A Life Insurance Salesman

Overcoming "soft objections," hustling to line up meetings, and navigating the line between business and friendship with David Johnson, a third-generation life insurance salesman. What is the mistake that "ruins careers" for salespeople? And what is a "feed list"?

Got a comment or suggestion for us? You can reach us via email at jobs@whatitslike.com

Want to be on the show? Leave a message on our voice mailbox at (919) 213-0456. We’ll ask you to answer two questions:

1. What do people think your job is like and what is it actually like?
2. What’s a word or phrase that only someone from your profession would be likely to know and what does it mean?

Transcript

Dan:
David Johnson is a third generation life insurance salesman, but that wasn't his first job.

David:
The summer that I got my driver's license, I was making $4 an hour, picking up rocks in the sun at the country club across the street from our house. And my dad said, why don't you come work at the office? I'll pay you 10 bucks an hour. And that sounded like a way better opportunity than what I was doing.

Dan:
At first he just answered the phone, sorted the mail, did some filing.

David:
And then pretty quickly, within about a year, he had me on the phones, making telephone calls, setting appointments for other agents. At that time, our group was endorsed by the Georgia Association of Realtors to sell disability insurance to real estate agents at a premium discount.

Dan:
Oh my, so you were cold calling?

David:
And so you can buy a list of anything. My dad bought a list of every real estate agent in the state of Georgia with their home telephone number. And my job was to call 200 of them a day. I was cold calling, yes, 16, 17.

Dan:
At age 16, 17?

David:
I got my own little office, and I had a phone and this stack of names and a ruler with a rubber band wrapped around it. And I just moved the ruler down the page.

Dan:
50 calls, so what, no one was picking up the phone or what?

David:
There were about 50 names on a page, and I could make about 50 calls in an hour.

Dan:
How does that math work?

David:
There were a lot of messages. All there were were home telephone numbers. And so I was paid $5 an hour plus 10 cents a call plus $5 per appointment that I set. My job was to make 200 calls in a day. But every time I set an appointment, that would take 10 calls off the number of calls I had to make that day. So for the $5 and the 10 call discount, I was highly motivated to set any appointment that I could.

Dan:
[LAUGH]

David:
I started working in the office the summer that I turned 16, and I will be 50 here in a month. And other than running away to college for four years, this is where I've been my entire adult life.

Dan:
I'm Dan Heath, and this is What It's Like to Be. In every episode, we walk in the shoes of someone from a different profession. A forensic accountant, a cattle rancher, a tennis coach. We want to know, what do they do all day at work? How he refined the art of finding potential clients. What disastrous mistakes salespeople make when scheduling a meeting. And what it was like working with his dad, day in, day out. Stay with us.

Dan:
Selling life insurance is a 100% commissioned business, typically. There's no base salary, no guaranteed income. If you don't sell, you don't get paid. And that means you've got to get in front of potential clients.

David:
My dad says there are only two things that we do that have any value, and that is seeing people and fighting to see people.

Dan:
Mm.

David:
He said anything else that you're doing should be delegated. And if you think that you're being productive doing anything other than those two things, then you're not telling yourself the truth.

Dan:
Seeing people and fighting to see people, that's fascinating. So that's the work.

David:
That's the work. The job is to get in front of the customer. Being in front of the customer is a joy. That's the truly fun part. The hard part is setting those things up and trying to get people's attention. My son is 18, and he will often just ask me at breakfast, what do you have going on today? And one of my standard responses is, I'm gonna go kick some anthills and just try to get some things stirred up, try to get some people to interact with me.

Dan:
I asked David, once you've found those people to interact with, what happens next? What does that first outreach look like?

David:
I think it's a miracle to get anybody's attention for any period of time. And so if I have that, I want that to be productive. If you were a client of mine and were to refer me to a friend of yours, and you've shared their contact information with me, I tend to reach out to people by text. And just reference the fact that I was given their name by their friend Dan.

Dan:
Mm-hm.

David:
And I ask, may I call you with a quick business question? And if they respond to that, I call them. If they don't respond to that, then no problem. What they might do with that is they might call you and say, who is this?

Dan:
Who's this guy?

David:
Yeah, what is this?

Dan:
Yeah.

