Annuity Leads

Sounds good.  But have you ever heard the saying “there’s no such thing as a free lunch?”  If the saying holds true, then either the free annuity leads aren’t worth much or there is a cost you don’t know about.  Let’s look at both possibilities.

If someone is willing to give you free leads, ask about the nature of the leads.  If the leads are free, does it make sense that the provider probably did not pay much for them?  For 5 cents per name, you can get from many mailing list companies lists of people that are age 55 or over.  Do the names on this list qualify as an “annuity lead?”  If you ask me, it’s just a name on a list and 1000 of those names cost $50.  They don’t have much value and in fact, they have “negative value” because you will waste 98% of your time calling this list to find a few people who might be interested.

Now, if you take the list and then send a mailer to these people offering a free safety analysis of their annuity or a copy of a booklet, “The Truth About Annuities,” you will have some people respond.  The people that respond are valid annuity leads because they have expressed interest.  Among the 1000 names on the list, the 20 or so people that respond have value. It costs money to get a decent annuity lead.  In this case, you have the $50 for the list, and the cost of 1000 mailers (about $700 including postage, printing and mailing service).  Then you have maybe $60 for the booklets you send out including postage, for a total investment of $810.  Divide by the 20 leads you got and your cost per lead is $40.50 ($810/20).  As you see, there is no way to generate a real annuity lead for free.

Perhaps the leads you are being offered are more than just a list.  Perhaps your investigation uncovers that these leads are people who responded to a mailer as the scenario above and you are being offered $40 leads for free.  The party offering you the leads has something to gain.  Either an insurance company will earn profit from the products you sell for them (and also pay you a commission) or an intermediary (e.g. field marketing organization) will earn a commission override.  There’s certainly nothing wrong with that as these organizations are willing to front your marketing costs in return for some business form you (or else the leads will stop coming your way).  Again, these annuity leads are not free.

So think for yourself and do some investigating about the nature of “free annuity leads” and understand the true cost.

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There is no trick to making a lot of money in annuity sales.  Like all sales, it boils down to quality and quantity of annuity leads.  Quantity means that the more people you talk to, the more sales you make. Quality means that the better the quality of prospect and the better the quality of your sales presentation, the higher your closing ratio.
 
In order to have a lot of annuity prospects, you have two choices.  You can work hard to get them with inefficient tactics like cold calling, networking, relying on referrals, etc. or you can motivate annuity prospects to contact you.
What is Annuity Lead Generation?

Any way you get annuity prospects to contact you is viable: direct mail, flyers in their mail box or on their car windshield, flyers left at senior centers, etc.  There are dozens of viable ways to put a message in front of an annuity prospect and have the prospect respond and as a result, have a constant large flow of annuity leads.  Imagine coming to your office each morning to find ten hot annuity leads in your email–annuity prospects that have contacted you and wait for your reply.
 
While annuity lead generation is nothing new, it is usually conducted poorly. Fortunately, in 2008, it is now easier and less expensive as you can have annuity leads generated by using the Internet.
How Does Lead Generation Work?

There are agencies that specialize in providing qualified annuity leads to annuity agents. An agency develops a website or affiliates with several websites on which they promote and advertise the benefits or dangers of annuities (it will make sense in a minute why advertising “dangers” works).  A consumer finds these informational web sites and the annuity prospect completes an online request form. This form is submitted to the agency. These annuity leads are then sent via email to you, the annuity professional, with full contact information.

Let’s address two issues: the quantity and quality of annuity leads generated.
 

The most powerful message for an Internet ad is not to offer an annuity quote.  Consumers know that this is just an invitation to be sold and they are averse to filling out quote forms.  You get a far higher response if you offer educational information.  Now let’s take this one step further.  Offer educational information, information that if the annuity prospect does not have, it will cost them a lot!  You get more more annuity leads when you offer to alleviate pain or solve a problem than if you offer an opportunity.

For example, Wwhich headline do you think generates more annuity leads:

1. “Cut Your Taxes with a Tax Deferred Annuity”  OR
2. “Avoid the Two Assets that get Double Taxed–and Most Investors Don’t Even Know It.”
(Headline number 2 refers to annuities and IRAs that are potentially subject to income AND estate tax at death).

The second ad which presents a problem and offers to educate the consumer how to solve it will get 300% as many annuity leads as the first headline.

Now that we have insight into high volume of annuity leads, what about the quality of annuity leads?

Using the Internet solves this problem.  Annuity buyers are mature investors, not youngsters.  Look at the statistics of mature investors on the Internet:

Mature Internet users are the perfect affluent and educated group of annuity prospects.

By having the right ad which appeals to solving a problem and using the right medium, the Internet, you can have a fantastic annuity lead generation system that produces high quantity and high quality of annuity leads.

