“Don’t like” is an understatement. I loathe talking to someone who has a vested interest in me buying from them, based on a flawed compensation model. In almost every commissioned sales industry role, the salesperson wants to sell you something you don’t need. Used cars, investment advisors, and – you guessed it – life insurance.
Luckily, in my life, something happened that has hurt the sales industry.
Access to information
50 years ago, someone could ring your doorbell, show you a vacuum cleaner of the future, and you’d be sold. Vacuum cleaner sales folks were all over the place! It was a sought-after profession. Have any door to door salespeople come by lately? Have you invited them in? If they have come by recently, did you even wait till the end of their spiel before you said “not interested” and closed your door? Probably not.
Humans don’t like to be sold to.
I’m sure there’s someone out there saying “No way! I LOVE talking to salespeople!” The only people who would say such a thing are salespeople. We don’t like to be sold to anymore because we now have this thing called the Internet. Before you can sell me anything, I’m going to Google it, check it out on Amazon and even see if any of my friends have bought it before. We never simply talk to a salesperson and instantly purchase. That wouldn’t be a smart way to buy.
Social media is “social proof” on steroids.
We use word-of-mouth to find new products, and social proof when we’re not sure what to buy. The Internet has made social proof much more efficient. Made famous in Robert Ciadlini’s Influence the Psychology of Persuasion, social proof is looking to your peers or folks similar to you to see what they do. Instead of asking your neighbour where they got their jacket, as you would have done 20 years ago, you can find their Instagram handle and see where they bought their jacket – without them even knowing.
I wanted to sign up for an investment account, but I also didn’t want to speak with a human.
True story. When we had Tez, we received money to set up an education fund for her. I went to the Wealthsimple website on my phone and 20 minutes later, I had already set up my daughter’s RESP. No phone calls, no paperwork. I filled out some information, but they got the rest when I connected my bank account. It was so simple.
Wealthsimple made the easiest website possible for setting up investment accounts. In comparison, TD CanadaTrust and their investing arm gave me a bible of documentation to read the first time I wanted to invest anything; I never read any of it. They charged my account before I had even started investing. How backwards that was. I never wanted to brag about TD Waterhouse and the $29 per trade they charged. But, setting up an investment account while in bed on my phone is something I’ve told many people about.
What’s the future of sales?
Life insurance sucks. It’s a difficult product to wrap your head around. One of the only products you buy from which you’ll never reap the direct benefits. It’s also one of the most confusing products sold in the convoluted insurance industry. There’s a reason why life insurance attracts a lot of salespeople – it can be a lucrative industry. The higher the policy sold, the better the commission. You can see the flaw in the industry already. People shouldn’t be directly compensated by the amount of money they’ve convinced you to leave for your loved ones.
A Toronto-based Life Insurance company, founded by Actuarial Scientists who working in the Life Insurance industry, they recognized the flaw in how life insurance was sold. Commissioned salespeople would go through a questionnaire and find out some important information about your medical history, family history, job status, etc. Then, that person would recommend an amount of coverage you would need. As long as a human is the one quoting you, it’s difficult to trust them. Whether consciously or unconsciously, that person will give the best rate based on estimated commission. It’s not the salesperson’s fault; the system was designed this way.
When a financial decision is involved, trusting human judgement is a mistake.
The beautiful thing about the Internet is that it doesn’t have feelings. It’s not emotionally driven; technology can be programmed in a way to make smart, unbiased decisions, based on a certain data set. Trusting an algorithm or formula is becoming much more common place when it comes to analyzing vast amounts of data. Whether it’s the investment industry or the life insurance industry, I would much rather leave the recommendation up to an algorithm that has my best interests in mind.
“24% of people who fill out the application are not recommended to get life insurance.”
When we interviewed the CEO, Andrew, about PolicyMe and why they were different, he gave a simple explanation. They aren’t trying to sell to everyone, because they know that not everyone needs life insurance. In fact, on average, the algorithm only recommends life insurance to 76% of people who fill out the application. Almost a quarter of all people who apply on PolicyMe’s website are turned down.
You know you’re confident in your sales process when you’re turning away 1 in 4 people.
Once they do have a chance to sell you life insurance, PolicyMe won’t take advantage of you. You’ll get a recommendation from their algorithm as to how much you should leave for your loved ones. If you ever have any questions, you can call in, but the service is designed so you never have to talk to a salesperson on the phone. Brilliant.
From the book Friction, Roger Dooley tells the story of CarMax in the United States. The innovative way to buy used cars, sans salespeople. Dooley wanted to find out how CarMax was so successful. At first, he suspected CarMax was just selling cars for cheaper. What he found out was the opposite; on average, CarMax was more expensive than a used car lot. But how could this be?
People will pay a premium if they don’t have to deal with a salesperson.
The only way to explain the CarMax conundrum is that people are willing to pay for the convenience of not having to deal with a salesperson. The new reality of the evolution of sales is happening in every industry. People don’t have time to deal with salespeople.
When you try to make a sale, you seem desperate.
Pushy salespeople who are always trying to close a sale come across as desperate. How are sales done in your industry? Is there a hard pitch? Is it pushy, in-your-face kind of sales? Do you have minimum targets that you need to hit regularly? Do you “prospect” in the traditional sense?
Sales is evolving. I don’t think sales will ever be the same again.
How will you out-care in your industry to makes sales obsolete?
What if you didn’t have to sell? What a beautiful world that would be.