David:
And that's fine. So we're totally out in the open, nothing's being hidden. And then once I get on the phone with them, hey, thanks for the quick response. Dan has been a good client of mine for a long time. I've helped him with a lot of his life insurance planning and other long-term planning. He spoke very highly of you to me. I wanted to see if we could set up an introductory call. I'd love to share with you what we do for our clients and see if I could be of service to you. So something just very simple like that.

Dan:
And so if you have, say, a hundred contacts of that kind, you know, kind of warm leads, walk me through the funnel from there. Like, how many of those would tend to agree to meet specifically about it, and then ultimately, how many might become clients?

David:
Yep, so if I had 100 names, I would be very happy if 20 of those 100 would acknowledge that I exist.

Dan:
[LAUGH]

David:
So if 20 of them will respond and say, yes, I'll talk to you about something for some period of time. From that, I'd be happy with half of those turning into nice, warm meetings. And once we get there, we're going to have probably six or seven. They'll probably become a client and we'll start a professional relationship.

Dan:
So this is very much a numbers game, it sounds like.

David:
Yeah, I think so.

Dan:
David said most of his compensation comes right when he sells the policy, meaning that even though he's been selling for many years, he doesn't come into a new year with a guaranteed big base of income from renewals. He's got to sell new policies. I asked him if that was scary.

David:
To me, scary isn't the right word, but there are mornings when you walk in the door and you look around and say, okay, I do not have nearly enough going on. And that might be on January 1st and it could be any time during the year. You could have had a great batch of referrals that maybe turned into something, but that has dried up. So the job constantly at all times, whether it's January 1st or any day, is to be finding a new group of names, constantly expanding your network while also remaining in contact with your current clientele to make sure that they are happy and taken care of and see if there are any changes that they want to make and are there any ways that they can help you meet new people as well.

Dan:
And does that stress you out, you know, constantly having to be on the hunt, or have you just adapted to it long ago?

David:
I think that it is stressful. I think the reason that it is stressful is that as your life builds up around you-- our kids are 23, 21, and 18-- there's a certain amount that you now have to have. Like in the first couple of years, if you make money or don't make money, it'd be great to make money, but if you didn't, it wouldn't be disastrous.

Dan:
Mm-hm.

David:
As your life builds up around you, you do have to keep this train moving down the tracks. And so I am aware of the fact that I need to keep producing. This has never been an academic exercise for our family.

Dan:
Up to now, we've mostly talked about the job of selling life insurance policies, but part of David's job is he's the person who gets called when someone dies, and a family member needs to collect the insurance money.

David:
It's probably more rare than you would think. In order to buy a life insurance policy, the insurance company sends you through an underwriting process, and the purpose of that is to make sure that you're in relatively good health and to give them a reasonable expectation that the claim is pretty far off into the future. So that happens a couple of times a year. So it's not a regular occurrence.

Dan:
David says those moments, when they do happen, get at the very heart of what the job is about. He once had a client who died of a heart attack.

David:
His wife did not come to meet with me for several months. Normally the family wants to get with you relatively quickly because you have a significant amount of money to deliver. But in this case, it was several months, and when she came over, she came over with her dad, and we were sitting there and filling things out. And as she was leaving, she said, "I have delayed this meeting because it's like this meeting makes this official." And she said, "I've been trying to delay the weight and heaviness of that." So I thought that was pretty profound.

Dan:
Hey, folks. Dan here. We've got a great bunch of episodes coming up. An NBA referee, a London cabbie, a marine biologist. The show's producer, Matt Purdy, and I were brainstorming about potential ideas for another series, kind of like the summer jobs thing we did a few months ago. There's one silly idea we came up with that we liked, an under-series, underwriter, undertaker, and then something else, understudy? Is that a real job? Undersecretary of Defense? Underwear model? What do you think should be included in the under-series? Let us know, or if you have a counterproposal for a different series, shoot us a note at jobs@whattitslike.com. And now back to the show.

Dan:
Early on in David's career, the firm lost a crucial endorsement of a school district. David spent his days reaching out to teachers in that school district, and so when he couldn't do that anymore, he was lost.

David:
So I was at a-- I was at true zero. And three months after that, in July of '97, I told my dad, I said, I don't think this is going to be able to go on much longer. I think I am on my way out. And it made me unbelievably sad and also scared because I had no idea what I would do.