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If you want to attract affluent and intelligent annuity buyers, here’s how to do it.

Get Interviewed in the Newspaper

Many advisors forget how newspapers work.  The people working for newspapers are journalists.  They don’t have a financial background.  So where do they get the information to write articles in the business section?  They interview people like you!  So why shouldn’t it be you?  You have opinions and ideas just like the next agent.  There’s s much misinformation about annuities, journalists really need people who can explain the straight story and the exposure will lead to annuity sales for you.

But how do you get them to interview you?  You get attention from the press by sending them a continuous stream of your ideas in the form of articles or press releases.  “I’m not a writer,” you say.  You don’t even have to write a single word.  It is possible to have others to do the writing for you and many writers are set up to provide this service to advisors (place free ads at www.guru.com, www.elance.com, www.freelancewriting.com).  You provide the idea and they do the writing.

Once you have the article or press release written, send it to the business editor.  Sometimes you get a response immediately but don’t panic if you don’t.  Most reporters will file your annuity article for future reference.  Keep sending new ideas at regular intervals and eventually, the editor will realize that you may have some useful ideas and will call you for an interview or request an article from you.

One mention in the newspaper won’t make you rich.  In fact, hardly anyone will see your name mentioned on page 16 that particular afternoon.  The true power of getting published is that when you send prospects and clients copies, they quickly deduce that you must be the local annuity expert because your name is in print. Prospects will wonder why their current advisor has never been mentioned in the paper and you’re immediately perceived as the superior annuity agent.

Send copies to senior groups and associations as this may help to get you invited to be a speaker.  Go ahead and send your article to a rented list of affluent seniors in your community (every library has a copy of SRDS list source for any list you ever need).  You will get calls as many seniors seek someone they can trust, and fewer people in the financial services industry seem worthy of their trust these days.

Write a Book (or annuity booklet)

An even better way to establish yourself as the trusted annuity expert is to write a book.  In America, authors are the ultimate experts.   You can accomplish this without writing a single word.  Just as you can hire someone to express your ideas in a written article, you can also hire a writer to put them into book form.  In fact, as little as 8 hours of dictating your ideas into an audio recorder can supply a financial writer with enough content to write your book.  That’s basically how all busy people write books.  Do you think Donald Trump or Hillary Rodham took months off to write their books themselves?

Send your annuity book to the CPAs and estate attorneys in town and to the press.   Then follow up with your monthly annuity newsletter.  Before long, you will get unsolicited referrals from these professionals and calls form the press for interviews.

Get your annuity book into Barnes and Noble and then call each Barnes and Noble location area and offer to do a talk in the local store.  For each date you have a talk scheduled, rent a list of wealthy seniors in the nearby zip codes and invite them (enclose an order form to purchase your book in case they cannot attend).  You now have an interested audience of great prospects who get the chance to check you out in a non-threatening environment.

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Best Time for Annuity Seminars

Retirees generally rise early in the morning and schedule golf, tennis, shopping, doctor appointments, dentist appointments, and meetings with the accountant or attorney on weekday mornings.  Therefore, never hold a seminar on a weekday morning because you would be competing with a lot of other activities in your prospect’s schedule.  Schedule your annuity seminar either for Saturday mornings (when retirees put their weekday activities on hold) or weekday afternoons at 2:30 p.m.  By a weekday afternoon, retirees have completed their morning schedule and your only competition is Oprah.

Try and avoid scheduling evening seminars because some retirees tell me that they are reluctant to drive at night as they notice their night vision is not as good.  Additionally, single females have a safety concern, making them reluctant to venture out at night.  If you were having seminars for younger people, all of these guidelines would be different as you would seek to fit their schedule and lifestyle.

Choose the right message

Retirees are concerned with security and are afraid of making irreversible financial mistakes.  This means that they are far less concerned with performance statistics, and favor capital preservation.  (Unlike a younger attendee that wants performance as they look to future financial security).

Thus your annuity seminar title should address their concerns and their fears rather than a product.   The seminar should star you – the problem solver and trustworthy advisor, not a money manager or wholesaler.  Seniors buy trust in a person.  If they trust you, they’ll hand over the money and tell you, “If you think this is good, then let’s do it.”  While younger investors spend more time analyzing details of products and doing comparison shopping, the retired investor is far more attuned to analyzing you.

The topics you choose should focus on you as a problem solver for emotionally compelling problems relevant to seniors.   Some examples of emotionally compelling topics for the senior market include:
a. Mistakes Retirees Make With Their Finances and How to Avoid Them
b. Six Ways Retirees Can Cut Income Taxes and Save More Money

Never have the word “annuity” on your seminar invitation or it will look like a sales pitch for annuities and people will not attend.  Additionally, don’t make your seminar a sales pitch about annuities but rather the benefits of annuities.

