My "Bersonal" View

Stop “Probing For Pain”

by Thomas Freese

Trying to uncover a customer’s pain points is a mistake that’s not only costing companies a ton of money in terms of lost revenue and missed opportunities, it continues to be promoted amongst sales teams all over the world.

“Easing a customer’s pain” may seem like a nice gesture, but the notion of probing for pain (only) contains two illogical flaws in today’s selling environment. First, focusing on prospects who are currently experiencing pain significantly reduces the size and scope of your target audience. While everyone agrees that people who are ‘in pain’ are indeed motivated to find solutions, it turns out that decision makers and influencers are just as motivated to purchase products and services because of many other factors.

Technology titan Apple, for example, has sold over a billion (with a “B”) iPhones since 2007, and they generated $9+ billion in iPod revenue before that. How many iPods and iPhones do you think were purchased because the customer was in some sort of pain?

It turns out that customers purchases products and services based on a wide range of decision factors. Whether you sell technology solutions, manufactured goods, employee benefit packages, or healthcare services, the decision to acquire your product or service may be driven by something as simple as the desire to achieve a goal or satisfy specific business objectives. Potential buyers can just as easily be motivated by wants, needs, or an opportunity to improve their existing condition.

So, why would you want to limit the size of your audience to only focus on customers who are currently experiencing pain, when the larger opportunity includes prospective buyers who are just as driven to acquire solutions to address any number of other wants, needs, goals, objectives, and desires?

In addition to limiting the size of your target market, the second flaw with the strategy of uncovering the customer’s pain points is that it can come across as highly offensive to the people you are so desperately hoping to influence. If you call on customers who are either territorial or proud of the work they do, good luck bonding with them by trying to expose their flaws, faults, and deficiencies.

Case in point, if you call on a Network Manager and ask: “So, what problems do you have managing your data?” Predictably, their knee-jerk reaction will likely be to say, “We’re doing just fine, thank you (click).”

Even if you mean well, probing for pain is a high-risk strategy. Trying to expose a customer’s weaknesses, or shining a light on their oversights, is one of the quickest ways to put people on the defensive. If you really want to get under the customer’s skin, try firing off a series of pain-oriented questions like: “So, what mistakes have you made?” “What decisions do you regret?” Heck, you might as well ask them, “How ‘come you’re still employed here?”

Fortunately, there’s a proven antidote to this old-school practice of attacking the customer’s ego. All you have to do is reverse the premise of your questions. Instead of ‘chipping away’ at the customer’s pride by trying to indict the status quo, or continually exploring what’s wrong, a more thoughtful salesperson could just as easily ask (an IT Manager, for example), “How important is securing the data on your company’s network?” When talking with an HR Director, you could ask, “Would you be interested in a cost-effective way to expand your company’s employee benefits package?” A better way to explore a Facilities Manager’s needs in a manufacturing plant might be to ask, “Would you be open to a couple of ideas on how to improve your plant’s overall operational efficiency?”

Before you start dialing the phone, or begin crafting a bunch of clever one-liners to take out into the field, it’s important to recognize that an effective needs development strategy requires more than a single ‘magic’ question. That’s why I’ve written multiple books on the subject.

For our purposes here, I’m merely pointing out that “probing for pain points” is one of the most common mistakes sales teams make. On the other hand, salespeople who focus on helping their customers satisfy a broader range of goals, wants, needs, and objectives can significantly increase their own sales results.

Here’s the best part. Exploring decision drivers that extend far beyond just uncovering “pain points” is actionable on your very next customer call—that is, if you are open to a couple of ideas.

Whenever there is a new Tax Bill we can find opportunities. With the Trump Tax Bill most of the opportunities are in the corporate world. Part of Trump’s reasoning is that if we give tax cuts to the business it will trickle down to the employees. This may be true, but it is also true that the owners of the business will see some “trickle down” too. That might be where the “real” planning opportunity is. Here is a brief summary:

Choice of entity

Choice of entity depends upon tax and non-tax factors. All such factors should be considered when deciding which type of entity is most advantageous. From an income tax law standpoint, the new 21% flat tax on C corporations is attractive. For some business owners, the first instinct might be to change to C corporation status. However, profits of C corporations are still subject to double taxation when distributed to shareholders. Also, if the C corporation sells most or all of its assets to an outside party (often referred to as an “asset sale”), the sale may be subject to double taxation.

