I work with a lot of business owners and managers, and I can tell you that the most successful ones all have at least four core characters in common.  Many of them possess other qualities as well, but these four “Secrets” as I call them are always at the center of their power and charisma.

As you read through them, ask yourself which ones you currently have, which ones you’d like to strengthen, or which ones you can develop.  Once you master them all, you will be able to lead any team and any company to greatness.

Here they are:

#1:  Unbounded Optimism.  Ask any great leader to describe the future, and they will always tell you it’s a wonderful place.  Leaders are extremely goal oriented, have clearly identified what it is they want and what they are willing to sacrifice to get there, and they radiate an optimistic glow because they already live there in their mind’s eye.

Because people want to feel good about themselves and their futures, they naturally gravitate to winners.  People want to work for and, in fact, work harder for people who are optimistic.  Plus, optimism is contagious.  A great leader can often turn an organization full of negativity around, and the excitement they inspire can result in greater morale and greater results.

If you’re in a position of authority, ask yourself if you’d want others to catch your attitude.  If not, then focus on ways to become optimistic – you’ll be a much more effective leader when you are.

#2:  Rock Solid Confidence.  Great leaders are convinced they can do anything they set their minds to.  I love a saying of Napoleon Bonaparte’s : “The improbable we’ll do at once.  The impossible will take a little longer.”  A leader’s attitude is: Whatever the challenge, we’ll find a way to overcome it.

Confident also leaders create confident followers, and a company, family, or team with an “I Can” attitude is unstoppable.  The confidence of a great leader always inspires the best performance of his/her employees, and their team’s success just adds to and confirms the leader’s confidence.

#3:  Integrity.  In a recent survey about what qualities employees wanted from the managers and business owners they worked for, integrity was the most desired trait people picked.  Integrity, including honesty, fairness and consistency of attitude and action, are traits that build confidence in a leader and that build loyalty in the people who report to them.

Leaders with integrity genuinely care about the company they are building or the job they are doing, and this helps everybody feel as if their work has meaning and makes a difference in people’s lives.  Most people spend a third of their lives at their jobs, and while we go to work for a pay check it’s the intrinsic satisfaction someone gets from their work that allows them to feel fulfilled.  Leaders with a high degree of integrity help foster this feeling by setting the example.

#4:  Decisiveness:  All great leaders are decisive and committed to the actions they take.  This doesn’t mean they act capriciously, on the contrary, they fully weigh out and think through their options, but the key characteristic is that they aren’t afraid to make a decision and implement a plan of action.

Most employees tell many tales of bosses who are afraid of making a decision, or who frequently go back on them, and this habit of hesitation undermines their authority and the confidence of everyone in the organization.  Leaders, on the other hand, may not always make the right decision, but they can be counted on to make a well thought out one, and then to take action on it.   If facts change or results warrant it, they are flexible enough to reevaluate and make another decision.

If you’re in a leadership role, don’t shy away from decisions.  Evaluate the data at the time and the relative need of making a decision and then choose the best course of action and commit.  Making a decision – even if it’s the wrong decision – is better than making no decision at all.

If you are in a position of authority and wish to become an effective leader, then find ways of developing or strengthening these four characteristics in yourself.  Remember, everyone is counting on you for guidance, and it is your ability to lead that will determine the ultimate result in your team or company.

During the past year I have become very concerned as I realized that John has been struggling to stay afloat in his business. He has slowly admitted that several of his biggest clients have gone out of business in the last 18 months. Several other large clients have been slow to pay their bills. And the worst is still to come, as one of his major accounts is on the verge of becoming insolvent.

So, at our last meeting over a wonderful breakfast, we put our heads together to come up with some ideas on how to increase the value of his business.

It was evident to both of us that John’s business needs a serious shot of ‘increased revenue’ right now. There are only four ways I know of to cut through everything else and get that ‘shot’…

1. Get more customers or clients
2. Get your customers to spend more per purchase
3. Get your customers to spend money with you More frequently
4. Get your customers to stay with you longer (so they spend more lifetime dollars with you)

With that in mind, I offered my help, and we took up discussion to develop a logical, systematic action list to immediately increase his business revenue. John’s clients were all very typical of the 20/80 Pareto Principal. 80% of his revenue was being generated by 20% of his clients.  We decided to: 

• Ask his top 20% of clients for at least 1-2 referrals to others like themselves.  This could bring new high revenue – high payoff clients.  John decided to write notes by hand to these customers, a simple note card made from thick paper, a colored envelope and an interesting 1st class stamp so it stands out in the mailbox. “Thank you for your continual business. Would you do us the favor of recommending us to a friend? Someone just like you. We can help them with business solutions, and we’ll give them a discount if they bring in this card.”
• Focus on the 20% of his client “stable” that statistically generates 80% of his revenue, and give them superlative service.  This will likely produce other business opportunities for which John will be paid. He decided to pay attention to all the areas of the business where he could enhance the customer experience by doing something unexpected or surprising.  In addition to greater revenues it will definitely raise profitability if his customers are completely wowed by their experience.
• Review the 80% of the clients that according to the Pareto Principal only account for 20% of the revenue and either:
  • Increase billing rates to them … thus either generating more revenue or “encouraging” unprofitable accounts to go elsewhere. This is one of the fastest ways to guarantee an immediate increase in income, yet John was most resistant to this idea. We decided on a campaign to raise prices on select products and services only. By restating and demonstrating the value of certain products, John was able to ask a higher price that his clients were willing to pay.
  • Sell them to another firm. John did have friendly relationships with a few competitors who would be a better fit for this group of clients and would be willing to pay to acquire them.
  • Turn them over to a junior firm and share in the revenue generated. John also mentored some smaller firms who might be in a position to service these clients and John could at least share revenue.

