9
Trustworthy Selling for Commissioned Sales Representatives
Independent Financial Services Agency
Delores Freitag and Nancy Murphy
This case was prepared to serve as a basis for discussion rather than an illustration of either effective or ineffective administrative and management practices. Names, dates, places, and data may have been disguised at the request of the author or organization.
Abstract
A group of 23 sales reps that attended the Trustworthy Selling training program in the fall of 2011 registered a 27 percent increase in policies, a 31 percent increase in new clients, and an 18 percent increase in premiums written in the three months after training compared with the three months prior to training. During the same time period, a group of 113 sales reps from the company that did not attend the training program registered a 3 percent increase in policies, a 1 percent increase in new clients, and a 2 percent increase in premiums written. This company realized a 165 percent return on its investment in training.
PROGRAM BACKGROUND
The company represented in this case study is an independent financial services agency with a sales force of 150 commissioned sales representatives affiliated with a large national life insurance company. A small group of sales reps from the company attended the Trustworthy Selling training program, which is designed to provide financial services organizations a new approach to increasing productivity and retention through 10 facilitator-led modules that form a holistic development process. The objective of the program is to equip producers with skills needed to break down the barriers that consumers have built as a result of preoccupation and lack of trust. The program was piloted on a small group within the agency with the expectation of conducting a thorough productivity and ROI analysis; depending on performance results and the outcome of the ROI analysis, the company would enroll additional sales reps in the training program.
EVALUATION METHODOLOGY
The Trustworthy Selling training program was evaluated at five different levels using the ROI Methodology. The Level 1 evaluation was conducted by the program facilitator at the conclusion of the four-day program. The program facilitator gave the attendees paper questionnaires on which they rated their reaction to 15 elements of the program using a 10-point scale, where “10” was the highest rating. Average ratings were calculated for all 15 elements. In addition, the 15 elements were organized into three general topics; average ratings were derived for facilitation, program content and materials, and the program overall, including investment of time.
The Level 2 evaluation was conducted by the program facilitator through the Capstone and Action Planner module at the conclusion of the program. The overall objective for the attendees was to summarize, evaluate, and integrate the principles and practices learned during the program. As course review, the facilitator led a brief discussion, where attendees were asked to identify key points from the foundational, tactical, and seller psychology modules. The facilitator listened for 12 specific points to be mentioned as means of evaluating whether the material had been learned.
Next, attendees took part in a fast-paced group review quiz consisting of 20 multiple-choice questions led by the facilitator. No official scores or grades were recorded.
Finally, working in triads, participants role-played two case studies, with each member playing the role of financial professional, prospect or client, or observer. In each case, the “observer” evaluated the “financial professional” on how effectively he or she interacted with the “prospect or client.” Skills and concepts being observed and evaluated included best practices, skillful language, effective questions, and use of processes and tactics presented in the program. The facilitator as well as the “observer” and the “prospect or client” provided feedback to the “financial professional.”
As a final step, participants identified three skills or concepts within each of the six tactical modules that they would commit to incorporating regularly into their work practices over the next 30 days, and to which they would hold themselves accountable to their named accountability partner (an in-house trainer, coach, other sales rep within the company, or someone else outside the company, such as a spouse or professional mentor).
The Level 3 evaluation was conducted by the program developers one month after the conclusion of the program. Program developers emailed an online survey to the attendees asking them to indicate the extent to which they use 50 techniques presented in the program. Their self-reported responses were on a 4-point scale ranging from:
- Didn’t used to do this and still don’t (response value = 0).
- Used to do this and still do (response value = 1).
- Didn’t used to do this but do now as a result of training (response value = 2).
- Used to do this but do now even more as a result of training (response value = 3).
Responses “didn’t used to do this and still don’t” and “used to do this and still do” were combined to create a “no change in behavior” response category. Similarly, responses “didn’t used to do this but do now as a result of training” and “used to do this but do now even more as a result of training” were combined to create a “change in behavior” response category. For each technique an average score was calculated, as well as the percentage of respondents indicating that they had changed their behavior.
The Level 4 evaluation was conducted by the program developers three months after the conclusion of the program. The participating company was accustomed to systematically tracking and monitoring the monthly production for all of its financial sales representatives; company-generated monthly production reports for each of the three months prior to training and each of the three months post-training were submitted for analysis. Production measures included number of policies, number of new clients, and premium written. Production information was provided not only for the 23 representatives who attended training but also for 113 who did not attend training but who would otherwise have experienced similar sales opportunities, market conditions, management styles, sales support, and office morale. As such, the non-attendees served as a control group for the analysis to isolate the effects of the training. Only those sales reps for which a complete set of production data was provided for both the pre- and post-time periods were included in the analysis.