Business owners of pass-through entities are subject to one level of taxation based on individual tax rates with a possible 20% tax deduction against their pass-through income. However, the 20% tax deduction may be reduced or eliminated based on individual taxable income and other factors. The possible reduction or elimination of the 20% tax deduction for pass-through income would be an important factor to consider, particularly for business owners of profitable S service corporations. If an S corporation converts to a C corporation, no immediate gain or loss is generally realized upon conversion. Once the S election is revoked or terminated, however, the corporation cannot elect S status again for five years without IRS approval.

Business planning and life insurance

 In larger C corporations that were previously subject to the alternative minimum tax, cash value life insurance may be more attractive in the absence of that tax. For some business owners, an executive bonus to a key employee that increases deductible wages may result in a higher qualified business income deduction by raising the wage portion of the calculation. This may increase the appeal of an executive bonus or restricted bonus plan.

With a lower business tax bracket, some business owners may revisit their qualified plans if these plans are the primary vehicle for their retirement funds. With the sunset provision for lower individual income tax rates, business owners may be receiving qualified retirement distributions in a higher tax bracket. A simple non-qualified bonus plan funded with life insurance may be attractive as a supplement to qualified plan benefits.

Personal planning for business owners

Since the new deduction for qualified business income is applied on the basis of an individual owner’s taxable income, taxpayers who own a pass-through business may wish to consider planning steps at the personal level. These may include making charitable gifts, deferring income, and accelerating deductions to manage taxable income levels. A business owner whose spouse has high earnings or income even from an unrelated business may be subject to phaseout of the deduction based on the taxable income on their joint return.

Cross purchase buy-sell arrangements

 Many small business owners, particularly in businesses with two or three owners, may prefer to own the policies on themselves that are used to fund a cross purchase agreement, but may have been advised against it. This is due to (a) possible estate inclusion of both the business and the life insurance death benefit, (b) the need for a split dollar agreement and yearly inclusion of the value of the economic benefit, and (c) possible “transfer for value” concerns which may cause a portion  of the life insurance death benefit to be considered taxable income to the beneficiary of the proceeds. With the increase in the estate exemption to over $11 million, more owners might find owning the policies themselves more appealing (assuming there’s no “transfer for value” problem).

Key employee retention and retirement

 The underlying reasons for these arrangements — to recruit, reward, retain and retire top employees — are unchanged. Bonus plans, non-qualified deferred compensation plans, and split dollar arrangements are commonly used to achieve these goals. The reduced taxes mean that more funds may be available for these plans.

Summary

The changing tax environment is a great time to look at business planning goals, such as succession planning, business protection, employee retention, and protection of business owners’ families and lifestyles. The income tax reductions may make more funds available for meeting these goals. In addition, business owners might find that a bonus arrangement or other change in wage structure could offer a more favorable outcome for the new qualified business income deduction.

While many of the benefits of the Tax Cuts and Jobs Act are set to sunset after 2025, the basics and benefits of planning never expire. As with all business planning strategies, it’s vital that businesses consult with local counsel for detailed tax and legal advice. This is your opportunity to be the quarterback on the planning team. Knowledge is power.

Most of you who have attended our training know that I am a disciple of Thomas Freeze and his “Question Based Selling” approach. Most of what I have learned from his tapes and courses I have adapted to our industry and we cover within our various trainings. Relationship Building is one of his areas of expertise. In his new book “Sales Force 2020” Thomas spends a lot of time updating his ideas for today’s world. Here is a brief overview from the master himself.

Traditional Relationship Building is Overrated

By: Thomas A. Freese

Being outgoing, gregarious, and friendly used to be the savvy salesperson’s ticket to penetrating new accounts. Today, key decision makers on your target list of prospects already have plenty of friends. And, given the sheer volume of solicitations that come in on a daily basis, it shouldn’t surprise anyone that the next cold call that gets lobbed in the customer’s direction has only a very small chance of success.

Some of the reason sellers are experiencing such low hit-rates is self-inflicted, by using traditional catch-phrases like, “I would love to…”, or, “I just need a brief moment of your time.” Decision makers know you’re not just looking for a brief moment of their time. They also assume salespeople have quotas to hit and would really “love” to boost their commissions.

No doubt your intentions are good, as most salespeople are earnestly trying to provide value to their customers. The challenge is separating yourself from the countless other solicitations potential buyers receive on a daily basis, and then causing decision makers to “want to” engage with you.