Doing it right

Keep in mind that eyesight fails with age.  For this reason, you may wish to avoid really large rooms for your annuity seminar and choose a setup that gives all clear view of you and your screen if you use slides.   Here are a few additional rules for your presentation:

a. Make slides high contrast—dark print on a light background or vice versa.
b. Keep words on each slide to a minimum.  Avoid small text (24 point minimum in PowerPoint)
c. Drop all jargon.  Use simple, easy to understand terminology.  For example, never use the phrase “fixed annuity,” but ask “do you have the type of annuity where the principal is guaranteed but the interest rate has been falling over the last 10 years?”
d. Never speak for more than 75 minutes—people get bored
e. Have a system for closing appointments right at the annuity seminar—do not wait until the next day
Follow Up

Confirm your appointments at 8 am the next business morning.  Retirees rise early and leave the house.  It’s best if you confirm in person.  Do not delegate this to an assistant or you will lose appointments.  This is an important additional contact in building the bridge between you and your soon-to-be new client.

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Annuity seminars are the most effective ways to tap into the lucrative retiree market.  Many other marketing methods that work well with younger investors, such as cold-calling are considerably less effective because mature investors are skeptical.  They want to get to know you first before meeting with your one-on-one trusting you with funds.  And what better way to “check you out” than by sitting in your annuity seminar and listening to you.

The reason that retirees are perfect for annuity seminar prospecting is that they meet the three criteria for the perfect seminar attendee:

1. They have money in their control.  Unlike younger people, their assets are not locked up in an employer 401k plan or in stock options.
2. They have the time to attend.  Unlike successful working people and business owners, they have the luxury of determining their own schedule and can attend your annuity seminar
3. They are the most motivated audience.  Living with the constant insecurity of no paycheck, retirees are motivated to alleviate the financial fear that haunts them.  They have interest in learning everything possible to avoid making an irreversible financial mistake.

In order to achieve good results from annuity seminars with retirees, understand how they think and make buying decisions, and design your annuity seminar to address their special needs.   The formula for successful annuity seminars includes these considerations:

Location, location, location

Just like in real estate, your choice of location can make or break the success of your annuity seminar.  Keep in mind that most retirees living in a metropolitan area will not drive more than 20 minutes from home.  In addition, you should select a seminar location that is well known, convenient and in neutral territory.  Some annuity agents attempt to hold seminars in their office buildings.  Bad idea.  This is not neutral territory and some prospective attendees will not come for fear of being trapped in a high-pressure sales situation.  Think about buying a car.  Are you comfortable when you’re on the salesman’s turf?

Therefore, never use your office as a seminar location.  Rather, use a local restaurant that has existed for 20+ years — a place which everyone in town knows and likes.  It’s familiar, neutral and well located.  .  Many restaurants are happy to rent an extra room or even open for your annuity seminar at a time when they are normally closed.

You do not need to feed your audience just because you use a restaurant for your location. There is nothing wrong with feeding attendees, but it increases your cost and is unnecessary.  In fact, in my experience, serving food lowers the percentage of serious buyers you will have in the audience.  When you feed attendees, half of your audience will be “eaters”—people that came for the food.  Expect to get appointments with 30% of attendees. When you do not use a meal as bait, those investors who are serious about hearing what you have to say will come with or without a meal. You will get appointments with 50% to 80% of these serious attendees. (The exception to this rule is Florida, where the meal is necessary to attract attendance).

What about hotels?  Some prospects perceive hotels as a place for transients and may associate you with the salesman who is here today, gone tomorrow.  Additionally, some hotels place their conference rooms in a location requiring your prospect to negotiate a maze of hallways.  Do you want your prospect to enter your annuity seminar frustrated?  Only use hotels when a restaurant is absolutely not available.

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If you’ve developed the opinion that annuity seminars don’t work for marketing annuities, you’re wrong.

Annuity seminars don’t work when they are done incorrectly. But make a few changes, and you can have 50 people, every time, attend to hear your presentation.

The first issue is matching your message to the market. It’s a simple idea that many annuity agents skip, assuming they know their audience. For example, let’s assume you want to market your annuity seminar to people age 60 and over. To develop a winning seminar invitation, you need to know how these 60+ investors think. You cannot assume that your 60+ market thinks like you do. If you’re 45 years old, you probably want to know about opportunities to make money grow. But people over 60 (in most cases) are not focused to make more money. They care about preserving their capital. Their biggest concern is fear of losing principal. So is it any wonder that your opportunity-oriented seminar titled, “How to Earn More with Annuities,” doesn’t get much of a response?