The Level 5 evaluation was conducted by the program developers along with the Level 4 evaluation. Using the production measure of premium converted to profit, the ROI was derived by calculating the difference between the total profit of the premium actually written by the attendees in the three months post training and what they might have written assuming they had not attended training, divided by the total cost of the training program. The “assumed” post-training production for the attendees was derived by applying the percent change in premium for the non-attendees to the pre-training premium for the attendees. The total cost of the program included fees paid to the facilitator plus the costs of coordinating the program, program materials, and meals and refreshments. Figure 9-1 shows the ROI analysis plan for the program.
FIGURE 9-1. ROI Analysis Plan
A formal written report that included a detailed comparison between the attendees and the non-attendees and the results of the ROI analysis was shared with key personnel at the company as well as with program developers and facilitators.
EVALUATION RESULTS
Reaction
Attendees were asked to complete an evaluation of the training program at the conclusion of the program. Sixteen of the 23 attendees completed an evaluation (70 percent response rate). Using a 10-point scale, with “10” being the highest rating, attendees rated their reaction to 15 elements of the program. Overall, the attendees were highly satisfied with the facilitation, the program content and materials, and the program in general. Results of the Level 1 evaluation are shown in Table 9-1.
Learning
The Level 2 evaluation was conducted by the program facilitator at the conclusion of the program. The evaluation began with a brief discussion and review quiz, and then concentrated on the attendees demonstrating their understanding of the essential techniques and best practices presented in the program through role-play in two master case studies. No grades or scores were calculated, but participants received both verbal and written feedback from their peers and the program facilitator.
TABLE 9-1. Level 1 Evaluation Summary
| 1. How would you evaluate the facilitator’s ability to reinforce the subject matter presented in the videos? | 9.4 |
| 2. How would you rate the facilitator’s style of delivery? | 9.5 |
| 3. How much participation was encouraged by the facilitator? | 9.4 |
| 4. How would you evaluate the facilitator’s treatment of differing needs and viewpoints? | 9.1 |
| 5. How well did the facilitator keep the program on track? | 9.5 |
| FACILITATION | 9.4 |
| 6. How clearly were the concepts, principles, and techniques explained in the videos? | 9.5 |
| 7. How well did the program modules and ideas move from one to the next? | 9.1 |
| 8. How useful were the participant materials and tools/resources contained in the binder? | 9.4 |
| 9. How valuable did you find the website to be as part of your learning experience? | 7.6 |
| 10. How often could you relate the situations in the case studies and/or role-plays to your own practice? | 9.6 |
| 11. How useful did you find the exercises and activities? | 9.4 |
| PROGRAM CONTENT AND MATERIALS | 9.1 |
| 12. To what degree did the program challenge your thinking and present you with new ideas? | 8.6 |
| 13. How much do you think you will be able to apply what you learned in this program to your job situation? | 9.1 |
| 14. How confident do you feel about putting the skills and techniques into practice as a result of the program? | 8.6 |
| 15. As an investment of your time, how would you rate this program? | 8.8 |
| PROGRAM OVERALL | 8.8 |
Application
The Level 3 evaluation was conducted by program developers one month after the completion of the program. Program developers asked attendees to complete an online survey designed to gauge their application of the strategies, language, and techniques presented in the program as well as the progress they had made on their action commitment. Thirteen of the 23 attendees completed the online survey (57 percent response rate). Sixty percent or more of the respondents reported making changes in their behavior in 22 of the 50 significant on-the-job activities presented in the program. Results of the Level 3 evaluation are shown in Table 9-2.
