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In my experience, some of the smartest and most dangerous people in the world are insurance salesmen, copier salespeople, and auto salespeople. They have a secret called “the lock in” that you can use to seriously enhance your career.
Insurance Salespeople are Dangerous
Several years ago I found myself sitting in the office of an insurance salesman. This was no ordinary insurance salesman. In fact, this guy sold so much insurance that he owned three jet airplanes and was worth a few hundred million dollars.
It was about a four- hour drive for me to go see this guy. We had been set up for a meeting by a mutual acquaintance. It takes a lot for me to be motivated enough to get in the car and drive four hours to go and see someone I hardly know. There are lots of successful people out there and I love meeting them; notwithstanding, sitting in traffic in Los Angeles is not my idea of fun and there needs to be something pretty significant to get me to go that far.
Ostensibly, I was there because the insurance agent had led me to believe he needed my help. He had heard about this thing called “the Internet” and thought that I might be able to help him get his business online—he said we could “do exciting things together” and led me to believe that I could join him in the insurance industry.
I am not in the insurance industry, but because he was connected to a friend of mine, I decided to meet this incredibly successful individual and talk to him about the Internet. That alone would not have been enough to motivate me to go and see the insurance agent. However, in the grand scheme of things this was about the most brilliant thing he could have said to get me motivated to go see him. When it really came down to it, the reason I went to see the insurance agent was because I had some questions that puzzled the heck out of me:
• How does a man with no significant education amass hundreds of millions of dollars selling insurance?
• How does a man with hardly any staff make hundreds of millions of dollars selling insurance?
• How does a man who operates with nothing but a telephone and notepad on his desk make hundreds of millions of dollars selling insurance?
The agent’s offices were nothing extraordinary. In fact, the insurance agent had built what I might as well call “an empire” with a staff of three secretaries and a few part-time insurance agents who helped him.
When I got into his office, the friend of the insurance agent who had accompanied me down to see him started talking about something called “a John Hancock”—some incredible insurance policy that was only granted to the “close associates” of the most successful insurance agents in the country. Apparently, all you had to do was spend $100,000 on the policy and then in two years John Hancock would buy it back for $250,000! This sounded too good to be true and I wanted one!
Despite the fact that I was not there to buy insurance, within moments of arriving in the office I was hungry to get this special and coveted John Hancock insurance policy. I was told by a secretary that there might possibly be one available. I was told by my acquaintance that if the insurance agent “really liked me” he might be able to get me one. I am not sure of the exact dynamic that played itself out; however, within moments of arriving in the insurance agent’s office I was more eager to get an insurance policy than I was to learn his success secrets.
After about 20 minutes of waiting and getting me fully primed to be interested in a special insurance policy, I was introduced to the agent. The insurance agent was a nice guy and he had a bit of charisma and seemed genuinely interested in what he was doing. There was absolutely no impression I got that he was dishonest, or that he did not have my best interest at heart.
However, only a few minutes into the meeting I could tell that he was much less interested in the internet than in selling me insurance. Learning about the Internet had been a pretext to get me there.
The agent walked out of the office with me as I was leaving and told me that he would fly me in his jet down to an insurance conference in Dallas in the next few weeks to learn more about insurance.
I never ended up hearing back from him about that one.
What did happen is that a couple of his associates called me the next day to discuss insurance and within a few weeks (after I had a medical exam) I was signing papers for a big life insurance policy that will require me to make payments on it yearly for the next 20 years. Not one, two or three year—20 years. I could scarcely believe what happened and am still trying to figure out how I purchased life insurance to this day. I am glad that I have it, but at the time I was not sure.
“He’s going to get back to you about the Internet thing,” the insurance agent told me as I was signing the first of many checks for the insurance policy. I never heard back from him on that either.
The Lock In
What I learned later was that the insurance agent gets paid every time I make a payment—for 20+ years.