Dan:
You’d probably never had to think about a plan B, it was always just -

David:
Right. I had gone through four years of college only mildly paying attention because it doesn’t really matter.

Dan:
You’ve got a sure-thing job waiting for you.

David:
Right. It doesn’t totally matter. And so I wasn’t prepared for anything other than the business and it just looked like it was zero. And there was nowhere to go. And my dad's answer to everything always was, just keep doing what you're doing and everything will be fine. And this one particular day where I was really in the pits, I said, “Please do not tell me to keep doing what I'm doing because it is not working.” And he therefore had no response.

Dan:
It wasn't until he discovered the techniques of another salesman that he was able to get back on track.

David:
There's a guy up in Western Canada named Wayne Cotton. If there was a life insurance hall of fame, Wayne would be in it. He's one of the all time greats. And he created a system for, at its core, what it meant for me, it taught me how to get an endless supply of referrals and introductions from clients to people who they knew warmly and how to get introduced to those people on a warm basis, how to follow-up with them, how to set the first meeting, what to do in the first meeting. It took me from being willing to work but not knowing what to do. It gave me a track to run on. It told me what to do.

Dan:
David says Cotton's biggest lesson was that when you ask someone to refer you to their friends or family, don't do it as an afterthought.

David:
He said, since our whole life depends on being introduced to new people, we have to make this its own separate event … So he taught me, after someone has bought… Back then we were issuing paper policies, now everything is done electronically. I would call people and say, “I have your policy here, can I bring that out to you.” Sure, no problem. And I’d say, “Tell you what, can we meet for lunch, I've got a couple of other things I'd like to talk to you about when we meet. I'd like to share with you how I get introduced to other people and see if you can help me expand my network. 

Dan:
Another part of Wayne Cotton’s system was: Don’t just ask someone if they know anybody who might be interested—that’s way too vague. You want to give them a profile: I’m looking for people who are 25- to 35 years old, married with young kids. Do you know anybody like that? And so those two principles: Taking referrals seriously and getting laser-focused on who you want to be connected with – vaulted David to another level. 

David:
In the next 8 months or so, I got 1,500 introductions to other people. So, a big question in our business is, “Am I living in a world of scarcity or am I living in a world of abundance?” And prior to coming across Cotton’s system, I had felt like I lived in a world of scarcity and everything was drying up. And then, after being on his system for a little while, I realized, “Okay, wait, no. This is endless. You live in a country of 300 million people, you’re selling intangible financial products. You can get licensed in another state in two days. So you can work with anybody anywhere. You are living in a world of abundance.

Dan:
The other critical piece of advice David got in his career came from his dad.

David:
My Dad said, "You have one job, and that is, do not ever leave the office on a Friday without 10 appointments lined up for the next week." He said, "An appointment is defined as you and the prospect have both agreed on the date, time, and place. If you have to call them back later to confirm anything, then that one doesn't count."

Dan:
I love that.

David:
"If you will commit to doing that and do it," he said, "within a year you'll be going around giving speeches on how to sell insurance, and it will not be because you've done anything particularly great. You will win only on volume." It was such a good goal for me. It was healthy for me. It was scary, but it was healthy for me to sit around on a Thursday night and then into a Friday morning and have seven meetings lined up for the next week and to come into work just terrified and to say if I don't get three appointments today the world is going to end, and that was how I treated it.

Dan:
David talked about why that simple goal, 10 meetings before you leave on Friday, was so critical to his mindset.

David:
Where my dad was so wise was in establishing for me an activity goal and to say that you're showing up every day not for the results but for the activity and if you will just hit your activity goals you will not have to worry about anything else.

Dan:
That's so interesting. It's like you're training yourself to stay disciplined, to focus on the work and don't get caught up with the natural roller coaster ride of you had a day where a bunch of stuff closed and then two weeks where nothing closed and just keep your nose to the grindstone.

David:
Yeah, it forced me to become good at gathering referrals so that I would have enough people to call to get that number, and also, it forced me to get really, really good on the telephone, where if I was talking to a warm person, that represented 10% of this week's labor if by the end of this call I could get a meeting lined up for the next week. So I had to become good at recognizing soft objections, overcoming soft objections.