Each of these actions would result in fewer clients for John’s business. However, by reducing the number of low revenue-producing clients, he would have more time available to provide better service to those clients who do generate significant income.

With John’s action list in place, we ended our meeting with a much more confidant outlook on the future of the business. We agreed to talk again in 60 days to review the impact of his actions on revenue. We also agreed to discuss ideas on how to increase the ‘Total Enterprise Value’ (TEV) of his business for future sale. Increasing this value could add 1.5M to 2M dollars more to the price John could get when he sells his business in the near future. Stay tuned for an overview of TEV and strategies to increase this value!

I know John is not alone these days in his concerns about his business value. If you want to discuss some creative ideas for increasing your business revenue or your Total Enterprise Value, contact R.J. Kelly. There are strategies that will make a significant difference in the business value even for the most stable businesses.

Imagine That!

In our Referral Advantage Program™, Step #7 deals with how to maximize the connection between your referral source and the new prospect.  Unfortunately, too many advisors settle for what we call suggestions.  With a suggestion, your referral source (client or center of influence) has given a referral (hopefully more than one), contact information, and some information about your new prospect. But with a suggestion, your referral source makes no effort to communicate with the prospect before you do. Some call this a “referred lead.”

When trying to reach affluent clients referred leads aren’t usually not enough to capture the attention of the prospect and earn the right to speak with them. You usually need to get introduced. We teach two levels of introduction. Level 1 is where your client makes some contact with the prospect, to either let them know that you’ll be calling, or to get permission from them for you to call.

Level I Introduction

The Level I introduction is usually the minimum of what it takes to catch the attention of the affluent. This is where the referral source mentions you to their friend, colleague or family member and encourages them to contact you.  This will usually only work if there is a very strong relationship of trust between the referral source and the prospect.  The stronger the relationship, the easier it will be to gain your new prospects attention.

Level II Introduction

The Level II introduction is much more effective, because the referral source has spoken to the prospect and gained permission for you to call or email the prospect. It’s important to discuss what the nominator says to the prospect – to pique the prospect’s interest. Also, always set a time frame for this to happen so you can follow up to make sure it does.

Level III Introduction

A Level III introduction is a face-to-face introduction. Nothing can beat the power of being introduced to a new prospect over a lunch, round of golf, or other social setting. In this case, you build rapport (and maybe even a bit of trust) with the new prospect and you earn the right to call them later and ask for an appointment.  If your client and prospect play golf, pick up the greens fees and they’ll follow you anywhere. If you want more time with them, play a public course (golf humor).

 Getting Introduced

So, how do you get an introduction? Simple. Just ask. Seriously, whether you ask a client for a referral or it’s volunteered to you, you want to learn as much as you can about the prospect. Then, you say to your client, “How would you like to introduce me to George? What’s the best way for us to get connected?” When a client thinks of someone you might be able to help, you want to get their collaboration in making sure you get connected.

Of course, you can always suggest a method of connection. “Bob, why don’t I take you and George to lunch at the club and you can introduce us in person.”  OR  “Bob, why don’t I take you and George out for a round of golf. What do you think?” Since your client has already thought of someone they want to help with the work you do, suggesting this kind of introduction is a logical next step. The worse thing they can say is, “That’s okay. Just call him. Mention my name and he’ll take your call.”

Get Introduced with Email

Many financial professionals are getting introduced to affluent prospects via email. It’s a very efficient way to get introduced. It’s simple for your client to do, and effective for you. Your client sends the email to their friend and copies you. You know the email has been sent and you follow up with your own email requesting a quick phone call in the coming days.

What would such an email sound like? Here’s an example:  “George, I wanted you to know about this financial guy I’ve been working with recently. His name is Bill Cates. He’s a really sharp financial advisor. He’s shown me stuff my last guy didn’t even know about. I’ve taken the liberty of giving him your contact information. Do yourself a favor. Spend 5 minutes with him on the phone. He’s very low key, so if you’re not interested, he won’t pester you. If you’re looking for a fresh look at your investments and other financial planning stuff, he’s the guy.  By the way, when are we going to have that lunch you owe me?  George.”

Of course, your clients will write their email introductions in their own style. Some reps I work with have created 2-3 templates they email to their clients to help them formulate their own. Not a bad idea.

If you want to meet more affluent clients, you have to be introduced. Make the commitment to building a referral-based business and then get introduced to your new prospects.

Free Report for Producer’s eSource Readers

Bill Cates is offering our readers a free report with excerpts from his new book. The report is called Going Beyond Referrals and provides four great strategies that will help you get more referrals, more introductions, set more appointments, and convert more clients. Simple go to www.GoingBeyondReferrals.com.

Two Reasons:

1. Clients Hate Rejection!—When a client that loves us refers us to a friend by saying something like, “Hey, you should talk to my advisor!  He’s done a really good job helping me with my retirement.”

What does their friend say?  “I’ve already got an advisor… maybe you should talk to him.”

REJECTION!  Clients don’t like rejection… so when do you think they are going to try and refer to you again?