What is interesting about insurance is also that every single year that goes by, the cost of getting new insurance gets more expensive so you end up getting “locked in” because if you get rid of your insurance you have to get a new policy. The new policy will be more expensive because you will have aged in the interim and life insurance always gets more expensive the older your get. Moreover, you have to get a medical exam every time you get a new insurance policy.
It is easier just to get locked in …
Copier Salespeople Are Dangerous
Around this same time a copier salesperson who had sold me a very expensive copier had “friended” me on Facebook.
This copier cost $300,000 but the cost was not the issue. The issue was that each time I turned the copier on it started charging me money. It was connected to the Internet so it could charge me in real time:
• It charged me money for every page I printed.
• It charged me money every time I used more than one color in the document.
• It charged me money if I printed on more than one side.
• It charged me more money if I printed ink on more than 20% of the page.
• It charged me money for service when it wanted (it automatically called headquarters to send service people to it)
The machine just kept charging money. I eventually had to stop using it. It schemed to charge money in every way you can possibly believe. The machine was an evil genius.
While I am not a big Facebook user, at the time I was monitoring advertising campaigns our business was doing on Facebook so I was on there a lot. I started noticing all sorts of updates from the copier salesperson.
• She was on a cruise.
• She was hiking in Nepal.
• She was redecorating her house (again!)
• She was looking for art in New Orleans
Despite the fact that this girl was probably in her mid 30s, she seemed to be making an extremely good living selling these copiers. When I finally realized that she was doing incredibly well was when she announced to all of her friends on Facebook that she was not using her “new” vacation condo at a ski resort enough and would rent it to her friends for $500 a night if they wanted to use it.
This entire experience with the copier salesperson left a strange taste in my mouth. Here I was struggling to pay for this ridiculous copier, working like crazy six days a week and here she was off having a great time redecorating, shopping for art and skiing at her condo in her second home! It was almost too much to believe.
“I could quit this job and make $800,000 a year selling copiers,” one of my employees said to me once. He was sitting in my office asking for a raise. I was a bit astonished at the time and thought he was a little nuts … but in retrospect he was quite right. I have every belief that copier salespeople can make that much money (and they do).
The Lock In
Copier salespeople can make so much money because they get paid every time you make a payment on your copier and every time you make a copy—they get a percentage of what you spend.
When you get a copier, they have every incentive to keep you “locked in” to using them indefinitely. This is what a copier salesperson does: They sign you up for a contract that just keeps going and going. By the time the copier wears out, or you have paid it off, the salesperson will be there with a new machine that is more enticing than the old one. The process never stops repeating itself.
You are locked in …
Auto Salespeople are Dangerous
For several years I drove Mercedes Benz automobiles. Over the course of around 15 years, I had purchased 4 cars from an auto salesperson at the Mercedes dealership in downtown Los Angeles. Each time he had talked me into getting leases on the cars and always “dangled” low monthly payments in from of me as a way of inducing me to purchase a given car. Every few years I would saunter into the dealership and purchase a new car.
The salesman was from India and he liked to brag to me about how much money he was making, how he took his family back to India flying First Class, how he was a member of an expensive country club where he played golf and so forth. Despite the fact I was in the habit of leasing $100,000 automobiles from this man, I generally felt somewhat intimidated by his references to great wealth.
Several years ago a new Mercedes came out called the S550, which was a replacement of an old body style. The auto salesperson called me and told me that he “only had one”—a special “launch edition”– and if I wanted this new car I had to get down to the dealership right away. He told me that I was “his favorite customer” he was holding it especially for me. I had been up very late the night before working on something and was a bit disoriented but made the trip anyway.
Within a few hours I had traded my old car (just off lease) in on the S550. When I got to the dealership the salesman told me the car was selling for $20,000 over list price since it was “new and exclusive.” As I negotiated the lease, I told him that I refused to pay more than list for the car and wanted to have a buyout that was based on the list price of the car if I wanted to get out of the lease. The salesperson agreed and I felt as if I was getting a good deal on the car since he had started the pricing at $20,000 over list.
