By Bill Rusteberg
Selling health insurance is a tough business. It’s not a created sale, it’s a replacement sale which means relationships must be destroyed before any chance of a sale is possible. Destroying relationships takes time, effort and money. The sales cycle is long.
“I have a high value relationship for sale” says Joe the insurance broker to the insurance company. “Bidding starts at $100,000, high bid wins”
“I destroy relationships for a living” says Bill, the insurance agent across the street. “I’m going to destroy Joe’s relationship however long it takes. His margin is my opportunity. I’ll settle for $50,000, sharing the difference with the client once he signs the divorce decree. God Save The Queen!”
Since health insurance is a replacement sale and not a created sale, the only constant is relationships. That’s what makes the difference in winning or losing.
“Hi Honey, I’m Home!” says Bill. “I had a great day today, I destroyed two relationships! Let’s go out to dinner and celebrate!”
Meanwhile Joe plots his revenge………….
SEQUEL
Bill is really good at destroying relationships. He worked hard at it for years. With a wife and three kids to raise, the motivation to succeed was high. Self-employed with no regular paycheck to count on the motivation to win relationships turbocharged a work ethic his parents instilled in him since childhood. Failure was not an option.
As the years went by and success came his way others took notice. Bill had created a valuable asset producing hundreds of thousands of dollars in residual income every year and investors wanted in.
The first investor to call on Bill was a Texas TPA. “Bill, roll over your self-funded book of business to us and we’ll write you a check up front for $250,000 and continue to pay you based on a commission split going forward.”
Offer declined. “I’m not finished yet, The sky’s the limit” said Bill.
Bill continued to increase his relationship assets. Then years later a second offer was made.
A national brokerage called one day. “Bill, you should join us! We need your expertise. We are a brand name national brokerage. We can provide you all the support you need, office staff to back you up. legal staff, and a lot more. You can become part of a national team! We’ll write you a check up front for $1,000,000 and pay you 20% of all recurring commissions on your book plus all future new business commissions you may generate going forward. And best of all we’ll give you a title that will impress your high school graduating class at next year’s reunion!”
Bill declines the offer. “Why should I sell my book of relationships which is producing six figures a month? Accepting their offer would be a long range pay cut.” thought Bill.
Years pass…………….
Bill’s children are now grown and gone. The motivation to build his business to higher and greater levels is not what it used to be. Money is no longer a problem. Life is good. So he makes it known through all his contacts in the insurance world he is ready to sell his book of relationships.
And he does.
This is how Gallagher, Willis, Higgenbotham, USI, Marsh and other national brokerages expand their book. It’s similar to a franchise model. Relationships are worth something.