Dan:
What are some of those soft objections that you hear a lot?

David:
The classic is, "David, that sounds good. I'm not opposed to that. You know, my schedule right now is a little bit hairy." "Why don't you call me on Tuesday and we'll take a look at our schedules and we'll get something set up?" So I think that careers are lost on that sense because I think it's easy on our end of things to see that as a win and say, "Okay, well, I found somebody who's interested. I only have to call him back on Tuesday." And the problem is, especially, this was not as big a problem in 1998, but it's devastating today. When we go to call back, we're calling from a cell phone to a cell phone. They see that's us. They know exactly why we're calling, and the fact is now that we've reached next Tuesday, everything that was true when we talked last time is true again. that they are now living in is also just as crazy as the last one was and they say I know why he's calling and I don't want to answer and give him the same thing so they just hit send a voicemail and now we're trapped forever. So it's really important on that first call when we have somebody's attention and they've demonstrated some level of warmth and a willingness to meet to say why don't we shoot for Tuesday at 10. I'll send you a calendar invite if you match that up with your calendar and that doesn't work let me know but at least we'll have that day and time to shoot for.

Dan:
Yeah, it's so interesting just by switching the default, the default going from pushing out the scheduling to at least having a bluff calendar invitation that then they can cancel if they need to. That's a huge issue. This is such a thorny issue, isn't it? I know I have some friends who are financial advisors or maybe fundraisers for non-profits or charities. I mean, if they're close friends, obviously, it never enters my mind. But if they're kind of acquaintances or more distant friends and they get in touch, there's always some little part of my brain that's like, what do they want from me? And sometimes I kind of flip it around and I think how unfair that is to them, to be suspicious of them just because of what they do for a living. How do you deal with that clouding of business and friendship?

David:
So the way that I deal with that is to be totally up front at every point along the way. On the front end, before this person has ever bought anything from me, the first time I call them, I announce, "I have a business question for you." And then we talk about it, and they either say yes or no, and either answer is great. If a friend of mine becomes a client, and I am seeing them and interacting with them just in life and as we go along the way, and everything's normal and cool, but then when I make my annual or every two-year phone call, when I call at that time and they answer, first words out of my mouth, "Hey, this is a phone call from your life insurance agent." And they say, "Okay." And then everything comes down, everybody's focused, and they know exactly why I'm calling.

Dan:
I mean, when you're meeting new people, do you have to put them in a lane like potential client or potential friend?

David:
No, I don't think that that is correct. I hope that it's true that I interact with people and enjoy people simply for their own sake. If that's not true of me, I would be sad to learn that, but I hope that that's true. However, after I get to know somebody, I think it's just perfectly reasonable and normal to, at some point along the way, approach them and say, "Hey, I have a business question for you. I don't know if you know what I do, but I'm third generation in the life insurance business." And then on through my... And if I meet somebody and they ask, "What do you do for a living?" That is my standard response. “I'm third generation in the life insurance business.” I like to throw in the third generation. I hope that that puts people at ease so that they know, "Hey, don't worry. This is a well-established thing. It's not dependent on whether or not you happen to buy anything from me."

Dan:
Oh, I see what you're getting, yeah.

David:
And it's obviously very rare for someone to respond to that and say, "Oh, well, cool. Actually, that was on my mind, and I'd like to talk to you about that." But from a professional standpoint, I do like getting that out there. Yep.

Dan:
So, David, we always have a lightning round of questions on our show. I've got a couple of questions to pepper you with here. What is a word or phrase that only somebody from your profession would be likely to know,

David:
Feed list.

Dan:
And what does it mean? Feed list.

David:
What that means is, let's say you had bought something from me, and my desire was to be introduced to others around you who you know. One way of doing that is to try to get you to think of people who you know. We'd call that extraction. The other is for me to put together a list of people who I think you know and present that to you and get your thoughts on it. I'd call that a feed list. I gave a speech a couple of years ago entitled, "How I Got 115 Referrals Over Thanksgiving Dinner."

Dan:
That's a great hook for a speech.