TABLE 9.2 Level 3 Evaluation Summary
| How Consumers Think and Feel | Average Rating | Change in Behavior |
| 1. I recognize when my prospects and clients are motivated by the avoidance of pain or the desire to gain something. | 1.50 | 46% |
| 2. I connect our products and services to the six emotional drivers that motivate all human behavior (e.g. the need for certainty, the need for variety, etc.). | 1.64 | 69% |
| 3. I actively incorporate relevant LIMRA statistics into my conversations with prospects and clients. | 1.86 | 77% |
| 4. I recognize and identify the preferred communication style (such as dynamic, interpersonal, or analytic) of my prospects and clients. | 1.36 | 54% |
| 5. I am aware of my selling style and proactively adapt my style to that which is preferred by my prospects and clients. | 1.50 | 54% |
| Average | 1.57 | 60% |
| Business Development Techniques | ||
| 1. I ask for favorable introductions each and every time I interact with prospects and clients. | 1.86 | 54% |
| 2. I use an Ideal Client Profile during my prospecting process in order to help those from whom I am asking for favorable introductions to better understand my target clients. | 1.00 | 31% |
| 3. I have identified and nest within at least one organization or industry. | 1.50 | 54% |
| 4. I have fully internalized and consistently use the new business development language I learned in Trustworthy Selling. | 1.93 | 92% |
| 5. I regularly attend networking events and incorporate the best practices I learn in order to build my business. | 0.43 | 15% |
| 6. I have fully internalized the business development objection-handling language I learned in Trustworthy Selling. | 1.21 | 38% |
| 7. I develop and regularly use my LinkedIn profile to identify potential prospects to feed when asking for favorable introductions. | 1.36 | 31% |
| Average | 1.33 | 46% |
| Engagement Techniques | ||
| 1. I increase my competence and credibility by reading books, articles, etc. on topics relevant to my business. | 1.57 | 54% |
| 2. I use well-designed telephone scripts to increase my effectiveness in reducing resistance and setting appointments. | 1.21 | 23% |
| 3. When on the telephone, I actively overcome objections for every call and I track my effectiveness. | 1.50 | 38% |
| 4. I eliminate prospects' preoccupation and gain their interest when first speaking with them. | 1.71 | 46% |
| 5. I engage prospects upon initial contact by using a fully-developed Defining Identity Statement. | 1.21 | 46% |
| 6. I utilize power phrases in conversations with prospects. | 2.00 | 77% |
| Average | 1.54 | 48% |
| Collaborate Discovery Techniques | ||
| 1. I assess my Trustworthy Listening skills regularly, and work on improving by adding one to two best practices each week. | 1.07 | 46% |
| 2. I regularly paraphrase throughout the discovery process including a comprehensive paraphrase at the conclusion of the process. | 2.14 | 85% |
| 3. I develop RPM questions for a certain area of planning (e.g. life insurance, long-term care, retirement planning) and incorporate them into my collaborative discovery process. | 1.64 | 62% |
| 4. I keep a weekly “Courageous Conversations” journal to capture each time I step out of my comfort zone. | 0.43 | 15% |
| 5. I assess my Collaborative Discovery skills regularly, and work on improving by adding one to two best practices each week. (n=12) | 0.85 | 25% |
| 6. I strive to obtain an advance at the conclusion of each collaborative discovery meeting as a way to test for commitment from the prospect (e.g. budget commitment, scheduling the closing appointment, obtaining referrals). | 2.00 | 62% |
| 7. I regularly send a follow-up discovery letter after each meeting to recap items discussed and to ensure alignment between myself and the prospect. | 1.71 | 54% |
| Average | 1.41 | 51% |
| Gain Commitment Techniques | ||
| 1. I assess my ability to Gain Commitment regularly, and work on improving by adding one to two best practices each week. (n=12) | 1.25 | 42% |
| a. I use personal stories to overcome irrational optimism. | 2.38 | 85% |
| b. I use heuristics or rules of thumb. | 2.54 | 85% |
| c. I avoid ambiguity, using simple language and checking for understanding. | 2.54 | 85% |
| d. I help prospects visualize the personalized benefits of owning products I present. | 2.07 | 69% |
| e. I demonstrate fairness by involving my prospects in the decision making process. | 2.29 | 77% |
| f. I help prospects recognize the present value of my financial solutions. | 2.14 | 69% |
| g. I assist prospects with budgeting for my solutions by appealing to their mental accounts. | 2.14 | 69% |
| 3. I regularly complete a Case Preparation worksheet (i.e. Case Preparation Questions) while preparing for my closing presentations. | 1.14 | 38% |
