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7 Best Practices for Cross-Selling Ancillary Health Insurance Products

Congratulations! Your health plan has decided to sell an exciting new ancillary health insurance product. You’ve even succeeded in getting initial executive buy–in and are setting up processes for maintaining that internal momentum. 

Given the growing demand for plans to sell products like dental, life and pet insurance, in addition to medical, you’re on the fast track to profits, right? Well, not yet.

There’s another important component that sales leaders and HR specialists have to get right, and at the right time, so the organization can achieve long-term success with cross-selling. That is, having a robust sales compensation plan in place. Your sales team is the front line of getting these products in front of accounts, so they need to know both what’s in it for them, and that the organization has sales expectations that need to be met.

It’s important that you approach compensation discussions with the mindset of a salesperson – understanding their motivations is critical, since you may not be as affected by the outcome. Their compensation isn’t guaranteed to the extent yours is; it’s tied to the results they produce as opposed to a higher base salary. (Remember that when reviewing your sales team’s compensation at year end, especially your high performers. Salespeople making a lot of money should be an indication of a successful sales organization.) 

To get started, here are 7 best practices to consider when putting together a sales compensation plan for successfully cross-selling ancillary health insurance products: 

  1. Get money in hands – and fast. For new sales, the majority of overrides need to make their way to the sales team as quickly as possible, to get them excited and show them what cross-selling can do. You can reduce the override on renewals as the salesperson’s block of business grows.

  2. Use both “carrots and sticks.” Carrots are the upside (incentives) and sticks are the downside (penalties) for salespeople. In the long term, a cross-selling strategy that doesn’t include both an upside and a downside just isn’t going to work. 

    For the initial rollout, there should only be an upside. This will motivate what I like to call the “early adopters,” those who are more comfortable with risk. After that, it’s time to introduce a downside – a portion of all internal sales compensation dollars that are at risk if cross-selling goals aren’t met. In my experience, downside risk is necessary to motivate those salespeople who are comfortable with the status quo. Unfortunately, these are oftentimes more senior salespeople with larger accounts. 

    You can’t have a successful cross selling program without your entire sales team on board.

  3. Leadership needs “carrots and sticks,” too. They need to have skin in the game for cross-selling to work. As with the sales team, year 1 shouldn’t have a downside. This will give them time to put in place the tools they need to motivate their teams.

    Starting in year 2, leadership’s annual variable compensation needs to be tied to their cross-selling goals – you’ll want to increase the percentage with each step up a person is on the ladder (such as Manager, Director, VP and SVP).

  4. Don’t forget about brokers. Internal sales and broker compensation go hand in hand – you can’t hold your sales team responsible for hitting targets if brokers aren’t being held responsible, too. As with both sales and leadership, year 1 should be all upside for brokers. Then starting year 2, they should have to meet cross-selling goals in order to maximize their bonus.

  5. Have some fun with it. Create some healthy competition for your sales team by tracking and publicizing their cross-selling results. If you want to take it a step further, give a reward to those at the top. You can include Managers and Directors, too.

  6. Get the timing right. The timing here is really critical. Ideally, you’ll want to get the compensation plan in place about half-way through the year – that means, six months before the new sales cycle starts on January 1. So be sure to start the discussions early.

  7. Share the success. Once cross-selling has taken hold, you can include it as a piece of your executive leadership’s incentive plan and the entire organization’s bonus program. This encourages shared responsibility and will make everyone want to be part of the great things cross-selling will bring to your organization.

It’s important to keep in mind this isn’t a one-size-fits-all strategy. There are different approaches for different coverages as well as market segments – that’s why it’s critically important to understand your sales teams and who will be your early adopters, fast followers, and last to adopt when it comes to promoting something new.

However, regardless of the differences within your organization, cross-selling is an opportunity to not only add value for your customer (accounts) and their employees (members), you’ll be improving your new sales and retention results, and giving your sales teams the ability to increase their compensation and retain your top performers.

Whether you’re looking for high-level guidance, or you need more hands-on support, I can help you develop a compensation plan that will set your organization up for long-term cross-selling success. Contact me to get the
conversation started.

Want to see the numbers? I’ve put together an example of a sales compensation plan – comparing year 1 with post-year 1 – that illustrates the “carrot and stick” approach I outlined above.