Suppose if it were possible to reverse this trend. What if you could create an 80%+ success rate when reaching out to new prospects, rather than continue enduring the typical 90%+ failure rate? How is this possible, you might ask? Acquiring the skills necessary to fill your pipeline faster, and with more qualified prospects, is actually easier than one might think. But, it does require sellers to have an appreciation of next-generation selling skills, which is very different from just trying to ‘buddy’ your way into potential opportunities. There’s no magic, and God knows old-school sales tricks or gimmicks aren’t going to work moving forward. Instead, there are a few very important questions individual sellers (and entire sales teams) should be asking themselves, like:

• What are you doing to leverage curiosity to get mind share from key decision makers in target accounts?
• What Diagnostic Questions™ are you asking to convey credibility?
• How does opening with a generic elevator pitch differentiate you from competitors who are making similar claims?
• What are you doing to secure incremental commitments on the way to the larger sale?

When you’re on the receiving end of cold calls at home, I bet you’re not excited about giving information to people you don’t yet know and trust. So, why should we expect the old-school mentality of trying to “befriend” prospective customers, if that strategy no longer works on you or me? Hmmm…

Annuity Consumer Choice Campaign wants fixed indexed annuities out of BICE

Annuity supporters are fighting to ensure that fixed indexed annuities get treated the same as other fixed annuities and not lumped in with securities products under the Department of Labor’s fiduciary rule. The newly formed group, the Fixed Annuity Consumer Choice Campaign, or FACC Campaign, is gathering signatures for a petition to be sent to Labor Secretary Alexander Acosta “urging him to delay implementation” of the fiduciary rule exemptions to July 1, 2019, and “fix the treatment of fixed indexed annuities.”

More than 1,800 signatures have been received so far, the group said.

As it stands now, fixed indexed annuities fall under the fiduciary rule’s best-interest contract exemption, or BICE.

State Fiduciary Rules Create a Regulatory ‘Mess’

Advisors “don’t know what their obligations are under state law” or what to do if they conflict with federal regulations,“That creates a unlevel playing field that inherently disfavors fixed annuity providers and products,” the group states on the website.

“Placing FIAs in BICE would have severe adverse repercussions for consumers by limiting choice in the IRA marketplace and would violate the spirit of the Harkin Amendment, which was adopted by Congress to distinguish regulatory treatment of FIAs from securities products,” the group’s website states.

The group’s chairman, Dwight Carter, president of Financial Security Associates, said in a statement that the new group is called “a campaign because we are singularly focused on protecting fixed annuities through both the regulatory and political process. We know it’s now or never for both our agents and our clients so we felt it was important to put together this very focused initiative.”

The National Association for Fixed Annuities, which sued Labor over its fiduciary rule, told the department in a comment letter that “the last-minute decision to unfairly and unnecessarily bifurcate the two general types of fixed annuities under two separate prohibited transactions exemptions — the best-interest contract exemption for fixed indexed annuities and PTE 84-24 for fixed rate annuities — will adversely affect retirement savers.”

The “essential change” to further the goals set forth in President Donald Trump’s Feb. 3 memo requesting that Labor review the fiduciary rule “is to return fixed indexed annuities to PTE 84-24, as was the case in the Department’s proposed rule issued in April 2015,” NAFA said.

“NAFA has maintained throughout the rule making process that both fixed rate and fixed indexed annuities should be subject to PTE 84-24 under the rule, and we have argued that the decision to switch fixed indexed annuities to the BICE reflected a fundamental misunderstanding by the Department regarding the features and similarities of these two types of fixed annuities.”

Here are 10 reasons to consider a fixed annuity:

1. Competitive interest rates. Annuities offer the flexibility of several interest rate guarantee options. Your clients can lock in the initial interest rate guarantee that works best for them.
2. Tax-deferred growth. While money remains in the annuity, the principal earns interest and the earnings earn interest.
3. No up-front sales charges or administrative fees. Once the contract is issued, 100% of your clients’ money will begin earning interest.
4. Protection from market volatility. Fixed annuities have no market participation.
5. Guaranteed death benefit. Upon the death of the owner, the annuity value is paid directly to the beneficiary, without any withdrawal charges or market value adjustment (if applicable), generally avoiding the probate process.
6. Access to funds. Most fixed annuities allow for penalty-free withdrawals up to a specific amount and there are multiple withdrawal charge waivers that can be used under certain defined circumstances.
7. Systematic withdrawals of interest. Clients can receive payments monthly, quarterly, semiannual or annually.
8. Guaranteed income for life payout option. with the annuitization option, electing the lifetime payout option will transform the contract balance into a guaranteed income stream for life.
9. Diversification. A tax-deferred fixed annuity can serve as a conservative addition to any retirement portfolio.
10. Extra help to grow your business—marketing and sales support. ISN can provide comprehensive sales training including materials to both agents and bank customers. An annuity is the only financial product available that can guarantee income payments the contract owner won’t outlive.

Call ISN Network @ 1-800-338-1892 x 1

for any information on annuities.