Selling insurance the right way…

Training and competency is having a huge impact on the electrical market and retailers need to be fully conversant with the rules that now surround the sale of insurance on white and brown goods.
Firstly the Competition Commission’s investigation into Extended Warranty resulted in the Supply of Extended Warranties on Domestic Electrical Goods Order 2005 which, in turn, imposed a new set of rules on retailers when selling warranties. More recently initiatives from the Financial Services Authority (FSA) have focused on principles-based regulation and the need for insurance companies (including those that underwrite and administer warranty policies) to Treat Customers Fairly (TCF). Both industries are under close scrutiny and, as such, competence and compliance is a ‘must have’, not an optional process.
As well as the need for regulatory compliance, retailers and distributors are now operating in an increasingly competitive marketplace and there is intense pressure on margins. The revenue generated from insurance schemes has become even more critical in today’s current climate and having well trained sales staff is a key factor in optimising warranty sales.  
Evaluating the need
All training programmes should be tailored to the needs of the individual retailer so the first step is to complete a full training needs analysis (TNA).  Recommendations can then be made on how the insurance scheme can be improved from a compliance and, if appropriate, performance perspective. Once agreed with the client, the training can then be delivered.
Whether individuals or teams are trained depends on the resources available and the scale of the training. It may be suitable on some occasions to train using a one-to-one technique or alternatively to train the retailer’s own trainers.
It is vital to agree key evaluation indicators. If training is required following a compliance breach then it will often be necessary to re-visit the relevant retail outlet to ensure training is embedded. If the objective is to increase sales then it is important to establish a robust framework for reporting, so that sales figures can be drilled down by store, team or even individual.
Going ‘live’
The agreed training will often be rolled out by using scripts that contain open questions. It is important that these not only reflect the retailer’s sales philosophy but also compliance and reputation-related considerations. 
The nature and timing of training programmes can vary greatly. Sometimes training will be provided prior to the actual launch of a scheme, ensuring that sales staff are able to talk confidently to customers about the benefits of insuring a purchase. Sometimes a retailer may wish to introduce a new product and require training in place by the launch, in which case there may be a tight deadline to meet. Or it may be necessary to run a training programme for an ongoing purpose over several years, providing regular input. Also, training may be offered hand in hand with account management intervention, working with the retailer to grow their insurance revenue.
The diagram on the right illustrates a typical training timeline.
It is important to identify the best method by which to deliver training. There are a variety of methods to choose from, including training the trainer, classroom style delivery, computer based training (CBT), audio and workbooks. Consideration should also be given to the levels of training required. For instance, it may be more appropriate to train key staff to become ‘insurance specialists’ who can then become referral points for less experienced staff.
The three benefits of mystery shopping
Mystery shopping has proven to be an invaluable tool in helping us to make that evaluation. It provides us with accurate and reliable information that enables us to identify specific knowledge and skills gaps whilst also identifying regulatory breaches and consequent training needs.
The benefits to be realised from the adoption of a robust mystery shopping and training programme are threefold.
Firstly it is absolutely key to the success of any insurance scheme that all staff become and remain competent in what they do and say to customers.  If a customer is not advised correctly or is given misleading information, this will mean the customer is not being treated fairly.  All potential customers are entitled to receive clear information from someone competent.  Adoption of good practices in line with FSA outcomes on TCF ensures that retailers are able to deliver first class customer service and avoid any adverse publicity.
Secondly, a competent and motivated sales team will appear fluid in their sales technique and engage with the customer more easily.  Regular mystery shopping maintains the proactive assessment approach and a solid training foundation ensures that sales staff are confident and at ease with the product.  This behaviour will increase conversion rates and should ensure reduced cancellations.
Thirdly, in a regulatory and legislative climate which is constantly changing, a robust mystery shopping and training programme which demonstrates a proactive approach will soften any impact from future changes.
Conclusion
Good training practice supported by regular mystery shopping assessment will lead to a motivated and competent sales team, ensuring satisfied and well informed customers.