Shifting the Conversation From Price to Value

National advertising beats the commoditization drum every day, in every media.

“Give me 15 minutes, and I’ll save you 15 percent” is the slogan of the day. “Flo” is a household name, and the “lizard” is everywhere. This trend is compounded whenever people and businesses are struggling to stay afloat. A poor economy has everyone searching for the best price.

As a result, price is where many clients start, especially when they view insurance as a commodity and their agent as just another insurance peddler. Price is where most of our competitors are living … and dying. Therefore, price will be the issue unless you have and execute a strategy that differentiates you — and focuses on value.

Your insureds purchase insurance for many reasons:

• To protect themselves from a significant loss;
• To free up funds that would otherwise need to be held in reserve;
• Laws require it (i.e., workers’ comp and auto liability);
• So that “someone else is looking out for me.”

Look at the last reason a little more closely. This view doesn’t happen by accident; it happens only when we demonstrate ongoing concern for our prospects and clients — before and especially after the sale.

Yes, we “sell insurance,” and sure we’re looking to earn a comfortable living for ourselves and our family. Most of the 40,000 agencies and 400,000 producers view themselves in that light. However, there is a much more noble reason that starts to move us from just “having a sales job” to identifying and addressing customer needs that matter: We “save lives, prevent injury and illness, and help others avoid financial hardship.” We need to act in a way that recognizes that role and search out prospects that will likely view us in that light … prospects that value what we do and make their buying decision in recognition of what they really are buying.

Studies of insurance consumer buying habits tell us that people buy from people they “like and respect.” When prospects like you, respect you and understand the real value of the coverage offered, they will accept a competitive price — even if it’s not the cheapest. If we accept that these are the factors that impact the buying process, how do we “get noticed for caring and for offering value?”

Get Noticed

There are at least seven ways to separate ourselves from competitors. Each differentiator signals that you are different, that you are offering value and that you care about your insureds. Plus, each moves the focus from price to value. Let’s examine them:

2. Be visible and viable. Visible means being seen and heard in places that matter, such as industry or community associations and publications. Viable means making a difference. Don’t just join an association; be active in promoting its success. Find opportunities to publish, such as a bi-monthly column in a newspaper or industry newsletter.

3. Construct your “value menu.” Create a listing of what your agency, your carrier partners and you personally offer that might be valued by prospects and clients. This list is the source of unique and differentiating questions, and will lead to product and service offerings that offer value at a competitive, but not always the cheapest, price.

4. Connect on a personal level. Avoid an over-reliance on typical technical insurance conversation. Try to relate to the prospect/client as a person. Avoid terms and acronyms that reek of insurance.

5. Ask the right questions. Ask open-ended questions like, “Tell me about your business, how it started and where it’s going.” Then, let the prospect talk — while you listen. Follow the 75/25 rule. Give advance thought to the likely value-added services you, your agency and your carrier partner can offer, and ask questions to determine whether the prospect knows and/or cares about these services. Avoid responding with solutions in this initial conversation; simply note the responses and develop your proposal based on these responses.

6. Include relevant value-added services in your proposal. At proposal time, start with what you heard, saw and liked; what you can improve; and introduce and include a specific service plan and calendar. Then review coverage and gaps closed. Finally, close with price.

7. Proactively and consistently seek referrals. A referral positions you with new, at least partially qualified, prospects as someone who is different, who can be trusted and who cares about the client — characteristics that move the next prospect away from price as the determining factor.