforts on the specific groups of people or on the niche markets that can benefit most from your specialized services. This will take a game plan and time to achieve.

By following these basic rules, you too will be in a position to benefit in the new client-centred marketplace and to attract your ideal clients with less effort. They'll bring their business to you and you won't have to chase after sales anymore.

When I was a trainee, John Ferguson taught us about what he called China Eggs. These were prospects who looked great, but who never gave us any business. For years I believed that china eggs were a problem and regularly culled my files to eliminate any prospects who had been on the list for a year without any business resulting.

In about the mid 80's I began to notice that a number of those who I had previously thought to be china eggs had begun to do business with us. This caused me great concern and I began to wonder whether there was business that I had worked on that was going to others because I wasn't following up.

So I went back to my old lists and started to contact the china eggs that I had culled. The ratio was the same for them as for new referrals! Many of them were glad to hear from me again and were finally ready to do some-thing about their financial problems.

That was an eye opener. I began to realize that the things that had made these people good prospects were still true. They hadn't changed and nei-ther had what I was looking for in a client. In other words, they had been great prospects and still were.

This was the beginning of my understanding of the sales process as it ap-plies to permission marketing. People act when they are ready to act. Some-times we can help to motivate them, but this is generally true only when they already want to be motivated. Otherwise, we have to wait for the time to be right for them.

It would be a shame if we weren't prepared to wait long enough, and, since it costs very little to keep an open file on prospects, sometimes for years, we have started to do just that.

How long can it take? Years, and sometimes even a decade or more. One of my favourite client firms was a case that I first opened in 1987. We worked on it then, and would follow up every year or so to continue to offer our services to the prospect. Eventually they had questions about their existing coverage and the agent wasn't around to answer the question. So we went through the plan documents with the client's CFO and found the answer. From then on they started to call my office with questions when they couldn't get a timely reply from their insurer. We even got involved from time to time with resolving problems for them.

The next time that the group was being reviewed we received a letter asking us to provide a summary of the services we offered.

Since the client understood that any agent can offer the same plans from most insurers, they were going to market looking for an agent to advise and help them. They intended to then allow the agent who they chose to do the work and get paid.

We submitted our letter, as did several other agents. We were interviewed several times.

We won the case by being able to point to the work that we had already done for them, and by asking them to contact some of our other clients to find out whether we do what we promise.

Since we promise to stand between the client and the insurer, that is all that we have to do. We answer questions, we offer our opinions and advice.

It isn't very complicated.

At the end of the day that is what we all do. We stand between our clients and the insurers. We offer advice, and our opinions, and our recommenda-tions. We answer questions.

We are all permission marketers already!

Permission Marketing is the way that we position ourselves as a resource in a market that is full of competitors who sell essentially the same products that we do. As a matter of fact, one of the things that I tell new prospects is that any agent can sell them the same products that I can. So our challenge has been:

1. to differentiate ourselves from our competitors. We have made a solid commitment to make the right people aware of who we are and what we can do for them;

2. to promote ourselves effectively. This requires good communication skills. It is speaking clearly and persuasively so that people understand what we can do for them. It is listening perceptively to understand the real need and to bring discernment to the process. It is writing with clarity and power so that it is personal and not just promotional;

3. It's an ongoing process, not an one time or occasional thing. It's doing the things necessary to gain visibility in the marketplace, whether that is community involvement, working with centres of influence, or or-ganizational involvement;

4. to position and promote ourselves as a resource. That means recog-nizing that character is far more important than expertise. King Solo-mon said, "A good name is better than riches." It' was important for me to realize that to be a resource I must be trusted.

Years ago I took a course that distinguished between conscious and uncon-scious competence. They were trying to tell us that some people were suc-cessful doing things intentionally, and other people were successful, but didn't know what they were doing to lead to their success.

I suggest that we all become consciously competent when it comes to per-mission marketing. If we do it every day, intentionally, it becomes a habit. Then we don't have to think about doing it, it will just come naturally.

And, as Martha Stewart says: That is a good thing!