Never.

1. Clients Don’t Want to Presume—What about the referral techniques that help you collect lists of possible prospects from your clients?  Whether it is from their address book, club, job or whatever.  How does that work?  Well, as soon as they give you the names and you walk out the door… what does your client do?  They call the people on the list they just gave you and warn them that you’ll be calling with something like:

“Sally, I just thought I should call to warn you… I don’t know what got into me but I just gave my advisor your name and I just wanted to let you know that you don’t have to work with him.  I don’t know what I was thinking when I gave him your name, I’m really sorry about that.  When he calls just tell him that you aren’t interested.  I mean he’s done a good job for me but I’m sure you already have someone that you work with so just tell him that.  Again, I’m sorry to put you in this position!”

AWESOME REFERRAL, RIGHT?

Not.  Tell me this isn’t what’s happening.  Because if it isn’t, then why aren’t we all swimming in referrals?

So How Do We Get Referrals that Grow and Stick?

If you want somebody to do something, such as give us a referral… you have to make it a pleasurable experience.  So what makes people feel good?  Do people like having something that nobody else has?  Do they like knowing things that nobody else knows?  Do they like for their friends and family to look up to them?

Yes on all accounts!

So what you have to do is to give them a “tool” that will allow them to demonstrate that they have and know something that their friends and family don’t have or know.  And then you have to make it easy for your clients to communicate that knowledge to their friends and family… it will have their friends and family looking up to them!

When you put your clients in this position… you’ll have more referrals than you’ll know what to do with!  Let me give you a real life example of how well it works when you give your clients a great “referral tool.”

Referral Tool at Work

Several years ago I was working with an agent whose target market was teachers.  He was an expert on teacher’s and their retirement benefits and had several happy teacher clients, but he couldn’t get them to refer.  So he asked me for help in getting these happy clients to refer. We came up with, a single sentence he could teach his clients to use.  A sentence that when his clients used it with a fellow teacher, showed their colleague that they knew and had something their colleague did not.

This made his teacher client feel good because their colleague now looked up to them.  Because of this change in his clients’ experience when they referred, he was soon seeing more clients than he had seen in years!

Here’s the little “Referral Tool” I created for him:

“You should talk to my advisor, he helps teachers in Bernalillo County increase their monthly income by an average of $441 a month using HB313, a loophole only available for 2 years.”

When his teacher client brought this up in the teacher’s lounge… guess what the next thing out their colleague’s mouth was?  “How do you do that?”

The teacher now felt good because they knew something their colleague did not and it made them feel like an authority.

If they had instead said, “He’s an expert on teacher’s 403(b)’s and retirement plans”… as they had been saying before we created the 5QES for him… guess what the teachers did?  They were totally disinterested and his clients gave up trying to refer.

The Referral Solution is Simple… Follow these 5 Easy Steps to Create a Sentence That Helps Your Client Create Interest Among Their Friends and Family

The 5Q Elevator Statement Formula

1. Is it something that only you can claim… or are claiming?  Is it something that none of your competitors are saying?
2. Is it brief and repeatable?  If it is not repeatable, it is worthless… the whole point here is to get this message circulating virally.  It should be one sentence long.
3. Does it address something that keeps your client up at night:
   • Greed
   • Fear
   • Frustration
4. Is it extremely specific? Specificity creates trust.  Is it something that your prospects feel they could check out for accuracy if they wanted to (I’ve never heard of a prospect going to the length of checking out a claim… they believe that you wouldn’t claim something they could check out, unless it was true.)
5. The “because” of the solution
   • What exactly are you using or do you know that creates this perfect solution?

And here’s the test:  Is it something that gets them to say, “Tell me more… how do you do that?”  Test this out.  Actually, start using it.   If people are asking you for more information without any further prompting… You’ve hit the jackpot.

Almost every agent, advisor and planner we talk to is unhappy with the amount of qualified life insurance prospects they see in a month. And, it’s no wonder they are struggling with prospecting, when you look at how they prospect! Most of them are looking for anyone and everyone who fogs a mirror. They want to believe that the more products and services they offer, the more people they will attract. They have never considered with whom they have the best chance of setting an appointment! And, with whom they have the best chance of closing a sale.

The agents, advisors and planners that are succeeding are marketing to a specific, targeted group of people. Their marketing message is focused on solving a unique problem for that target market. That way, they are attracting their perfect prospects. The people they have their best chance of setting an appointment with and closing a sale.

To succeed in life insurance sales you must have a specialized message to attract the people in your target market. You can’t just say, “We are a local insurance agency, offering a full line of insurance products.” So what?

If you tell me that you offer the same life insurance products I can get anywhere for the same low price they can find elsewhere, that is not a good answer. If you make vague promises about great customer service, that won’t cut it either!

As an example, one of the quickest and best ways to attract the perfect prospects to you is to offer mortgage insurance, and use it as a door opener. Your specialized message might be…

“I show people how to protect their family and pay off their mortgage 5 to 15 years early without them spending any additional money or changing their current life style”

Now Start Attracting The Perfect Prospects To You Every Month!

Once you have determined your marketing message, and who your ideal prospect is, then it’s easy to attract a consistent stream of the perfect prospects!

