One of the biggest challenges you face in the Insurance Industry (or any business for that matter) is that competition is fierce!!! Does your Company and/or Product represent the “lowest price” in the Market? I highly doubt that it does, which leaves the question that you must answer, DO YOU HAVE TO HAVE THE LOWEST PRICE TO WIN?
I did some research prior to writing today’s message and believe iT serves a valuable point in explaining the difference in PRICE. The 2017 lowest priced Sedan in the U.S. was the 2017 Nissan Versa with a price of $11,990 and at the other end of the spectrum is the highest priced Sedan in the U.S which is the 2017 Bentley Flying Spur W12 S priced at $244,600. How can there be a disparaging difference of $232,610 from the lowest to the highest??
For those of you that are in the Insurance Industry primarily in the Property/Casualty markets, ask yourself this question: Is every car that you insure a 2017 Nissan Versa? Of course the answer is an obvious NO, yet how can that be? I am told everyday from the Agencies I coach and that I manage and develop that “WE ARE TOO EXPENSIVE” If that were true and you believe that consumers always want the lowest price in the market….THEN EVERY DRIVER WOULD DRIVE THE 2017 NISSAN VERSA OR OLDER BECAUSE IT IS THE LEAST EXPENSIVE SEDAN ON THE ROAD TODAY!!!
This is not true and we all know this…but why? Consumers determine value in everything they purchase and they want to EMOTIONALLY CONNECT TO THEIR PURCHASES. They determine what they purchase (cars, homes, insurance, clothing, electronics, etc.) by the value they can connect to that purchase. Your job….your only job is to create the emotional value of the product you offer to your Clients. Value is not determined at time of purchase only but through ongoing, continual emotional relationships you establish with that client. Yes, some customers will leave for a lower price BUT most will not look for a lower price if they can emotionally connect value to their purchase. I like to relate this in the Insurance Agency Model using this formula
PRODUCT+PRICE (RATE)+YOU (YOUR AGENCY)=CONSUMER PRICE
If you notice this formula, YOU (YOUR AGENCY) IS BOLD….BECAUSE YOUR CONSUMER PRICE IS MOST HIGHLY DETERMINED BY THE VALUE THE CONSUMER PERCEIVES AND RECEIVES BY DOING BUSINESS WITH YOU!!!
THOUGHTS TO PONDER TODAY: Are you (your Agency) worth the price? Do you communicate regularly to your clients and the marketplace or are they lucky to hear from you once per year for an annual Policy Review? Have you asked this question of your prospect/clients: If every Company had the same price, what would be most important to you? (now you are finding out what is most important to your client). Do you drive a Nissan Versa? If so why and if not why do you drive something more expensive? Once you can answer this question you will understand the concept of Value (even perceived Value) vs. Price. When your client comes in to insure their vehicle and wants the cheapest price, ask them these questions: How did you decide on this vehicle to purchase? Was it the lowest priced vehicle you could purchase? If it wasn’t the lowest priced vehicle you could purchase, why would you want the cheapest insurance to protect it and more importantly YOUR FAMILY AND ASSETS? Lastly, address PRICE immediately so that it can be on the table and handled so you can provide the VALUE, you offer? Here is something that I would recommend you try: “Thank you Mr./Mrs. prospect for reaching out to me for your Insurance needs. I value you that you reached out to me because that shows me you care about having the BEST protection for your family, assets and future. The BEST is not always the cheapest, in fact most of my clients pay more for my services BECAUSE they know when they leave my Agency they have received A HIGHER VALUE EXPERIENCE AND THE PEACE OF MIND THAT THEY UNDERSTAND INSURANCE FOR POSSIBLY THE FIRST TIME IN THEIR LIFE AND ARE CONFIDENT IN THAT PURCHASE (just like you were when you purchased this vehicle even though you KNOW it was not the CHEAPEST CAR ON THE LOT!!!)”
John Lucero, is a successful business owner with over 20 years of experience in multi-line insurance agency operations for several major National Brands. With an expertise in Recruiting, Educating, Coaching, Developing and Product Knowledge, his passion and drive to ELEVATE Insurance Agencies to higher levels of success is what keeps him inspired about the future and motivated about making a difference.
Comments 1
John
Great idea