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Case Studies
High-End Distribution of Insurance Product
The PROBLEM
The Company is a multi-billion dollar insurance giant, one of the largest in the world. They created a long-term care insurance product that could be bundled with other employee health benefits and sold to consumers through their employers. Because long-term care insurance is complex, the insurance company (the “Company”) identified Health Maintenance Organizations (HMOs) as the best distributors for this product—they have a large employer client base and thousands of individual consumers. HMOs would also benefit from long-term care insurance because claim payments could fund the use of their health services, hospitals and care providers.
The sales cycle for this type of distribution arrangement is long. First, long-term care insurance must be integrated into the goals and objectives of the HMO, and second, the HMO must choose the Company as their insurance provider. The headquarters for many of the major HMOs are scattered across the United States, making field sales efforts without pre-qualified leads expensive and inefficient.
Because long-term care insurance is a relatively new product, the risks and rewards of offering this type of insurance are not widely known. However, with the aging baby boomer population and the costs of health care exploding, the need is great. Recent tax legislation has given a financial incentive to long-term care insurance, but the marketplace is in its infancy.
Despite these challenges, if an HMO signed up as a distributor, the annual revenue could easily be in the millions of dollars per year for the Company with an annuity stream stretching for decades. The decision to distribute the Company's products however would be made at the highest level—CEO, Vice President or Executive Team. Reaching such senior-level people in very large corporations would be exceedingly difficult. In addition, considering underwriting and liability issues, distribution of this product was not a simple matter. The Company needed not only the attention of very senior people, but also the time to make a detailed proposal.
The Company had an experienced field sales staff willing and able to meet with HMO executives, but the Company needed an alternative way to generate leads and educate the potential buyer community.
The SOLUTION
Determining Solutions
At the beginning of this effort, a study was performed to develop the information HMO leaders would need to make an informed distribution decision. Information was also gathered on how this group of executives made decisions and launched new products. It appeared that the best approach was to conduct education first and sales second. Because of the economic advantages to the HMO, the Company felt that educated HMO executives would sign on to become distributors if they had a clear view of the advantages of offering this product.
Education had two critical themes: underwriting, which is a mathematical model of the risks and rewards of an insurance product, and tax legislation, because tax considerations strongly influenced consumer-buying decisions.
Another study was conducted to determine the suspect universe, or how many HMO executives were there in the United States? Business Performance Group conducted a list search from associations, publications and compiled lists, then did a merge/purge of the available data to create a suspect file of approximately 5,700 senior executives with phone numbers and addresses gleaned from many sources.
The proposed education solution was a high-end executive seminar for HMO leaders. An elite group of distinguished underwriters, lawyers and product experts would be assembled for the educational seminar and materials would be created that would assist in future sales activities. A nominal fee would be charged for the seminar.
The strategy for selling the distribution model to HMO's on behalf of the Company was as follows:
- Executive Seminar (Education)
- Direct Mail/E-mail/Web Promotion/Publicity
- Telephone sales for registrations
- Telephone sales follow-up with Registrants (Sales)
- Appointment setting for field sales force
- Field Sales Call
- Presentation
- Proposal
- Close
Business Performance Group contacted various industry experts and combined their talents with the presenters provided by the Company and their contacts. A detailed seminar agenda was created that carefully reconciled the overlapping content of the six presenters and a day was scheduled to develop the materials in a cohesive and concise manner.
Arrangements were made with seminar facilities and travel plans were coordinated for the Company's staff.
Marketing Solutions
Business Performance Group created a direct mail brochure from the intellectual property of the presenters, including promotional seminar copy, a letter from an industry expert and biographies of the presenters. The eight-page brochure included a response device and was mailed via standard class mail, using a mailing indicia. (The brochure was pre-cleared by the post office prior to being mailed.)
A two-stage mailing plan was created and mailing periods were researched for the best drop time prior to the seminar. First, the brochure and a letter from an industry expert was mailed inside an envelope with outside teaser copy. Second, the brochure would be re-mailed as a self-mailer closer to the seminar date.
With the Company's approval, Business Performance Group handled the creative for the brochure and coordinated the printing and ink jetted name and address verification.
The brochure was translated into a PDF file for e-mailing purposes and a general e-mail template was created for the telesales function and general distribution. In addition, faxable response devices and information sheets were prepared.
Press releases were created and sent to major industry publications and a Web referral program and links were established with high-end industry newsletters. The seminar was listed in educational offerings and industry associations were contacted for support and publicity.
Support material was created for the seminar, including complete presentation materials and reference documents. Permission was obtained from the presenters to videotape the conference for the creation of future promotional materials.
Inbound Solutions
Marketing was expected to generate both inquiries and registrations. Inquiries were classified as either content inquiries or logistical inquiries. The logistical inquiries were about the mechanics of the seminar—where it was located, seminar times, how to get a hotel room, etc. The content inquiries involved questions on long-term care insurance and the Company's role.
It was determined to train a segment of the Company's customer service staff to take inbound calls. The logistical inquiries were answered by customer service and the content inquiries were referred to the Company's telephone selling organization. Business Performance Group created training materials for the inbound staff, including frequently asked questions (FAQ's) guides to help them quickly and efficiently look up information.
The company added an online registration option for the seminar to its Web site. To streamline the follow-up correspondance with registrants and inquirers, online response devices, email templates and confirmation letters were created.
Sales Solutions
A telephone sales approach was created for outbound representatives. The outbound telephone campaign was scheduled to begin after the first brochure mailed, but before the second mailing dropped. The telephone sales approach included:
Just before the seminar, the telephone sales representatives confirmed with their registrants and solved any last minute problems that occurred.
After the seminar, telephone representatives followed up with each attendee, first to confirm that the seminar met their expectations and second, to probe for interest in a follow-up sales presentation. The interested parties were scheduled for a field sales visit and presentation.
CONCLUSION
The timeline for the entire initiative was about six months from the initial creation of the idea until the delivery of the seminar.
Senior executives attended from major HMOs and several multi-million dollar contracts resulted in the six months following the seminar.
The most difficult business-to-business sale is a complex product where the decision maker is at the highest levels of the organization. The selling organization competes against the hundreds of other items occupying the time of a senior executive and the general business bias against trying anything radically new. Additionally, gatekeepers typically control the access and information flow to most senior executives. Reaching beyond the gatekeeper in a sales situation is an important skill that must be taught.
The coordination between marketing and sales is key. Marketing improves the results of telephone or field selling by introducing the concept before the call and by generating interest and response. All sales and marketing collateral, whether mail, e-mail, fax or Web must be integrated to provide a smooth, coherent message to the intended audience. Timing is critical. Most of the attendees in this case study needed to travel, and many had logistical headaches arranging the day out of the office just to get to the event.
Using education as the first goal and sales as the second goal worked for this client because industry experts could be deployed to explain the process without endorsing a particular product. The Company felt that its product would succeed in the marketplace if demand were created through knowledge, which turned out to be the case. As sponsors of the seminar, and as key presenters, the knowledge experts paved the way for the sales efforts that followed on the heels of the seminar.
The sales process: seminar marketing and seminar telephone sales, the seminar itself, telephone follow up, field sales presentation, proposal and close, contained multiple stages but produced sales efficiencies far higher than field sales alone. The front-end processes did not eliminate the need for field sales, but concentrated the effort on educated and interested prospects. The seminar experience positioned the Company's knowledgeable staff as experts, building trust and developing the relationship.
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