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Update News for March 2015    

Here is a quick run-down on what you will find in this bulletin:

• Complaint Department
  
  
• Please Think Long View
  
  
• ROP Factors - New Data Format
  
  
• Renewal Premiums Next
  
  

These topics will be dealt with in more detail throughout this bulletin.

The bulletin this month is the same as for the U.S. While some of the specifics are different (American versus Canadian market), we think you'll get the relevance when you read it.

We received a couple of complaints in February, both of which stood out in my mind and are worth discussing.

I had someone leave a voice mail on my phone, despite the fact that we tell you in our voice mail NOT to leave a message, complaining about the terrible service that we provide. Something to the affect that the person had not encountered worse service anywhere with any other company. He went on and on, it was quite a rant. The person did not leave their name or phone number, which meant I had to listen to what was lengthy diatribe to see if there was a number to call back at the end. There wasn't, and there was no way to return the call.

We ask that you do not leave voice mails because most people don't know how to leave a voice mail very well. Many messages are rambling. They will go on and on about the problem, how they tried to fix it, then how they tried something else, yada, yada, yada. After a minute or two we get to the end of the message, and then they leave their name and a phone number.

Question: Why do people leave phone numbers like they are auctioneers?

The rest of the message is usually slow and rambling but the phone number is always like a machine gun. It's probably because they say it so often, and they know it so well, it just comes charging out.

Hint, when leaving your phone message for anyone else, KEEP IT SHORT. Make sure you give your name, and then say your phone number clearly and S L O W L Y. I usually repeat my phone number once, and both times S L O W L Y.

But please, don't leave us a voice mail - AT ALL.

Rather than leave a voice mail we ask you to email us at service@compulife.com. Just send your name and phone number, and after, if you want to add a line about what you want/need, that's OK but not necessary. We are simply looking for the best way to call you back.

And yes, we get emails from folks with service questions, and they don't provide their phone number. We don't want to dialogue or solve the problem by email, we want to call you. Name and phone number, please!

In total we have 4 phone lines for handling support and sales calls. Jeremiah has two at (800) 798-3488 and I (Bob) have two at (888-798-3488. Once the two lines have people on them, you will get to our voice mail. Once again, we ask you to email us rather than leave a voice mail. Why? Because both Jeremiah and I get the emails that are sent to service@compulife.com. Once we get your email, we will both try to get back as soon as possible. If Jeremiah gets there before me, he forwards your email to me and says "DONE". If I get there before Jeremiah, I email him "DONE". It's all about getting back to you as quickly as possible.

All we need from you is your name and phone number and we will both get it if you email it to service@compulife.com.

Now I realize that some folks prefer talking on the phone rather than writing an email. But our product is now completely dependent upon the internet. You can't run Compulife unless you are hooked up to the web and have an email, which is how we send you information whether it is an invoice or installation software. So we know you have access to email, please use it when you can't get us by phone.

The second complaint/request came by way of email. It had to do with TIAA-CREF at www.term4sale.com. The email said:

I had a lead come through and the consumer specifically wanted TIAA-CREF, however no independent agent can sell that company. Would it be possible to remove them from the website/quotation system?

It's not the first time we have had a comment like that, and we thought it would be good to respond so that everyone can review our strategy. The www.term4sale.com web site says this on the home page:

Term4Sale® is committed to providing a database which includes every term product for which we can obtain information. Providing that we are able to obtain the rates for a term product, there is no reason for Term4Sale® to not include that information. As a result, no other internet web site will give you more competitive pricing information about a broader array of companies and term insurance products than Term4Sale®.

So why not just change the promise? Why make a promise like that in the first place?

The answer is simple. We do not have the financial resources to spend money promoting and advertising the site. In essence this site is competing with life insurance agencies who spend much larger amounts of money promoting and advertising their sites, and they can afford to do so because they are the people who actually end up retailing the insurance product. When they make the sale, they get paid the full commissions. Their revenue potential, as a result of those sales, is far greater than our revenue potential which is generated through the sale of software and listing fees.

To better understand the point that we are making, last month we shared with you a couple of testimonies from agents who make sales through the site. In the case of the one, we made the following comment:

The first subscriber, who made the $3,000 commission, has a total of 8 zip codes listings at www.term4sale.com. He gets 3 of those for FREE, and he purchases an additional 5 zip codes which cost him $75 per year. Combined with the subscription for $180 per year, his total annual investment in Compulife is $255. From that he generated a $3,000 commission. That makes Compulife look like a pretty good investment and we suggested he consider adding some additional zip codes after he gets his commission check.

If we were the one generating the $3,000 commission, rather then the $255 software/listing fees (in Canada, that same subscriber would be paying $149 plus $50; $209), we would have more money to spend on advertising. Clearly, by contrast to the person earning the commission, we are operating at a disadvantage but we knew that right at the beginning. So the goal, in the beginning, was to come at it from a completely different approach. The idea was to quote all the companies and all the term products, and pitch the fact that www.term4sale.com is the best life insurance comparison web site available to consumers. Our hope was that the media would pay attention and to a large degree they have. Here are some articles we have enjoyed over time:

You simply can't buy the kind of publicity that we have enjoyed. That publicity is worth a lot by comparison to advertising. But our strategy does have a downside for our subscribers in that a consumer may want to buy a policy from a company that the subscriber does not represent. In some cases it may be a company which will not accept the subscribers business even if they wanted to give it to them.

