6 Reasons New Independent Insurance Agents Fail

Starting a new career can be intimidating, but when you’re starting out as an independent insurance agent, you face an entirely different set of roadblocks.

Because of this, a lot of agents who are just starting out don’t have a very high success rate. Over the years, we’ve seen brand new agents give up more quickly than expected. In fact, if we had to put a number on it, we’d estimate that for every 10 agents who enter the business, only 1 sticks with it.

Why is this? Why do new independent insurance agents fail so often?

1. You’re starting from scratch

Unless you have the money to buy a book of business – or your family is in the business and they can help you get started – you’re quite literally entering the business with zero customers.

You have a completely blank slate, which can be liberating, but it can also be very, very frustrating.

Not only do new agents need to become experts on the products they sell, but they also need to have a firm understanding of marketing and lead generation.

After all, what good is it to know all about Medicare if you don’t have anyone to help?

The truth is that it’s not always hard to find prospects – there are a ton of people turning 65 and a ton of people over age 65. But finding people who aren’t really guarded can be tough.

New agents will often start out with the tried and true method of door knocking. This gives new agents experience in front of clients, and it’s one way to get your foot in the door (pun intended).

[RELATED: The Ultimate Guide to Door Knocking for Independent Insurance Agents]

However, with door knocking comes very real challenges.

  • No one’s home
  • Weather restraints
  • Lack of conviction at the door
  • Car troubles
  • Inability to create small talk and banter

[RELATED: How to Make Small Talk: A Businessman’s Guide to Talking with Strangers]

Perhaps the biggest challenge is fear. We’ve seen it happen time and time again that the agent sits in his car, becomes afraid of rejection, and then just drives away.

Internet marketing is a beast in itself, and it can be difficult to jump into it without any formal training or education. It can also get expensive.

Billboards and radio ads are pricey, and if you don’t have any connections with seniors in your area, you can quickly become discouraged.

So, for many new agents, the simple fact that they have to create their own business is enough to cause them to give up.

2. It’s easy to become discouraged

If you don’t generate any business in your first week – or you don’t do as well as you were hoping – it can be easy to fall victim to discouragement.

New agents often wonder:

  1. Am I making a mistake?
  2. Am I really cut out for this?
  3. Will things ever turn around for me?

This line of thinking starts a negative spiral, and before long, that new agent is so discouraged that they stop putting any effort into generating new business.

At this point, pep talks don’t really work. They fall on deaf ears, and that’s why new agents need to be prepared for failure – at least in the beginning.

3. Rejection hurts

It doesn’t matter what the issue is in life – rejection hurts.

Whether you’ve been turned down by a love interest, laughed at by the American Idol judges, or cussed out on the doorstep of a potential client, it all just stinks.

What new agents fail to see is that rejection is extremely useful.

  • Why were you turned away?
  • How can you tweak your approach to avoid this next time?
  • Is the opportunity really gone, or is there still hope?

This anecdote from Michael Sams shows that what seems like rejection can actually turn around if you just give it some time.

I was training with another guy, and we ended up on Mr. Margarita’s doorstep. I stood there, and he just cussed us out. “I can’t believe you *$%& would show up on my doorstep, and you’re just here to &$%#, and I don’t need any of your *@%#$ help...” and he just went on and on.

I had just come out of college basketball, so I was used to a coach being that way. So, I looked Mr. Margarita dead in the eye, and I said, “You need to know that you’re on a major medical plan, and it is going to end when you turn 65. I know someone has told that you can keep your plan when you turn 65, but I’m here to tell you that you can’t. You don’t need to believe me now, but when you discover the truth, I want you to call me.”

So, I left my card with him and wrote his best option on the back.

Three months later, you won’t believe who called me. Mr. Margarita. Every sentence he said had a curse word in it, but he was a dead lead that came back to life, and he’s still my client to this day.

[Excerpt taken from Can a Lead Really Be... Dead?]

4. This isn’t a get rich quick business

When you work for a new company, you have the luxury of having a set salary from Day 1. For most people, this is a necessity – after all, we have bills to pay and mortgages to be approved for!

The thing about insurance sales is that it’s not a get rich quick business; it’s a get rich over a long period of time business.

And for some people, especially if they’re already settled and have kids, that just doesn’t work for them.

You start at the bottom, work your tail off, and the longer you’re in it, the better it is. But people can’t always see the light at the end of the tunnel, and they may not be able to financially hang in there until that book of business is built.

For some new agents, they get lucky with a big jumpstart. For example, Laura Pecina got started with a massive life insurance case that helped her stay on her feet while she built up her book.

Michael Sams explains, “If I hadn’t started while I was in college – my last 2 years of college – I promise you I wouldn’t be in the business today.”

If you’re starting out later in life, unique situations can help. For example, if you have a spouse that can carry the financial weight for a couple years while you get going.

But for many new agents, the financial constraints at the beginning are just too difficult to deal with, and they’re never able to get over that initial hump to start reaping the rewards down the line.

5. You have freedom – perhaps too much

Being self-employed means you don’t have quotas. The freedom of the job is a blessing, but it’s also a curse. It’s hard to do what you don’t want to do.

Everyone knows how to lose weight, but not everyone keeps themselves motivated to actually do it.

The same thing happens with new independent agents. The more people you see, the better chance you’ll have of selling. But it’s hard to stay motivated when you’re accountable for yourself.

[RELATED: The 6 Worst Habits of Independent Insurance Agents]

It can be helpful to set up a call with a few other independent agents so that you can discuss your progress and have someone keeping you accountable. You can also throw some dilemmas or strong points past each other.

6. Your first impression is killing the deal

You don’t have to be some massive extrovert to be successful in insurance sales, but you do have to be able to hold a good conversation with your clients in order to build up trust.

Brent Kelly, insurance speaker, trainer, and coach with over 15 years of hands-on insurance experience explains, “I know many successful agents that are introverted. Being a great communicator is about listening and asking the right questions. Extroverts can often have more trouble with communicating than introverts — they need to know when to be quiet.”

In essence, play to your strengths. If you’re an introvert, be a confident one, and let your clients drive the conversation.

People love to talk about themselves, and you want them to open up. In many cases, your introversion can be the perfect tool to connection.

So, when new agents start out, they may find that they’re not putting off the right “vibe” with new clients. For example, talking too slowly or too quickly can be a turn-off. Skipping any form of small talk and jumping right into the sales presentation is a massive turn-off. Even showing up with unprofessional clothes on can kill the deal.

[RELATED: How to Improve Your Speaking Voice to Close More Sales]

New agents often get so worked up in their ability to talk about the product that they forget what this business is all about – valuing and helping people.

And that can lead to rejection, discouragement, and ultimately, failure.

Knowing what you’re getting into can be a massive help when you’re thinking about joining this business.

If you’re interested in learning more about what it takes and how to be successful, download the guide below.

If you’re an experienced agent, please leave a comment below – how did you get into this business and what kept you going in the beginning?

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