1. Send out a monthly newsletter to all your family, friends, customers, prospects and everyone you know to let them know about your specialty. And, let them know about your upcoming free workshop! (Not about products or investments)
2. Ask all your family, friends, customers, prospects and everyone you know for their help! Once they know what you do and how you help people… Ask them who you should be sending your newsletter to, and inviting to your upcoming free educational workshop!
3. Offer a free educational workshop on… ‘Paying Off your Mortgage 5 to 15 Years Early!’ You are now solving a unique problem for a specific group of people! And, you can do it for under $100!
4. Form a Joint Venture with local businesses that caters to your ideal prospect, such as Mortgage Brokers, P&C Agencies, Real Estate Attorneys, and Real Estate Agents. Get them to introduce you to their best customers. And, then invite their best customers to your free educational workshop, or offer a free consultation!
5. Write articles for your local newspapers, church bulletins, local associations and any organization that caters to your specialized market. Help everyone in your local area to get to know you and the services you offer. (Not about products or investments)
6. Offer a free information report (free booklet) in all your ads, invitations, newsletters and correspondence! The people who ask for your free information are telling you that they have an interest and they want to know more!
7. Join or Create a Networking Group! Make sure the group has successful people who are really interested in growing their business. Exchange leads, and explain what you do to really help people!

Note: Dinner Seminars, Direct Mail Programs, Pre-set Appointments, Internet Leads, Newspaper Ads and Fax-Blasting are extremely expensive and should only be used as a last resort! There are several major problems with these types of leads. These people have never heard of you. You have no credibility with them. You have no control over who you are seeing. You have no idea if the people who respond really have a need, or if they have a problem that you can solve for them.

Attracting 50 people to you each and every month doesn’t have to be hard or frustrating, if you focus on getting your unique message out to the ‘Right’ people! The people with whom you have the best chance of setting an appointment and have the best chance of closing a sale!

Are you ready to take the first step to discovering the proven, life insurance marketing methods and strategies needed to “Recession Proof” your business, and take your profits to superior levels?

Then, you must take a few minutes right now to download this ‘FREE’ Detailed 31 Page Report!

So how do you identify who the Top 20% are BEFORE you spend all that time and money on hiring, training and then hoping they perform?  There are many ways to try to identify the characteristics in advance, and in fact a whole industry of profiling and assessment testing has sprouted up to help you make the right choice.  I have used some of these tests and have found them to be quite accurate and valuable.

I have also found an easier way to identify who the potential top producers are, and I’ve boiled it down into three “Real Secrets.”  If you are responsible for identifying and hiring sales reps in your company, then I recommend you use these techniques to help you find the right sales reps before you spend all that time and energy training, managing and hoping you’ve made the right choice.

Real Secret #1) The best predictor of future behavior and performance is past behavior and performance.   This is a well known fact in psychology, and it’s one you can use to predict how a new sales rep is likely to perform for you.  The bottom line is that however much your candidate earned in income in their last job, and the job before that, is mostly likely the amount they are going to earn working for you as well.

What you must determine is exactly how much money that was.  Ask your candidate to provide you with pay stubs or verification of income for the last 6 months, and, in addition, ask them what they earned in income each of the last three years.  Find a way to verify this.

Finally, determine how much of your product or service your candidate would have to sell to generate that kind of income again, and ask yourself if you would be happy with that level of performance – because that’s most likely what you’re going to get.

Real Secret #2) Determine what is really motivating your candidate.   What we exposed in the first real secret was your candidate’s comfort zone.  We all have comfort zones, and sales reps in particular will always live up to – and most likely down to – their comfort zone especially in terms of income.

So if your candidate is really looking to your company and opportunity to better themselves and earn more money, find out what is driving this need and desire for more money.  Have their life circumstances changed?  For example, have they recently gotten married, had a child, purchased a home?  If so, then they may have a real motivation to work harder, make more money and enlarge their comfort zone.

If their situation hasn’t changed, then you can be pretty sure that they will not be motivated to work harder, learn more skills, and make more sales.  In essence, they will continue to live down to their current comfort level and you may once again be hiring another 80% producer.

Real Secret #3) Access their sales skills and previous training.  This is one of my favorites.  During the interview, I ask my candidates how they think they would do selling my product.  They all say, “I’d do great!”  I then do two things:

1)    I ask them to sell me on the product.  What I’m looking for is for them to ask me qualifying questions rather than just start pitching.  Those who just dive right in and start pitching reveal themselves as middle to low 80% producers.  Top 20% producers, on the other hand, start asking me questions and gathering information.  They are the ones I’m interested in.

2)    Next I give them a couple of objections and watch and listen to how they handle them.  You can immediately tell how much training someone has had, and how successful they were, by listening to them handle age old objections like “The price is too high,” and “I’ll have to talk to someone else first.”

These techniques have saved me hundreds of hours of poor hires, and they have often revealed who the real top producers were.  Use them, and you’ll love how they will work for you as well.

A recent study found that nearly 17 million consumers were accessing health information on mobile devices in 2011,[i] representing a 125 percent increase from 2010. Experts predict that healthcare and medical app downloads will reach 142 million by 2016.[ii]

Smartphone technology as an integral feature of a health plan can help clients curb healthcare costs, enable plan members to gain the greatest possible benefit from the healthcare services available to them — and give brokers a competitive advantage.

