Annuity companies offer a wide range of products for investors in different age groups and taking into consideration various other parameters. Selling an annuity product to an investor takes a great deal of effort on part of the company and the representative. Companies use various kinds of strategies to sell their annuity products. While some use the concept of hard selling to sell their products, others use marketing strategies to create a pull. Let us see some of the strategies that are adopted by companies to package an annuity product, sell annuities to the investor and how they service the product once it is sold.
It is important to remember that like any other product an annuity also has a sales cycle. It starts with marketing and ends with servicing the product.
As we all know there are various annuity products offered by different companies. The annuity products are categorized under two broad headings of immediate annuities and deferred annuities. Advertising products in the print and media play a large part is the brand and product visibility. Internet marketing is also catching up in a big way. Nowadays, customers have also become much more educated about the annuity products that they buy. With information available at their fingertips, they have the option to compare a wide range of products offered by different companies. Customers use annuity tables to calculate the return that they can expect from a particular product. As a result, the sales representatives of the companies are also bracing themselves up to face the new generation of knowledgeable customers.
Under the two broad categories of immediate annuities and deferred annuities, there are specialized annuity products which are sold by the Insurance companies. A proper segmentation of customer base is done before the customers are targeted. The profiling of customer base is very important before a product is targeted at the customers. A person with a high disposable income and age on the lower side of the 40’s may be interested in a variable deferred annuity in preparation for retirement. Age, income and financial factors are taken into consideration before a product is pitched. The software applications used by various insurance companies are able to do this detailing to a great extent.
To keep their cost of selling low, insurance companies prefer to do cross-selling and up-selling of various products. It is not surprising to hear a reverse mortgage agent pitching an annuity product to an existing customer. The market for annuities has become much more competitive than what it was a decade back. Companies are offering a new range of annuity products almost every day to keep pace with investor’s changing financial requirements. This trend is going to continue and more sophisticated financial products are in the offing for potential annuity buyers.