The Hard Sell

Tom Lipscomb is a god, at least as salesmen go.

Lipscomb's name is synonymous with almost-magical sales techniques. "My training was to listen to his tapes, read his handouts and go sell like Tom Lipscomb," says one salesman who used to work for the Northwestern Mutual life insurance company. "He was kind of touted as the second coming of Jesus."

Lipscomb started selling life insurance while he was a music student in college. Within a decade, he had forsaken his saxophone to make millions selling expensive policies to rich people.

Jeff Sanders was a disciple's disciple.

Sanders was a natural salesman. Part wiseacre and part smooth talker, the twenty-year-old college student had a talent for getting along with people and making them feel he was telling it to them straight. That charisma, along with his financial acumen, grabbed the attention of a business department administrator at the small liberal-arts school Sanders attended north of the river in Kansas City.

When a recruiter from the Milwaukee-based Northwestern Mutual called the college looking for interns in the spring of 1998, the administrator recommended Sanders. He went in for an interview at a Northwestern Mutual office on the corner of 31st and Broadway, where he was wowed by the man who ran the agency, Dan Ertz.

"I saw the Jaguar [that Ertz drove], and the guy dresses in suits that are pretty damned expensive," says Sanders, now 25. "His ties cost more than my watch. And he lives in some house in Mission Hills. It's pretty impressive to a young person."

And Sanders had always dreamed big. He fantasized about owning a spacious home and driving a sporty car. It seemed that his summer job selling insurance just might be the ticket to the lifestyle he coveted.

At the time, Sanders was excited to be working just a fifteen-minute drive from the insurance agency in Mission, Kansas, where one of the company's nationally known star salesmen was based. Sanders knew that Tom Lipscomb traveled the country teaching young recruits and veteran salesmen who were earning modest incomes how to mimic his spectacular success. Sanders looked up to Lipscomb.

To salesmen coming up, Lipscomb's life must sound enviable. In seminars, he has been known to talk about how "balance in life" is more important to him than sales. "A few years ago, I made a decision that I was going to work only about fourteen days out of the month. ... I take off an average of a week a month," Lipscomb said at a 1998 seminar. (The Pitch has obtained a videotape.) "Most days I get home at 4:30 -- most days," he told them.

"Occasionally, I mean, I am really ticked off if I get home at 5:30. That's too long a day for me," Lipscomb explained, adding that, with a wife and two children, family time was important to him.

"That's the sales pitch they used to get you to sign on -- the ability to have all your hopes and dreams come true," Sanders says.

Some ex-salesmen say the pursuit of that dream comes at consumers' expense, when gung-ho agents are driven by greed to misrepresent what they're selling.

Sanders quickly learned that his new internship wasn't exactly a plum job. But it would be several years before he realized that, for him, it had been a financial and emotional disaster.

Northwestern Mutual's home office in Wisconsin oversees hundreds of insurance offices around the country, run by "managing partners" like Ertz. These agents own or rent their office buildings and sometimes charge the salesmen (and a few saleswomen) exorbitant fees for rent and office supplies. New salesmen are not employees of Northwestern Mutual but rather independent contractors running their own businesses.

For some, especially those who are new to town and don't know anyone who might want to buy life insurance, this is the beginning of a cycle of oppressive debt. Insurance can be hard to sell, but from day one the young salesmen pay rent and other costs. Northwestern Mutual even offers loans to college interns and new recruits to get them started, in case they don't have cash or credit to cover their growing expenses.

Sanders, who is so embarrassed by his current financial problems that he asked the Pitch not to use his real name, worked for the company that first year from May through September. He didn't get much help from anyone else at the agency, so he called family and friends and even looked through the Yellow Pages for people who might need life insurance. But he sold few policies. The policies he did sell were of the basic, fairly cheap variety and didn't bring in much commission.

Sanders started charging his living expenses to his credit card and used plastic to take potential clients to lunch. He dropped hundreds of dollars on suits so he could look like the high roller he wanted to be. Meanwhile, he was racking up debts to the agency for rent and office supplies. After his first three months, he owed about $3,000.

He hadn't expected an internship to be so hard.

"Ninety percent of the recruits they bring in are young," Sanders says. "They bring you in, and they just promise you the moon and they make it look easy."