| 4. I use an agenda for all my closing presentations and meetings. | 1.14 | 31% |
| 5. I share at least one personal story with potential clients during my presentations. | 2.07 | 62% |
| 6. I regularly use features/advantages/benefits language for products I am presenting each week. | 2.00 | 69% |
| 7. I have fully internalized the language that creates a sense of urgency in my prospects. | 1.36 | 38% |
| Average | 1.93 | 62% |
| Deepen Client Relationships Techniques | ||
| 1. I segment my clients based on the criteria I learned in Trustworthy Selling. | 1.64 | 69% |
| 2. I work collaboratively with my staff/associates in order to provide quality service to each segment of my client base. | 1.57 | 54% |
| 3. I develop a marketing plan that outlines how many times I will “touch” each client based on their segment. | 1.36 | 54% |
| 4. I analyze the amount of effort I am expending on each client segment. | 1.36 | 54% |
| 5. I develop an activity plan to ensure I am spending the majority of my time with my top client segments. | 0.79 | 31% |
| 6. I analyze my client segments to identify cross-selling opportunities based on each client's life stage. | 1.43 | 46% |
| 7. I develop a client service model that identifies the frequency, the type of service (face-to-face, telephone, email) and who is responsible (staff, associate, myself) for each task. | 0.79 | 31% |
| Average | 1.28 | 48% |
| Achieve Peak Performance Techniques | ||
| 1. I regularly work on and revisit my vision for the future, describing where I want my business to be in the next three to five years. | 1.93 | 69% |
| 2. I evaluate any self-limiting beliefs I currently have that are preventing me from soaring in this business. | 2.21 | 92% |
| 3. I use a positive affirmation to support my vision and goals. (n=12) | 2.08 | 92% |
| 4. I spend time thinking about what goals to set and how to hold myself accountable to them. | 2.29 | 77% |
| 5. I evaluate how I spend my time, looking for ways to spend more time in “the green.” | 2.43 | 92% |
| Average | 2.20 | 81% |
Impact
The Level 4 evaluation was conducted by the program developers three months after the completion of the program. The program developers analyzed the participating company’s productivity reports for each of the three months prior to training and for each of the three months after training. These monthly reports included three measures of production for all sales reps in the agency; for those that attended training as well as for those that did not attend training. The evaluation included calculating average monthly performance measures for the pre- and post-training time periods for the group of attendees and for the group of non-attendees (control group), deriving the percentage of change in the three performance measures for each group, and comparing the productivity between the two groups.
Level 4 evaluation results show that attendees registered a 27 percent increase in policies, a 31 percent increase in new clients, and an 18 percent increase in premiums written in the three months after training compared with the three months prior to training. During the same time period, non-attendees from the same agency registered a 3 percent increase in policies, a 1 percent increase in new clients, and a 2 percent increase in premiums written. It is reasonable to conclude that the improvement in production for the attendees is a result of their attending the training program. Results of the Level 4 evaluation are shown in Table 9-3.
TABLE 9-3. Level 4 Evaluation Summary
| Policies | ||||
| n | Pre-Training Monthly Average | Post-Training Monthly Average | % Change | |
| Attendees | 23 | 7.65 | 9.72 | 27% |
| Non-attendees | 113 | 4.44 | 4.58 | 3% |
| New Clients | ||||
| n | Pre-Training Monthly Average | Post-Training Monthly Average | % Change | |
| Attendees | 23 | 3.43 | 4.50 | 31% |
| Non-attendees | 113 | 2.03 | 2.05 | 1% |
| Premium | ||||
| n | Pre-Training Monthly Average | Post-Training Monthly Average | % Change | |
| Attendees | 23 | $9,193 | $10,877 | 18% |
| Non-attendees | 113 | $11,773 | $11,969 | 2% |
Intangible Benefits
In a paper-based survey administered at the conclusion of the program, intangible benefits such as increased productivity, increased levels of employee confidence, existing program enhancement, and provision of new ideas were reported by participants.
ROI
A Level 5 (ROI) evaluation was conducted by the program developers three months after the conclusion of the program to complete the assessment of the value of the training program. The data are annualized to show first year monetary values. Also, a 25 percent profit margin (net premium revenue) was used to arrive at the earnings generated by this program. The company realized a 165 percent return on its investment in training. Table 9-4 shows the steps taken to calculate the ROI.