Consider these 10 key advantages that smartphone technology offers:

1. Patients can use the convenience of their smartphones to research prices, refill prescriptions,   check order status and find the nearest pharmacy – all of which helps them remain compliant to their pharmacy regimen, improves health, increases productivity and, ultimately, improves the employer’s bottom line.
2. Remote health monitoring apps simplify the management of chronic diseases, while presenting a new and effective means for reducing the cost burden of unhealthy lifestyles and aging populations.
3. Health apps give plan members easy access to a wealth of essential medical and pharmacy benefit–related information, including:
• In-network provider directories
• Directions to physicians’ offices
• Claims history
• Eligibility and cost-sharing requirements
• Drug prices of nearby pharmacies and expected out-of-pocket costs with generic and therapeutic alternatives
• Self-diagnosis tools with symptom and disease lookup features
• Daily wellness tracking tools for achieving health-related goals
• Specific details regarding a health-related condition
• Reminders and alerts for prescription drug compliance
• Options for in-home monitoring and in-home care
4. By leveraging this instant access to health information, employees have a tool that can encourage them to consider self-care and wellness programs, which could lower the employer’s healthcare coverage rates and improve workforce health and productivity.
5. Mobile technology service providers can help employers and health plans devise a thoughtful and engaging mobile-access and mobile-platform technology strategy, and deploy Web-based platforms – not just apps – that automate the labor-intensive processes of gathering, integrating and accessing drug claim histories and formulary data.
6. Mobile technology platforms can drive personal notifications to members regarding drugs that require prior authorization, personalized messaging to increase the effectiveness of consumer engagement communications, and Web-based reporting applications that measure changes in pharmacy utilization and prescription drug adherence for chronically ill patient populations.
7. Mobile apps simplify pharmacy benefit design understanding and utilization, which can enhance the effectiveness of medication therapy management and value-based drug benefit designs.
8. Health apps help to streamline the flow of information between health plans, physicians and patients — facilitating one-on-one exchanges that close gaps in care, shorten medical response times, and improve the overall healthcare system.
9. Mobile apps function as an ideal PBM tool that can encourage adherence to medications for chronic health conditions, such as diabetes and asthma. Mobile communications help reduce both employer and employee costs by identifying preferred brands and generic drugs, and by enabling pharmacists to work collaboratively with members who are at risk for adverse drug events.
10. Once an effective mobile strategy is in place, health plan members can take greater control of their own health and work more closely with their in-network healthcare providers — this is especially true for those who are incentivized by the potential for saving money and reducing out-of-pocket healthcare costs.

With smartphone technology expertise, brokers hold in their hands the ability to improve the healthcare coverage experience and create efficiencies. Toward that end, it’s important to learn the market, ask critical questions and distill complicated information into a solution that best fits the needs of a given patient population.

Choosing the Best Mobile Strategy Partner

Designing an effective mobile strategy begins by partnering with a service provider that can offer Web-based platforms that automate labor-intensive processes, such as gathering, integrating and accessing drug claim histories and formulary data. These platforms should also have the capabilities of delivering:

• Personal notifications to members regarding drugs that require prior authorization
• Personalized messaging to increase the effectiveness of consumer engagement communications
• Web-based reporting applications that measure changes in pharmacy utilization and prescription drug adherence for chronically ill patient populations

Automated personal mobile application services – combined with reporting applications that measure the appropriate use and effectiveness of healthcare – will inevitably increase satisfaction for both the employer and plan member. They can also:

• Save time and money across the healthcare delivery system
• Simplify pharmacy benefit design understanding and utilization
• Enhance the effectiveness of medication therapy management and value-based drug benefit designs
• Integrate financial data from the increasingly popular consumer-directed/high-deductible health plans (CDHPs)

Smartphone apps and mobile technology systems are the ideal tools for self-insured employers to consider as they select TPAs, health plans, and PBMs to manage their employee healthcare.  Employers drive innovation as they are truly at risk for healthcare costs, so equipping their mobile workforces with mobile healthcare tools is the most effective path towards better health.

After this first purchase with this salesperson, I got to know her by stopping in to say “hi” and by referring many other shoppers. She returned the favor by suggesting that I contact the new management team who, as it turns out, were looking to provide corporate training for the whole chain. To get the ball rolling, I first sent a letter to the president and complimented her on her wonderful line of clothes, and mentioned that I had been a collector for years. Two months later, I got a call inviting me in to make a presentation about my services, and to write a proposal. The rest became history over time.

My first client could be traced back to a conversation we had on a train ride. She was sitting across from me and pulled out a book I had just read. We began a conversation and before we knew it, two other people had joined in. As we got around to talking about what kind of work we did, it was time to get off the train. However, the woman I first met said, “I’m looking for someone to design a customer service program, so send me your material.” I did better than that. The next day I hand delivered the material and left it with her receptionist. She called that afternoon and we started working together six months later. She has since left that organization and we still have the opportunity years later to work on projects.

Keep in mind that it’s not that simple. There was a long waiting time. Actually, for both of the above experiences, it took almost a year to get from the first interaction to the closed sale. However, it¹s like walking through a garden and throwing out seeds; you know that they all may not bear fruit. However, if you don’t start with the seeds, there will be nothing to water, nurture, and eventually harvest. That¹s why we need to seek out potentially “bankable” places to network which is everywhere in life.

Recently I received an email from the daughter of the vice president of the bank where my  parents used in Florida and now I have an account for my condo there. I had been sending her mother my newsletter tip for several years and always stop by the bank to say hello. The banker put her daughter, who is a training director at a major restaurant chain, in touch with me. Now we’re in the process of discussing their training needs. Let’s face it – who can give you a better referral than someone¹s mother?

