Selling: Building Partnerships, Case Study 6.1
A few years back, I was a Federated Insurance salesperson and had a large Redi- Mix Concrete contractor I was quoting. This was the second time I had quoted this account, and I had built a good relationship there. My price was $159,000 for their property and casualty insurance. I knew they paid only $150,000 the year before, but I had uncovered many coverage disadvantages and issues in their current program. I had a really great shot at selling this account. The commission rate on P&C is about 15 percent, so I would make about $23,000 if I made the sale. The buyer said that I was to stop by on Friday morning and that his current agent was coming later that afternoon with a quote. The insurance expiration day was that Saturday.
I gave my proposal, and it went very well. I gave the buyer a list of 10 things to ask the other agent in which I had coverage advantages. The buyer said he wanted to do business with me, but because his current agent was already coming in that afternoon, he felt like he should see what she had to offer and go through the issues I had pointed out.
I left and set an appointment for first thing Monday morning. On Monday at 8:00, I was there, and the owner said that I had earned the business! I was pumped! He pulled out his checkbook and gave me a check for $15,900 as a down payment. I called my underwriter to tell him the great news, and he said, “Awesome!” He asked, “When is it effective?” I said, “As of last Saturday.” He said to have them sign a form saying they had not had any claims since Saturday.
I asked the owner, and he said he didn’t have any claims. Then he said, “Oh, I forgot, Joe hit a deer on the way home from a job on Saturday in the com- pany truck. It wasn’t bad, though, about $1,200 in damages we are guessing. Joe wasn’t hurt or anything.”
I was devastated! What were my options? I could call the underwriter and tell him about the claim, knowing that he most likely would tell me to give the check back and that I could not bind an account that already had a claim pending. And I’d lose $23,000 in commission. Or I could tell the owner not to worry about it, know- ing that Federated would pay the claim if I pretended I didn’t know about the acci- dent and bind the account. Or I could tell the owner that I would pay for the $1,200 claim out of my pocket because I would earn a hefty $23,000 commission check.
1. What should the salesperson do?
2. How should the salesperson communicate that decision to his customer? To his own company, Federated