McDonald’s And Insurance Sales

When you read that title, I know you are thinking, “What in the world does McDonald’s have to do with insur­ance sales?”

As you are probably aware, McDonald’s is among the most successful franchise operations. Here’s evidence that they do something right: Most small businesses fail within five years of opening. McDonald’s, on the other hand, went many years with­out a franchise failure.

But can we really learn something from the fast food industry?

First off, let’s address this question: What’s a franchise? A franchise is essen­tially a system–and the idea is that if the franchise owner follows the system and does what the organization tells them to do, the franchise owner will be successful.

I remember reading an article about the early days of McDonald’s. In those days at least, the best franchisees where farmers. Farmers knew how to follow a system. The worst franchisees were MBAs. MBAs wanted to change the system. They thought they were smart and that they could improve the system.

Some readers may remember Burger Chef. At one time in the 1960s, McDonald’s and Burger Chef were close to one another in size. Like McDonald’s, Burger Chef had a system that worked. In 1968, General Foods purchased Burger Chef and thought they would improve upon the existing system. It didn’t work; Burger Chef was sold to Hardee’s and has long since disappeared.

There was a management consulting group that did a survey of salespeople. They found that 78 percent didn’t have a sales system or sales process, or they had a sales process but didn’t use it. If you think about it, that could explain the reason why 20 percent of salespeople typically generate 80 percent of the business. The survey looked at salespeople across several industries. I think if you looked at the life and health insurance business, you almost certainly would find the same results.

When I wrote Sales Lessons from the Masters, I looked at the common denomina­tors that made Frank Bettger, W. Clement Stone, Joe Gandolfo, and Ben Feldman successful selling insurance. One of the common denominators is that they all had a sales system or a sales process.

  1. Clement Stone started Combined Insurance in 1920 with $100. He grew it into a $1 billion company. He did it primarily selling a pre-issue accident policy. When he started in 1920, there were hundreds of insurance companies and thousands of agents selling similar plans. By the 1950s, his company and agents were the only ones still selling that kind of plan.

His agents would sell as much in a week as agents with other companies would sell in a month. The reason? Stone had a sales system or process. If the agent followed the system and made the calls, they would succeed. It was just like the McDonald’s franchise.

Ben Feldman, who is considered by many to be the greatest life insurance salesperson ever, had a sales system that he followed.

Few realize that Ben was a package sales­man. His packages were bundles of whole life designed to solve a specific problem. For example, his educational package used whole life to fund college education. He would ask the prospect, “Do you want your son or daughter to go to college? Would you rather pay for it in four years or over eighteen years?”

When he developed a new package, he would test it on his wife, office staff and sons. His son Marvin told me that he and his brother knew a lot about life insurance by the time they graduated from high school—from Feldman testing his packages on them. Feldman believed that if the package was simple enough for a high school student, then a business owner should understand it as well.

He would put together a list of prospects and start calling them.

Recently, I have worked with several small life insurance companies to develop a sales process around simple needs analysis. The process covers the approach through answering objections and closing.

The result for these companies has been the sale of larger face amounts and improved closing ratios.

Here’s a key point to remember: You can’t just throw a sales process out there and expect agents to use it. You have to motivate and sell agents on what the sales process will do for them. The agent needs to understand the “why” behind the process, what the process will do for them, and the words to say.

When instituting a new sales process, a company or marketing organization is attempting to change behavior – specifically the sales behavior of their existing sales team. Repetition is the key to changing behavior. Salespeople hate repetition, but repetition leads to mastery. Simply put, the more you do something, the better you get at doing it.

For many years, my goal in this business has been to say something to an agent 10 times in slightly different ways each time, so that eventually the agent picks up the phone, calls me, and and says, “Ken, I have a great idea!” And when he or she relates the “great idea,” it’s my own words coming back to me.

Joe Gandolfo said selling is 98 percent understanding human beings and two percent product knowledge. That’s not to say product knowledge isn’t important. But as an industry, I feel like we have it totally screwed up. We have focused 98 percent of our efforts on product and only two percent on understanding human beings. I believe that is one of the reasons our industry is in a state of decline.

A good sales process does not ignore product, but its primary focus is on gaining a clear understanding of both the agent and the consumer.

Do you want to increase sales within your organization? In my experience, providing training for agents to understand, learn, and use a sales process is a step in the right direction. But developing that process takes work.

So, in answer to that question we asked early on, I believe that yes, we can learn something—and something important—from the fast food industry.