Once while visiting Sarasota, Florida, which is my part time residence, I was waiting in the checkout line and noticed the name badge on the woman helping me- which was “Training Director.” We started to chat,  and I complimented her and this specific chain for the exceptional service they provide and she  invited me to come to their training department the next time I was in the store. I immediately followed up by sending her a handwritten note and put her on my ezine distribution list. I also mailed a letter to the corporate office of her store, expressing how very nice she was and how she went the extra mile to make my experience a pleasant one. Will I get an assignment from them? I do not know. However, I have a new “contact” that I can get to know over time.

Here are a few techniques to help you serendipitously network more effectively and to keep a 24/7 mindset of awareness of all the possible opportunities that can develop over time, patience and follow up.

1. Give a new contact a sincere compliment, such as, “You seem to enjoy your work and enjoy making people feel welcomed.”
2. Show a genuine interest in the person. Simply ask questions to learn more about him or her as a person and of course with sincerity. Really listen and learn.
3. Follow up immediately. When a new networking contact leads to writing a proposal, get the person the information as soon as possible. Do the follow-up based on the person’s directions. Always include something extra that your competition may not provide. I call it “WIT” – Whatever it Takes.
4. Remember to thank anyone who refers you to someone. The contact might have come from a party, a wedding, a business function, or from your health club. Keep the person who invited you “in the loop” and let him or her know about what’s happening. Chances are he or she will speak to your “new contact” and have the opportunity to put in a good word for you. It takes no time and is always remembered.
5. “The Wizard of Oz” principle. Remember what the good witch tells Dorothy at the end of the movie, that “you always had the ability to go home.” Now, think back to your current client list. How did you get each assignment you’re working on? Chances are, if you think back, those clients were either referrals or relationships you developed that started off as nothing.

Get out your note cards today and send out “thank you” notes to those you work with and those who referred you to clients. It¹s guaranteed to make you, and, more importantly, your contacts feel better. Whether a handwritten note or an email or even a phone call- do it and make someone’s day special.

Finally, who says going to a dentist has to be a painful experience? Once I went to my dentist¹s office to have some work done. A short while back I had provided customer service training for his staff, and of course, I had been referring patients to him. My dentist left the room while I was waiting for the Novocain to settle in. Suddenly, he ran in to tell me something urgent. He said, “You have to meet my patient in the next room. Her company needs someone like you!” Of course, I arranged a follow-up meeting when we could both speak clearly and without pain! The real coincidence is that she just happened to come in to the office for an emergency because, as she was traveling, her tooth broke. We can’t predict life!!

Networking is life and often the opportunities are right in front of us.

1) Mandatory Auto-Enrollment IRAs for Certain Small Businesses

The Proposal – Employers in business for at least two years that have more than 10 employees would be required to offer auto-enrollment IRAs to their employees. Contributions to employees’ IRAs would be made on a payroll-deduction basis. Employees would be able to elect how much of their salary they wish to contribute to their IRA (up to the annual IRA contribution limit), including opting out entirely. In absence of any election, 3% of an employee’s salary would be contributed to their IRA.

The Reason – For nearly 15 years, Congress, along with the Treasury Department and IRS, have been taking steps to increase Americans’ retirement savings contributions by making it easier for employers to establish auto-enrollment in company plans. However, many small businesses choose not to adopt a retirement plan due to the potential costs and/or compliance burden. Many small employers also do not take low-cost steps to make retirement savings easier for employees, such as through the adoption of payroll-deduction IRAs.

The Good – It’s no secret that our country is in the midst of a retirement savings crisis. Too few Americans actively save for retirement, and even fewer save appropriate amounts. Although there is some debate as to how effective this proposal would be in reducing the gap between what people are saving and what people should save for retirement, numerous studies have shown that auto-enrollment tends to increase participation in retirement savings. The proposal also contains a number of credits small businesses could claim for helping to facilitate employees’ retirement savings.

The Bad – Many small businesses are already overburdened with various compliance requirements and any new rules or regulations could be unwelcomed by small business owners.

2) Mandatory 5-Year Rule for Non-spouse Beneficiaries

The Proposal – IRA (and other retirement account) beneficiaries would be required to empty inherited retirement accounts by the end of the fifth year after the year of the IRA owner’s death.

The Reason – The “Green Book”, released by the Treasury Department to explain the proposals in the President’s budget(including the reasons for making such proposals) said the reason for this provision is that “The Internal Revenue Code gives tax preferences for retirement savings accounts primarily to provide retirement security for individuals and their spouses. The preferences were not created with the intent of providing tax preferences to the non-spouse heirs of individuals.”

The Good – Right now, the required minimum distribution rules for non-spouse beneficiaries can be somewhat complex. Requiring all non-spouse beneficiaries to withdraw inherited retirement account funds within five years would simplify the rules, for both clients and advisors. Plus, the proposal exempts certain beneficiaries, such as disabled beneficiaries and minor children.

The Bad – If this proposal should come to pass, it would be the death of the stretch IRA. Non-spouse beneficiaries would face more severe tax consequences upon inheriting retirement accounts and as such, the value of these accounts as potential estate planning vehicles would be diminished.