TABLE 9-4. ROI Calculation
| Pre-Training | ||||
| Average Monthly Premium | Number of Months | Number of Sales Reps | Total Premium | |
| Attendees | $9,193 | 3 | 23 | $634,317 |
| Non-attendees | $11,773 | 3 | 113 | $3,991,047 |
| Post-Training | ||||
| Average Monthly Premium | Number of Months | Number of Sales Reps | Total Premium | |
| Attendees | $10,877 | 3 | 23 | $750,513 |
| Non-attendees | $11,969 | 3 | 113 | $4,057,491 |
| % Change in Total Premium | ||||
| Attendees | ($750,513 – $634,317)/$634,317 | 18% | ||
| Non-attendees | ($4,057,491 – $3,991,047)/$3,991,047 | 2% | ||
| Estimated Post-Training Total Premium (assuming no training) | ||||
| Attendees | $634,317 x 1.02 | $647,003 | ||
| Program Benefits Attributed to Training for 3 Months | ||||
| Attendees | $750,513 – $647,003 | $103,510 | ||
| Annualized Monetary Benefits | ||||
| Attendees | $103,510 x 4 Quarters | $414,040 | ||
| Converting Data to Money for ROI Calculation | ||||
| Attendees | $414,040 x 25% Profit Margin | $103,510 | ||
| Cost of Program | ||||
| Facilitator fees | $2,500 per day (4 days) | $10,000 | ||
| Program materials | $1,195* per participant (23 participants) | $27,485 | ||
| Meals and refreshments | $12 per day (4 days, 23 participants + 1 facilitator) | $1,152 | ||
| Facilities | N/A (in house) | |||
| Salaries and benefits | N/A (commissioned sales reps) | |||
| Cost of coordination | $100 per day (4 days) | $400 | ||
| Evaluation | N/A | |||
| Total cost | $39,037 | |||
| ROI | ($103,510 – $39,037)/$39,037 | 165% | ||
*Program costs vary by class size. The highest per participant fee was used in the calculation.
COMMUNICATION STRATEGY
Formal written results from the Level 1, Level 3, Level 4, and ROI evaluations were shared in a face-to-face meeting with key members of management within the participating company at both the agency level and the enterprise level. The “stellar” results of this pilot group were used by the agency to market the training to additional experienced agents for a second program in 2012. The enterprise is using the data to market the training to additional agencies as part of their growth strategy addressing sales effectiveness in 2012 and 2013. The reaction to the course has been positive, increasing confidence and interest among experienced sales representatives to attend “training” and encouraging the company to move forward with its investment in quality training. The word on the street is, “When is the next program?”
Results were also shared with the program developers and facilitators whose reaction was a combination of renewed appreciation for the value of the program and commitment to continual improvement to the curriculum and its delivery.
LESSONS LEARNED
The Level 3 evaluation was valuable in two ways. Not only did it provide an effective means of measuring the extent to which the attendees were applying the strategies and techniques presented in the program, it also provided a critical snapshot of elements of the curriculum that might warrant more attention during the training. To maximize the benefits of this evaluation we would want to find ways to achieve a higher response rate, perhaps even 100 percent!
RESOURCES
Phillips, J.J. (2003). Return on Investment in Training and Performance Improvement Programs (2nd ed.). Woburn, MA: Butterworth-Heinemann.
Kirkpatrick, D.J. (1994). Evaluating Training Programs: The Four Levels. San Francisco, CA; Berrett-Koehler.
Johnson, J., Catania, M., Freitag, D., Gmach, M., Hamstra, B., McLaughlin, D., and Williamson, F. (2005). Evaluating Field Development Activities: A Practical Road Map to ROI. LIMRA’s MarketFacts Quarterly, 24, 30-33.
QUESTIONS FOR DISCUSSION
- Are the data and results credible?
- Should the company enroll additional sales reps in the training program?
- How can you apply this process in your company?
- What would happen if we could prove that training makes a difference?
- What obstacles do we face in getting “clean” credible data?
- For new clients generated, could the lifetime value of a new client be used in the analysis?
ABOUT THE AUTHORS
Delores Freitag, Assistant Vice President, Talent Development, LIMRA. Delores has more than 25 years of experience in sales management and training for the financial services industry. Over the course of her career, she has interviewed and trained thousands of producers, managers, and wholesalers.
Delores began her career with Prudential, where she served as internal consultant for Prudential Securities Retail Division and director of training for Prudential Mutual Funds. She developed the firm’s first competency-based assessment tool for selection of stockbrokers and advised directors on selection, development, and retention issues. She also provided initial training for new recruits and advanced training to experienced managers from all functions within the company. In addition to these accomplishments, Delores launched dedicated wholesaler training for Prudential’s asset management unit.
In her current role, Delores designs and delivers customized training programs for agents, advisors, managers, and field support staff of client companies. She is credited with developing LIMRA’s Recruiting and Selection in the 21st Century program, LIMRA’s Sales Leadership Development System, and LIMRA’s Sales Effectiveness Programs, including Trustworthy Selling, Selling with Style, Managing with Style, and Sales Booster.
Delores can be reached at [email protected] or (860) 298-3821.
Nancy Murphy, B.A. Mathematics, Associate Research Consultant, Assessment and Development Solutions Group, LIMRA. Nancy is responsible for conducting industry-wide and company-specific validation studies for LIMRA’s sales and management assessment products as well as its training and development programs. She can be contacted at [email protected] or (860) 298-3911.