A few days later, I realized that the while the lease price of the car had been based on the list price of the car, the interest rate I was being charged was going to amount to something like 30% and that after four years of payments I would have paid more than the list price and would still owe a ton more money on the car.
I called up Mercedes Benz and converted the lease into a purchase at the agreed-upon list price. This reduced the payments on the car to something like 3.9% for the interest rate. For days the salesperson called me and attempted to talk me into not doing this. He made one argument after another but none of them made any sense. I had paid too much for the lease and he knew it and I knew it.
Finally, the salesperson literally came by my office begging … he would make thousands of dollars on “fees” for signing me up for the lease as long as I kept it for at least six months. Would I please keep the lease active as a “favor” to him?
Beware of “the Lock In”
Automobile companies and auto salespeople have us locked in. Cars get old, become less fashionable, or something emerges with newer and newer features …. And we want a new one. Every time the car salesperson sells us a car they make money. Every time we sign a lease for a new car the salesperson makes money. Our cars become like ATMs for the auto salespeople who sell them to us.
We are locked in …
What Does it Mean to Be Locked In?
Without belaboring the point, there are tons of economic forces out there that are constantly trying to lock you in. The longer the lock in … the more money they stand to make off of you.
I am not saying there is anything wrong with this … it is the way of the world.
Why does the insurance salesman make so much money? He is able to “draw people in” and then “lock them in.” It works.
Marriage is another form of “lock in”. All around us people, organizations and others are trying to “lock us in.” Unions lock us in. If you join a union you will be expected to pay dues.
The list goes on and on.
Your success in your professional life will be due in no small part to your ability to “lock in” your employer. You want to get your employer and the people you work for to “commit” and keep coming back and using you again and again.
The more people are committed to you and the harder it is for them to “switch” the more they will be committed to keeping you around.
How does lock in work?
Several years ago I had an unusual experience. Someone came to me in response to a job advertisement and offered to do work for me for $10 an hour. They seemed very earnest and excited about the job and they were the best person for the job at the time. Within 6 months this person had learned their job so well they became completely indispensable. Every time he mastered a task, he took on a new one and mastered that too. Eventually he had some involvement in nearly every aspect of the business. He was so indispensable that there was no way I could do without him. The person kept getting raise after raise and continued this pattern for many years.
Then the person started missing work. They started doing a poor job at many things. Stuff started to get sloppy.
But I did not do anything even after numerous discussions with the person about improving their performance.
I was locked in… the person had become indispensable and letting them go would have created a great deal of chaos. The person had been having problems and eventually I found out they needed to return to their home country due to issues back there (this was the reason for the problems) … but I would have worked with them for some time due to their high skills in their job—I was locked in.
Why was I locked in? It would have been far too difficult for me to switch employees. The person had learned too much about their job and had a hand in multiple parts of the business. He was also very good at what he did, but more importantly replacing him would have caused disruption to everything my company does.
You need to “lock yourself in” to your employer.
A car may entice you with a low payment but it locks you in for a long period of time…
Insurance entices you with low payments but locks you in for a long period of time …
A copier entices you with low payments but locks you in for a long period of time …
Lock in is an art form and companies and others are doing it to us all the time. In order to really catapult your career, it is exceptionally important that you too learn to get a job practicing “lock in” and keep a job practicing lock in.
You can entice an employer by agreeing to work for free or at a reduced rate for a short period of time. You can then become indispensable.
When people get laid off, or not hired, they have done something that has prevented them from effectively locking in the employer. You need to lock in employers and learn from the greatest. After all, if insurance agents, copier salespeople, auto salespeople, and others can live the lives of their dreams with lock in … so too can you.
Get your employer to commit to you, and keep coming back again and again. This “lock in” is a tactic that companies use all the time, and one that you must practice to get and keep jobs. Make an offer to attract an employer, and then make yourself indispensable. People who fail to lock in their employers are usually the ones who find themselves laid off.
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