What we have to Regret
Updated: Aug 25, 2020
"What we have to regret most often is the human perversity that regards truth as slander where its acceptance means changing a previously advocated practice... Clearly, the moral and ethical requirement is for fact-finding and then fact-facing." C.H.D. Clarke (as quoted in Heartsblood by David Peterson)
"...it is a capital mistake to theorize before one has data. Insensibly one begins to twist facts to suit theories, instead of theories to suit facts." Arthur Conan Doyle in Sherlock Holmes
"[Emotional] Arousal can compel us to act against our long-term interest -- because, in the immediate term, we suddenly can't quite tell the difference." The Confidence Game, Maria Konnikova
It is interesting in these politically charged times that these three quotes all comment on the same facet of human beings, each from a different era and a completely different genre. The first is from around 1960, Canada, and the context was environmental policies. The second is from England, around 1890 and is in a detective novel (for all those who don’t already know this). The third is from a study on con jobs from around the world but has an American author and was written in 2016.
In other words, people believe what they want to believe. When you are selling something that people do not want to buy, i.e., insurance (people often believe they will never have a loss, so why buy something they not only don't want but therefore don’t need), one inherently has many obstacles to overcome to persuade clients to buy the coverage they actually need. This difficulty is one reason why the vast majority of insurance distributors sell inadequate coverage relative to what I would argue their clients actually need.
What follows is only for the elite agents who are willing to put forth the hard work to not only learn their coverages but also to learn how to overcome the human instinct to be irrational regarding insurance purchases. Getting people past their instincts to draw themselves inward and limit their insurance expenditures to their potential detriment is why good producers make a lot of money. They've figured out how to get past this barrier.
The key, obviously, is not to use facts that fly in the face of what the prospect believes even if what they believe is wrong. If you do so, prospects will hold their beliefs more closely and grow less likely to purchase from you. A key rule in sales is quite similar to the medical protocol of, "First, do no harm." For producers, however, it is "First, do not cause prospects to build their defenses against hearing you."
Two main methods exist for achieving this goal and by no means is either always successful as there are always some people you can't get through to no matter what you do. For those prospects, all you can do is plant seeds for later when their pain is greater. For others though, use stories or questions. The importance of stories is they bypass facts and gain emotional buy-in, emotional trust. Stories work well when the coverage being sold is common and the prospect has a fairly high understanding of their exposures/need. For example, almost everyone knows they can be sued if they are at fault for an accident. They have that knowledge. Their pain depends on the quantity of assets they will possess now or in the future. Stories work.
Where clients' knowledge levels are limited, cyber for example, stories don't work as well. The prospects simply cannot relate to how they will ever be damaged by a cyber claim. They flat out don't believe it and no matter what facts or stories you present they will insist it can't happen to them. In these situations, your stories might as well be in Greek for as effective as they will be. Where client/prospect knowledge is limited, one must ask open ended questions that will strike emotional uncertainty. (Self-servingly, Burand Education has a premier coverage education program that explains these questions simultaneously.) Well scripted, open-ended questions cause people to open their minds rather than close their arms as stories and facts will affect. Clients/prospects have to open the door themselves, of their own accord, for them to consider themselves vulnerable. They have to see their vulnerability as real if they are to purchase these important coverages.
Businesses, including independent insurance agencies, are usually run on the same often irrational instincts. I can't begin to enumerate all the times agency owners did not hire me for agency valuations because I gave them the IRS’s requirements. The owners found some appraiser who agreed they were right, when they really were wrong. I have witnessed the same effect with E&O advice. I have seen the same mistakes relative to employment contracts and buy/sell agreements. I remember one time an owner insisted his family would always get along and therefore, they did not need employment contracts or a proper buy/sell agreement. He eventually lost one-third of his net worth and his family no longer eats Thanksgiving dinner together. To his credit, he asked that I tell every other owner that no matter how well the family gets along, get good agreements in place. Of course, people want to believe their family will always get along so when I share his advice, rather than use questions, no one ever agrees to have high quality agreements written. They do not want to believe their family could ever disagree. That only happens to other families.
Business owners have one additional tool that wise and often the most elite business owners use, while others ignore it. That is, they have the ability to hire outside third parties or even an internal person who is always willing to speak their mind -- and then they listen because they have an awareness of their own human propensity not to listen. In other words, they take direct action to avoid being the emperor without any clothes by not having someone around to tell them that at 57 years old, they don't have a good enough body to walk around naked.
No one ever changes a human without that human deciding to change. No human ever uses pure facts to make decisions. Understanding how to help people make better decisions and then how you can improve your own decision making is the key to helping yourself, your employees, and your clients make far better decisions in many aspects of life.
NOTE: The information provided herein is intended for educational and informational purposes only and it represents only the views of the authors. It is not a recommendation that a particular course of action be followed. Burand Insurance Education, Burand & Associates, LLC and Chris Burand assume, and will have, no responsibility for liability or damage which may result from the use of any of this information.