3) Establish a “Cap” on Retirement Savings Prohibiting Additional Contributions

The Proposal – New contributions to tax favored retirement accounts, such as IRAs and 401(k)s, would be prohibited once clients exceeded an established “cap.” This cap would be determined by calculating the lump-sum payment that would be required to produce a joint and 100% survivor annuity of $205,000 beginning when clients reached age 62. At the present time, this formula produces a cap of $3.4 million. Clients with cumulative retirement accounts in excess of this amount would be prohibited from contributing new dollars to retirement accounts on a tax-favored basis (but accounts could still grow as a result of earnings). The cap would be increased for inflation.

The Reason – Per the Green Book, “The current law limitations on retirement contributions and benefits for each plan in which a taxpayer may participate do not adequately limit the extent to which a taxpayer can accumulate amounts in a tax-favored arrangement through the use of multiple plans. Such accumulations can be considerably in excess of amounts needed to fund reasonable levels of consumption in retirement…”

The Good – It’s hard to find much good in this proposal for clients. Perhaps the only good news is that at $3.4 million, this provision would impact only a very small percentage of retirement savers. But even here, if interest rates increase (which is likely, since they can’t go much lower), then the cap could go much lower since annuities paying $205,000 would cost less. This would impact many more retirees.

The Bad – $205,000 is certainly nothing to scoff at. However, many clients will require significantly more annual income in retirement to maintain their desire standard of living, especially after you factor in taxes. Such clients will need to look for alternative ways to (legally) shelter assets from tax.

4) Create a 28% Maximum Benefit for Retirement Account Contributions

The Proposal – The maximum tax benefit (reduction) for making contributions to defined contribution retirement plans, such as IRAs and 401(k)s, would be limited to 28%. As a result, certain high income taxpayers making contributions to retirement accounts would not receive a full tax deduction for amounts contributed, deferred.

The Reason – Per the Green Book, “In particular, limiting the value of tax expenditures including itemized deductions, certain exclusions in income subject to tax, and certain deductions in the computation of AGI, would reduce the benefit that high-income taxpayers receive from those tax expenditures and help close the gap between the value of these tax expenditures for high-income Americans and the value for middle-class Americans.”

The Good –  From a client’s perspective, there is really nothing in this proposal that’s good. Perhaps some can be thankful that, unless they are in a federal income tax bracket higher than 28%, this provision would not increase their tax liabilities.

The Bad – High income clients would no longer be able to receive a true, full deduction for amounts contributed/deferred to a retirement account. For instance, currently if an individual with $500,000 of taxable income defers $10,000 into a 401(k), they will not pay any income tax on that $10,000. Without that salary deferral, that income would be taxed at 39.6% (currently the highest federal income tax rate). However, if this proposal were to become effective, that $10,000 would effectively be taxed at 11.6% (39.6%-28% = 11.6%), since the maximum tax benefit that a client could receive would be limited to 28%.That equates to an additional tax bill of more than $1,000.

5) Eliminate RMDs for Clients with $75,000 or Less in Retirement Accounts

The Proposal – Clients (seniors) with combined savings, across all retirement accounts, of $75,000 or less, would be exempt from required minimum distributions.

The Reason – Per the Green Book, “Under current law, however, millions of senior citizens with only modest tax-favored retirement benefits to fall back on during retirement also must calculate the annual amount of their minimum required distributions, even though they are highly unlikely to try to defer withdrawal and taxation of these benefits for estate planning purposes. In addition to simplifying tax compliance for these individuals, the proposal permits them greater flexibility in determining when and how rapidly to draw down their limited retirement savings.”

The Good –  The proposal would decrease the compliance burden and increase simplicity for those individuals with smaller retirement account balances (who tend to have smaller savings on the whole), who generally do not have access to the same level of financial expertise as those with larger account balances.

The Bad – It’s hard to find something to complain about for this one. Perhaps the only gripe some will have is that it further serves to divide “haves” and “have-nots.”

6) Allow Non-spouse Beneficiaries to Make 60-Day Rollovers of Inherited Assets

The Proposal – Non-spouse beneficiaries would be allowed to move inherited retirement savings from one inherited retirement account to another inherited retirement account via a 60-day rollover (in a manner similar to which they can currently move their own retirement savings).

The Reason – Per the Green Book, “These differences in rollover eligibility between surviving non-spouse beneficiaries and surviving spouse beneficiaries (and living participants) serve little purpose and generate confusion among plan and IRA administrators and beneficiaries..”

The Good –  Unifying the rollover rules for retirement account owners and beneficiaries would greatly simplify this aspect of retirement accounts and reduce the number of irrevocable and costly mistakes that are often made by beneficiaries under the current rules.

The Bad – Good luck finding the “bad” in this decision. How about that? A budget provision with virtually no downside…