The short view solution is to remove the company. After all, if it doesn't benefit our subscriber, why leave it in? The problem is that such a notion undercuts the reason that consumer advocates, financial reporters and bloggers talk up and write about our site. If we breach the trust those folks have put in us and our service, then we lose a very important flow of traffic to the site. Worse, the same folks who talk up our site, will turn on it and publish negative comments about how our site is not the best site on the web for term life insurance quotes.

Does this mean you could lose a sale you would have otherwise made? That's quite possible. But that's a fact of life in the retail world.

For the most part life insurance agents operate with a captive audience, and most of the time they are not competing with another agent or company to get the consumer's business. I do not believe that reality is compatible with what www.term4sale.com is or does. I also don't believe that's compatible with retailing of life insurance through the internet. If it meant that our subscribers never made a sale as a result of www.term4sale.com, we would have to re-think our model. But our subscribers do make sales and there is no doubt that in total, they make far more sales than they would otherwise even if some sales are lost to companies they can't represent. I believe www.term4sale.com will continue to grow in popularity and use by consumers.

NOTE: As of the writing of this bulletin, we already had 20 pages of emails for term4sale requests during February. Last year, for the entire month of February, the number of pages was 15.

As I like to say to agents who ask, in the race between the tortoise and the hare, we are that thing with the hard shell. I believe that our strategy will win in the end. It takes time, but I think the signs are very clear.

And finally, if you are a life company like TIAA-CREF which does not take business from brokers, my question is "Why not?". There is no doubt that your retail operation does not function without a significant costs to you, and a broker who wants to place a case with you would do so with virtually no fixed overhead costs for you for that broker. Why not take the case? Why not pay the broker for that case? I realize that some of those consumers wanting to buy your product are going to end up going to you directly, but you will also have many occasions where consumers are going to go to the broker, who is selling against your product offering competing companies and products that the broker can sell.

Years ago Savings Bank Life was in a similar position. They did not take business from brokers. At one point the company called me to suggest I not quote them at www.term4sale.com because they were getting calls from agents who wanted to sell their policies and they weren't accepting brokerage business. I pointed out that it didn't seem to make sense to turn away agents who wanted to sell their products when those agents represented virtually no fixed overhead costs. Eventually the company changed its position and strategy, and began taking business from brokers. That decision helped SBLI to quickly expand out of their original Massachusetts market.

To summarize, we are absolutely convinced that doing what we are doing, the way we are doing it, is the best long term strategy. And ultimately, even if some business falls through the cracks, www.term4sale.com will remain a bargain way for our customers to participate and profit from sales of life insurance through the internet. Remember, www.term4sale.com is not intended to be your sole source of sales, it's designed to be a supplement to the other ways you generate sales. And please don't forget that nothing stops you from having your own web quoting service on your own website, and there you can quote the companies that you want.

During February we spent a significant amount of time dealing with bugs that arose as a result of integrating the new ROP tables into our system. While it may not appear that we did much (which was the ultimate "best case" scenario), integrating a new data structure into our system is NOT a simple or easy process. The storage and retrieval of data is the foundation of our system. We store rates and values into tables, and our quote system has to look those up and produce the correct premiums using those values.

During the course of the process our programmer has taken extra time to make sure some of the old architecture was replaced by new architecture that makes the computer code more elegant and efficient. The folks who develop the programming language that we use continue to enhance it and process is a good time to take advantage of some of those enhancements. It makes future work easier to do which makes future changes and improvement to the software easier to do.

More important, we try to find ways to store the values so that the lookup of those values is fast. To be fast it must be compact. We also want to secure the data to make sure it can't easily be stolen or corrupted.

There are ways to store and retrieve data that makes the development work much easier, such as using a third party database product. The problem is that you end up with a software product that has been mass produced on an assembly line. By contrast we have built a customized product specific to the life insurance products that we quote. It's akin to the difference between building and buying a Formula 1 race car versus building and buying a Chevy. The Chevy is going to be the quickest and cheapest to build, but in a Formula 1 race it's not going to do very well.

Have you noticed how quickly our software delivers quotations and comparisons on the internet? It's fast for the simple reason that our software is lean and mean, and does not take up a lot of storage space. So when we come to the point of doing a major revision, we are in essence introducing new concepts and methods to an already complex animal. It takes time to work out the kinks and bugs.

We targeted ROP first because the ROP factor tables only impact a small group of the products in our system. Further, by keeping and maintaining the old data files, at the same time as creating and maintaining the new data files, we could switch back and forth between the new and old software if we ran into trouble, which is exactly what has happened and what we have done. We will be doing the same with renewal premiums which comes next.

When the time comes to roll out the major revisions to the main rate data, we will literally have two systems. There will be a new system with a program file called CQS.EXE, and an old system with the old program file called GOWIN.EXE. Eventually we will replace the old system with the new, but not until we are certain that the new is doing everything the old system used to do, and does so accurately.

Putting some of the new stuff in the old program, as we have done with the ROP factors and as we will do with renewal premiums, lets us ensure that the components are working properly before using those components with the main data files.

Once all the ROP changes have been made to the internet engines, we will be moving forward to break out renewal premiums from individual products into a new renewal premium table/file. This will be used for products that share the same renewals and will cut down on significant duplication that exists in our current data format. This will shrink the size of the system.

We have found a way to do this that will not affect the majority of Internet engine users simply as our internet engine does not require renewal information unless you are using the Pick 12 spreadsheet option (most do not). If you do use that option, then we will need to get you a new engine before we make a general release to the majority of engine users.

Ultimately we don't want to burden our internet engine users with too much transitional work during 2015. The fewer engine upgrades subscribers have to make, the easier it will be for us all.