David:
My brother Craig runs a very well-known, very successful branding and design firm in Atlanta. He knows everyone, and that is reflected in his LinkedIn connections. His LinkedIn connections are endless. Several years ago, on the Tuesday of Thanksgiving week, I spent an afternoon just on my own going through his LinkedIn connections and making a list of the people who I thought he might know, who I thought I would like to get to know. That list came out to probably 700 names. It typed out to 10 or 12 pages. I put that together and put it in my car.

Dan:
You're like, brother, would you mind introducing me to these 700 people?

David:
On Thanksgiving afternoon, he and I were doing the dishes, and we were wrapping up. As we were about to walk away, I said, "Hey, do you mind taking a look at something for me?" "No problem." I handed that to him. I said, "These are people who are connected to you on LinkedIn who I think I would like to meet. Would you mind going through this and circling the ones who you actually know, so that you would allow me to contact and reference the fact that you and I know each other?" He circled 115 names. We got to the end of that, and I said, "Okay, now I would like to get their contact information. What should we do?"

Dan:
Wow.

David:
He said, "Let's do this. Every day, until we're done, first thing in the morning, you text me the next three names on the list, and I will respond with how I know them and their contact info." That took a while. It took over a month, and a lot of good business came out of that. That's a feed list at its best. When somebody buys a life insurance policy and is paying monthly premiums,

Dan:
What phrase or sentence strikes fear in the heart of a life insurance salesperson?

David:
in most cases, the full first year's commission is paid to the agent up front on the assumption that the client will make all 12 of those payments. If the client leaves any time during the first year, we owe back a pro rata portion of the original comp that we received. I think that's the highest level of fear for somebody in our business, that you're going to have to pay back comp that you've already been paid.

Dan:
What is a sound specific to your profession that you're likely to hear?

David:
I don't know that I have a good answer related to the industry. I will tell you for me personally, my father is 81. He's not very active in the business anymore, but he and I still talk regularly. Anytime something really good happens, I still call him and let him know what happened. His response to that is always very energetic, very proud. Those are really special things to me. I don't take for granted the fact that I have gotten to work closely with my dad for my entire adult life. I think that's wonderful.

Dan:
That's special. I mean, I don't think there's many people who could have handled working with their parents for that period of time.

David:
A great thing about the business is that since it is 100% commission, it's not like he was a boss in the classic sense where he was saying, "Here's what I have to have out of you." He was there to help drive me forward and has always been very excited to hear about anything good that's happening. One thing I just really appreciate about him, he and I really speak the same language as it relates to the business. We think the same things are important, we think the same things are dumb, we think the same things are funny. My wife actually said recently, "On the day when your dad is gone, he's irreplaceable in your life." Because of the way that he and I can talk about the business, I can't talk about the business with anybody else the same way that I can talk about it with him. I am very glad that he is still around for me to call and share great, fun things that have happened.

Dan:
David Johnson is a life insurance salesman.

After I talked with David I kept thinking about his Dad’s advice: Don’t leave on Friday before you have 10 calls booked for the next week. That advice seemed to be one of the keys that unlocked David’s success. But the more I thought about it, the more I changed my mind … that the real key here isn’t the methodology. It’s discipline.

The hard part of the equation is not the *knowledge* that 10 meetings per week is a good pace. The hard part is sitting there Thursday night and sweating it out until you get to 10. That’s discipline.

Discipline is an underrated force, isn’t it? And I wonder if this is the kind of thing that gets left out of career guidance for young people. We get so caught up with grades and skills inventories that we miss these more fundamental traits. Like, if you don’t have good hand-eye coordination, don’t go into archery. And if you don’t have good discipline, don’t go into life insurance sales. I’m sure discipline can be taught to some extent, but let’s not delude ourselves: David was making 200 cold calls per shift at age 16. He had the gift of discipline and he made it work for him.

Fighting to make new contacts, overcoming soft objections, dealing with failure, working the funnel, and trusting that all that work will keep the commission checks rolling in … folks, that’s what it’s like to be a life insurance salesman.

A shout out to recent reviewers on Apple Podcasts: Tag32 and KBIZZLE18! These names are so great. Also, a shout-out to David’s brother, Craig, who listens to the show and suggested we talk with David … Craig, you’re a really good brother.

This episode was produced by Matt Purdy. I’m Dan Heath. See you next time.