You could triple your attendance with the right title, such as “Six Ways To Cut Taxes and Protect Your Nest Egg.” This title appeals directly to their fear (i.e. not having enough) and will pull in the attendance from a 60+ audience. Whichever target market you choose, you really need to know their most significant emotional concern and with pre-retirees and retirees the concerns are about preservation and having enough. If you can title a seminar addressing the major concern(s) of your target audience, you have half of the battle won. If you’re not sure, then do some interviews and find out what’s really on the mind of your target prospects.

And please, don’t have the word “annuity” or “annuities” on your invitation.  Annuity prospectsdon’t want a sales pitch. If your annuity seminar looks like a sales pitch for annuities, no qualified annuity prospect will attend. Prospects want benefits.  So make sure your title conveys the benefits they will learn about: preserving capital, keeping money safe, having enough for a life time, saving taxes and having more to spend, reduced financial worry and peace of mind.

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Let’s do some math on annuity sales.  As far as I can tell, most equity indexed annuities pay the agent 8% commission.  So to earn $100,000 in a year, you need to sell $1.25 million of annuities.  Since I know agents that have sold that in ONE CONTRACT, it’s unacceptable that over an entire year, you don’t sell several millions of annuities. Simply unacceptable. 

$1.25 million is $100,000 per month.  There are 20 workdays in a month.  You can easily sell one contract for $100,000.  It might even take you a whole day if you need to drive to meet your prospect, make a presentation, take them to lunch and socialize. So what the heck are you doing the other 19 days of the month?

I’ll tell you what’s crazy.  I see annuity agents write a $100,000 policy and then they take the next day off as a reward.  NO!!!  Keep up the momentum and kick into high gear.  It’s by chaining winning days together—several days of $100,000 sales that you have a $500,000 month. If you want to take a day off, take it AFTER you hit $500,000 for the month. 

Here are the reasons that annuity agents fail to earn at least $100,000 a year and how to correct these errors:

1. You’re lazy and you don’t prospect.  Do you expect the phone to ring because you are a nice person? If you don’t have at least 3 prospecting campaigns going, get out of the business and get a government job.  Just quit now.  Or, select any three of these prospecting methods and get going:
Mailers
Seminars
ACTIVE referral system (don’t wait for referrals)
Subscribe to an annuity lead program
Cross referrals with a long term care agent or P&C agent
Email program

If you are depressed then do to the shrink and get some anti-depressants.  There are NO excuses except the ones that come out of your mouth.

2.  You don’t know how to sell.  Overconfident agents tell me all the time, “I’ve been selling insurance for 30 years, I can sell.”  It doesn’t matter how long you’ve been doing something, most people cannot sell. They’ve never had a minute of training and they don’t even know what they don’t know.  Immediately get trained.  Enroll yourself in one of these classes:  Dale Carnegie, Sandler Institute, SPIN Selling.

3. You ignore a basic rule of the universe—ACTIVITY GENERATES RESULTS. Stop sitting on our butt.  Do something, anything!  The more active you are working in and on your business, the more results you get. 

4. Hang out with successful annuity agents and copy what they do.  Why try and figure out how to be successful when you can just copy what successful people do?

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What if you could isolate the people most likely to buy an annuity?

You can.  Research by Gallup done for the Committee of Annuity Insurers isolates the best annuity leads by detailing which prospects are most likely to buy annuities.

Here are three findings of the research which can help you focus on the right annuity prospects:

Retention of First Annuity.
Almost all non-qualified annuity owners (88%) still own the first annuity they purchased.  This means that many people have old annuities with old features and possibly under market interest rates.  There is a huge pool of existing annuity owners for whom you may be able to do much better. These annuity leads already know how annuities work and are locked in to their current annuity or doing an exchange because they won’t want to pay the tax. The way you find existing annuity owners is by running an ad that attracts them.  We run an ad for an annuity booklet called “Annuity Owner Mistakes.”  Obviously, the person who would order such a booklet is an annuity owner!  Marketing in this way produces annuity leads that are the perfect target market.  (Before recommending an exchange, please be sure that the annuity owner will be better off and that you make all disclosures for an annuity exchange).
The average age of non-qualified annuity owners is 66.
Non-qualified annuity owners are more likely to be female than male (56% vs. 44%). So if you were buying a list, your best list that would encompass the best annuity leads would be a list of females between age 60 and 70. Gallup has already done the research so it’s easy to target the market that is most likely to own annuities based on their work.

Non-qualified annuity owners have moderate incomes.
Two-thirds (66%) have annual household incomes below $75,000. Only 18% have annual household incomes of $100,000 or more.  This tells us that the best annuity leads are not rich people and that you don’t want to build your business based on selling $1 million dollar annuities.  You will do better with an annuity marketing strategy to sell a lot of annuities ranging in value from $50,000 to $200,000 as your buyers are middle income people.

While too many annuity agents don’t focus their marketing efforts, you know now how to target the annuity prospects that make the best annuity leads.

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