Concepts of Personal Selling in Insurance | Steps in Selling Process

Concepts of Personal selling in Insurance

Among the various promotional strategies, personal selling occupies a place of outstanding significance. This is due to the fact that the insurance business is substantially influenced by the instrumentality of insurance agents and the rural career agents. If they are aware of the art of informing, sensing and persuading the potential policyholders, the task of insurance companies is simplified considerably.

It is well known that personal selling is based on the excellence of an individual. This focuses our attention on the ability of an individual to influence the impulse by activating the persuasion process. This makes it significant that the insurance agents as well as the rural career agents have certain outstanding properties or attributes such as patience, communicative ability, attractive personality and commitment to the profession.

The insurance business cannot exist if the agents stop working. Hence, the insurance companies are supposed to assign due weightage to the excellence in an individual who is assigned this responsibility. They need to provide due incentives to the insurance agents so that they work satisfactorily and keep on moving the process of informing and persuading the policyholders/ prospects.

While recruiting agents, the insurance professionals need to be careful, so that persons with high communicative ability and attractive physique and ever lasting patience are assigned the responsibility of acting as an agent. The branch managers bear the responsibility of managing and developing the agents by monitoring their contributions in the process of increasing the insurance business.

Branch Managers are supposed to organize refresher courses to develop the agents so that the emerging trends in the investment potentials of a command area vis-a-vis the changing levels of expectations of the policyholders/prospects and transmitted to them in a right fashion and on time.

Steps in personal selling or selling processes

Every successful sale needs well defined steps. An insurance sales representative or an agent is required to adopt the steps given in the following chart to complete the selling process:

Steps in Selling Process
Steps in Selling Process

1. Prospecting and qualifying

The first step in the selling process is to identify prospects. Although the company may provide leads, sales representatives need skills in developing their own leads. Leads can be developed in the following ways:

  • Asking current customers for the names of prospects.
  • Cultivating other referral sources such as customers, friends, noncompeting sales representatives, bankers, clubs, associations, etc.
  • Engaging in speaking and writing of activities that will draw attention.
  • Examining data sources (newspapers, directories) in search of names.
  • Using the telephone and mail to find leads.
  • Dropping in unannounced on various offices (cold canvassing).

Sales representatives need skills screening out poor leads. Prospects can be qualified by examining their financial ability, nature of business, special requirements, location and likelihood of continuous business. In Asia, direct selling representatives rely mainly on extended family kinship patterns and go-between for prospects.

2. Pre-approach

The sales person needs to learn as much as possible about the prospect company (what it needs, who is involved in the purchase decision) and its buyers (their personal characteristics and financial reports), acquaintances and others to learn about the company.

The sales person should set call objectives, which might be to qualify the prospect or gather in formation or make an immediate sale. Another task is to decide on the best approach, which might be a personal visit, a phone call or a letter. The best timing should be thought out because many prospects are busy on certain times. Before approaching the customers, a sales person must ensure the following:

  1. Information about your company, product and competition.
  2. Categorization of prospects-prospecting.
  3. Gathering information about the prospects — customer research.

Company Information

  1. What are the various businesses the company is in?
  2. What are the service(s) (policy/products) it markets?
  3. Who manages the company?
  4. What is the company’s standing in the market for each of its products/plans?
  5. Where the company’s offices are located?
  6. What are the organizational structure, policies and procedures?

Product Information

  1. What is the product?
  2. What are its features?
  3. What is the price/premium?
  4. For whom is the product / plan meant for?


  1. What is the business the competitors are in?
  2. What are the products they have and the features of these products?
  3. What are the strengths and weaknesses of their products / plans?
  4. What are their pricing strategies?
  5. What are their future plans?

Finally, the sales person should plan an overall sales strategy for the account.

3. Approach

The sales person should know how to greet the buyers to get the relationship off to a good start. This involves the sales person’s appearance, the opening lines and the follow-up remarks. The sales person might consider wearing clothes similar to what buyers wear; show courtesy and attention to the buyers; and avoid distracting mannerisms, such as pacing the floor or staring at the customer.

The opening line should be positive, for example,

“Mr. Shakul, I am Ravi from the ABC Prudential. My company and I appreciate your willingness to see me. I will do my best to make this visit profitable and worthwhile for you and your family”.

This might be followed by key questions and active listening to understand the buyer and his or her needs better. Different approaches may be used for different buyers.

A few Do’s

  • Smile
  • Give your card
  • Make a general benefit statement
  • Take permission to ask questions

A few Don’ts:

  • Do not sit till you are offered a seat.
  • Do not force the interview on the customer.
  • Do not sell the product without understanding the customer’s need.

4. Presentation and Demonstration

The sales person now tells the product “story” to the buyer, following the AIDA formula of gaining attention, holding interest, arousing desire and obtaining action. The sales person emphasizes throughout customer benefits, bringing in product features as evidence to these benefits.

A benefit is any advantage, such as lower cost, less work or more profit for the buyer. A feature is a product characteristics such as double sum assured benefit, accidental death benefit, waiver of premium, critical illness. A common selling mistake is to dwell on product features (a product orientation) instead of customer benefits (a market orientation).

5. Overcoming objections

Customers almost always pose objections during the presentation or when asked for the order. Their resistance can be psychological or logical.

Psychological resistance includes resistance to interference, preference for established supply sources or brands, apathy, reluctance to giving up something, unpleasant associations about the other person, predetermined ideas, dislike of making decisions and neurotic attitude toward money.

Logical resistance might consist of objections to the price, delivery schedule or certain product or company characteristics. To handle these objections, the salesperson maintains a positive approach, asks the buyer to clarify the objection, denies the validity of the objection or turns the objection into a reason for buying. The salesperson needs training in the broader skills of negotiation of which handling Objections is a part.

6. Closing

Now the sales person attempts to close the sale. Some sales people do not get to this stage or do not do it well. They lack confidence or feel uncomfortable about asking for the order or do not recognize the right psychological moment to close the sale.

Unless you close, you will be like a soccer team that plans its strategy, starts of well, dribbles all over the field with the ball in its control but is not able to score goals. Sales person need to know how to recognize closing signals from the buyer, including physical actions, statements or comments and questions — sales persons can use one of several closing techniques.

They can ask for the order, recapitulate the points of agreement, offer to help the secretary write up the order, ask whether the buyer wants A or B, get the buyer to make. minor choices such as the color or size or indicate what the buyer will lose if the order is not placed now. The salesperson might offer the buyer specific inducements to close such as a special price, an extra quantity at no charge or a token gift.

7. Follow-up and Maintenance

This last step is necessary if the sales person wants to ensure customer satisfaction and repeat business. Immediately after closing, the sales persons should complete any necessary details on delivery time, purchase terms and other matters.

The salesperson should schedule a follow-up call when the initial order is received, to make sure that there is proper installation, instruction and servicing. This visit would detect any problems, assure the buyer of the sales person’s interests and reduce any cognitive dissonance that might have arisen.

The sales person should develop an account maintenance plan to make sure that the customer is not forgotten or lost.