1. Changes in RATES
   1. Higher premium for new applicants: I just completed a comparison of rates between March 2013 and August 2011. Single premium has increased from 9% to almost 14% and married premium from 3% to almost 13.5% with the largest increases being in the 40-70 age ranges.
   2. Look for rates to dramatically change this year with carriers like Genworth, Mutual of Omaha, John Hancock and Transamerica as they shift to gender rating. Single women need to buy NOW or face an additional premium of up to 60% in some situations. Married women with healthy spouses will see some offset from the male premium decreases.
   3. Couples discounts are being decreased from 30-40% to 20-25%, and preferred health discounts are decreasing from 10-15% to 5-10% or being deleted entirely as they have been for multi-life and association business with several carriers.
   4. The NAIC is continuing to pursue tighter rate stabilization regulations which will impact rates further, possibly in 2014 but more likely in 2015 due to the time it takes for the NAIC to issue a regulation and states to adopt it.
   5. Limited pay plans are almost a thing of the past. Country Financial still offers paid up at age 65 and ten pay, as well as MedAmerica and LifeSecure, both subsidiaries of Blue Cross Blue Shield plans.
2. Changes in UNDERWRITING
   1. Family history questions are coming into play with carriers like Genworth and John Hancock. If both parents had Alzheimer’s, for example, a face-to-face will likely be ordered, regardless of the age of the applicant.
   2. Genworth is kicking off a requirement for body fluids, ostensibly to look for cardiovascular issues, one of the top reasons for LTCI claims. However, the 2008 Anti-Genetic Discrimination Act does not apply to LTC insurance, which opens the door in my mind to genetic testing at some point. Alzheimer’s genes, anyone?
   3. Underwriting is tighter all around as carriers have accumulated credible claims experience. Diabetes and stroke are particularly tricky to insure, especially if combined with weight issues. About 1 in 3 is declined at age 60 and more like 1 in 2 after age 75. Message: Apply younger, and worksite gives you easy access to younger prospects, IF and only if you have a cooperative employer. Otherwise, don’t bother.
3. Changes in INFLATION COVERAGE
   1. The all-time favorite of 5% compound for life has become almost unaffordable with newer products, so take advantage of the short window with carriers that haven’t repriced their product recently. Think about it from the carrier’s perspective. People are living longer than expected, and lapse rates and interest rates are lower than expected. Carriers with multiple inflation options are desirable, such as 5% compound 2X, 3X or 4X or for 20 years, or 4.5% or 4%. If you go as low as 3%, bump up the daily or monthly benefit. Otherwise in 30 years, the benefits will be barely over half of what they would be with 5% compound.
   2. Ask the carriers which inflation options are Partnership approved in your state.
4. Changes in BENEFIT COLLECTION
   1. Claims are paid one of three ways: reimbursement (most policies), indemnity or cash. Don’t confuse indemnity with cash. Indemnity means you get the entire daily or monthly benefit regardless of the charge, but you still have to file claims with proof of qualified services. Cash means you just provide a monthly statement of continued benefit eligibility with no itemization of services because you can do whatever you want with the money. Mutual of Omaha/United of Omaha, LifeSecure, MedAmerica and Transamerica have partial cash plans and MedAmerica has an all cash plan as well.
5. Changes in COVERAGE OPTIONS
   1. Most plans are comprehensive which means they pay for all care locations: home, adult day care, assisted living or nursing facility, and most pay for hospice. Single people may find a facility-only plan more practical as it pays for assisted living as well as nursing facility care. People with older policies may want a community-only plan to supplement an existing policy, especially if the community-only plan has a cash feature. MedAmerica offers both non-comprehensive options and Country Financial offers facility-only.
   2. The unlimited benefit period is almost gone with the exception of Country Financial. The Society of Actuaries LTCI Experience report shows that about 85% are fully paid in less than four years, so most people don’t need the ultra-long benefit period. However, the study shows that about 10% need care longer than five years. Some prospects are simply not comfortable with a short benefit period, especially those who have cared for family members with long periods of chronic illness. Shared care really helps this situation when longer benefit periods are unaffordable. The Long-Term Care Partnership is the true hero as it creates a safety net with asset protection when insurance isn’t enough. Caution: Don’t skimp on inflation coverage to afford a longer benefit period. If the insured can’t make up the difference at claim time between the benefit and the charge, he or she may have to apply for Medicaid sooner and the Partnership may not help all that much since it protects assets equal to benefits paid out.
6. Changes in WORKSITE OPTIONS
   1. LifeSecure, MedAmerica and Transamerica are the only multi-life carriers and Genworth is the only true group carrier. Let’s reward these companies for hanging in this space, as I believe employers need to lead, not follow, in offering LTCI. Why? Because employees are younger and they and their eligible family members are more likely to qualify medically. Plus, these carriers also offer simplified underwriting to employees and spouses. Finally, it’s a heck of a lot easier to sell an average premium of $99 a month than almost $225 in the individual market!
   2. Don’t forget to explain to the employer that LTCI is Productivity Insurance as it can be the only thing that keeps an employee on the job if a spouse or parent has a serious accident or stroke or develops dementia.
7. Changes in our STATE AND NATIONAL ECONOMY
   1. Medicaid makes up almost one-fourth of state budgets and long-term care makes up about a third of Medicaid. Due to pressure from 80 million baby boomers hurdling toward their long-term care years and Medicaid expansion to childless adults with incomes less than 138% of poverty level in most states, states are cutting other services, primarily education, in order to accommodate the burgeoning Medicaid budget.
   2. Americans need to understand that planning for long-term care is not a personal decision. Those who do not plan are potentially taking dollars out of their state budget via Medicaid that could have gone to educate their children or grandchildren or to hire more public safety officers, or fund mass transportation or create new jobs….get the picture? I call this the Real Choice campaign. You may download a free brochure here that communicates this idea to everyone you know. People don’t change until they have a personal reason to do so, so give them all these reasons.

In my next article, I will share with you my ELEVATOR SPEECH, then roll right into how to explain the true cost of waiting to buy long-term care insurance so that people buy YOUNGER.