FEATURESTORY

by Paul Nolan

Like any parent, Lloyd "Noisy" Johnson wanted the best for his five children. So when his youngest daughter Charlene showed a knack for sales after graduating from college, Lloyd, a salesman for more than 20 years with the Prudential Insurance Co., wrote a letter to New York Life Insurance Co. imploring them to recruit his daughter.

"If I was going to sell insurance, he wanted me to work for the company that provided the best sales training in the industry," says Charlene.

That impression from a man who sold insurance in rural Minnesota for 20 years is two decades old itself. But New York Life's reputation as a company that provides topnotch sales training is even stronger today.

For 51 straight years, the company has been the dominant leader of the Million Dollar Round Table (MDRT), an independent association of the world's leading life insurance and financial professionals. "That's like winning the Super Bowl 51 years in a row!" says Jim Lusk, managing partner for New York Life's Minnesota office.

MDRT members are considered to be among the best in the industry and have achieved the highest standard of sales excellence. In 2004, New York Life had 2,321 MDRT members. The closest competitor, Northwestern Mutual Life Insurance, placed 1,534 of its salespeople on the Round Table.

"We keep asking ourselves, 'If we have the most elite sales organization in the world, how did we get there?' " says Lusk, a fireplug who spouts Zig Ziglar one moment and Yogi Berra the next. He has definite opinions on how his team of 70 agents who are spread throughout Minnesota succeeds, but for the most part, it's just the New York Life way.

Investing In the Future

It seems appropriate that an insurance company understands the benefits of long-term planning and investing up front for something that will pay off down the line. New York Life spends $150,000 to put each of its agents through New York Life Insurance Company (NYLIC) University in their first three years, far outpacing any of its competitors, according to Lusk.

In fact, those first three years are treated as an extended probation period - a lengthy window in which the company makes sure that each agent is a proper fit and asks the agent to assess whether selling insurance and financial planning is the career they want. Prospects have put in 50 hours of their own time just getting to the point where New York Life determines if they're keepers.

"We don't hire anybody," says Lusk. "It's a selection process. It has to be a good fit for both of us. We scare away a lot of people by going through three or four interviews." The company's training process has been tweaked and honed to the point where it's almost on autopilot.

Prospective agents go through a series of exercises and real life prospecting during the first three months that shows whether they have the mettle for the highly competitive insurance business.

Those who make it past the initial screening begin Fundamental Career School, an intensive seven-day course spread out over two weeks.

Afterward, they split their time between field work and additional training, including an all-day training session every Friday for the next three years. Attendance is mandatory. Agents working in rural Minnesota towns, for example, drive as much as three hours every Friday to attend these sessions at the general office in a Minneapolis suburb.

Staffing is another New York Life differentiator. In a world where corporations outsource training by flying quick-fix coaches in for two-day workshops, New York Life staffs each of its general offices - 120 in all - with a managing partner and a full-time sales development manager. Many general offices, including the one in Minnesota, have three or four additional training partners. (The greater New York general office has 20!) All of these full-time employees are dedicated to creating more effective salespeople.

Lusk, who rose through the ranks at Northwestern Mutual Life Insurance Co. before jumping to New York Life as a second-line manager in 1995, says it is industry standard for managers to have to develop a team of agents while maintaining their own customer base. It's a huge advantage to be able to focus solely on developing agents and to have a team of six additional trainers plus support staff to assist him - like playing tennis against an opponent whose racquet strings are broken.

Where Others Fear to Follow

Success typically breeds copycats. So why hasn't New York Life's status as the largest mutual life insurance company in the United States resulted in more imitation? For starters, there is a significant financial barrier to entry. Lusk says his Minnesota office easily spends more on salaries for its in-house training staff than all of its competitors.

Companies in insurance and other industries hesitate to invest the significant sums that New York Life spends training its salespeople for fear they may put what they've learned to use at a competitor.

But New York Life has found that training actually increases loyalty. Lusk proudly notes that there are several second and third-generation sales agents in the 160-year-old company.

What's more, says Robert Bork, the sales development manager for the Minnesota office, "there is an old saying that the only thing worse than training your people and having them leave is not training them and having them stay." Lastly, Lusk says New York Life's status as a mutual company - it is owned by its policy holders - allows for a long-term approach that many publicly held companies feel they don't have the luxury to take.

"Noisy" Johnson understood that distinction 20 years ago when he asked New York Life to give his daughter Charlene a chance. He knew a good company when he saw one: Despite his 20 years as a salesman for Prudential, he kept only one life insurance policy until the day he died and it was from New York Life.

 

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