ACG - Agency Consulting Group

The PIPELINE

A national monthly newsletter for agency principals dedicated to agency management topic

Welcome To Agency Consulting Group Inc.'s Insurance Agency Benchmarking!!

I have just completed a process that most people both look forward to and dread - buying a new car. The process evokes aggressive tendencies in some people, stress, fear and anguish in many more buyers and some feeling of apprehension in most buyers. Yet we are so enthralled (especially the men) by the glamour, ego and power feel of a new car that we all overcome our apprehensions and we go car shopping.

What causes the uncomfortable feeling that many of us get when shopping for a car?

How different is the gut-wrenching feeling related to buying a car from the similar feelings expressed by many respondents in our focus groups on shopping for insurance?

The answer is that these two exercises appear uncomfortably similar. Both tend to feel that the consumer is not in control. The seller appears to be in control of the situation.

Is this what the seller desires? Probably not.

But the fact remains that the greatest fear when buying a car is that the dealer will, somehow, influence you into spending more money than you intended for a car that does not meet your needs. He, not you, would be in control of the deal.

Similarly, insurance buyers believe that the agent has some form of control over the product and the price being charged and that the best agents will "talk them into" buying more insurance than they need.

Fortunately, there is a silver lining in most dark clouds - including the car buying and insurance buying experiences. If we learn from our experiences we may not be doomed to repeating them, after all. I'd like to tell you about my "silver linings".

Some of us have had that rare experience during our car-buying lives of encountering salespeople who seemed to be different. They were comfortable with themselves and with their customers. They exerted no pressure, just educated you about their product. They did not ask leading or intrusive questions that we feel are designed to ferret out how much money we have to spend. And the end result was that we actually WANTED to buy a car from them. We sometimes even spent more or differently than we intended because of their influence -- but only because we knew that they were trying to satisfy us, not just to sell a car.

During this car-buying exercise, I had the pleasure of encountering two such salespeople - I'll call them Evelyn and Rob. I would like to compare them to their counterparts in order to illustrate similarities and differences between salespeople in both the auto and insurance industries. It will become quickly apparent why some auto salespeople and some insurance producers seem to be naturally successful while others ride high and low waves of success and still others struggle in mediocrity. For purposes of comparison I will call these two the "Dynamic Duo" even though they represented two different car manufacturers and dealerships.

THE FIRST CLUE

The first indicator that something was different about these two salespeople was their demeanor. They were both "laid back" and seemed happy to see me. They were more interested in what I wanted than in what they had to sell. They easily and casually pointed out the weaknesses in their cars compared to the competitors, as well as the strengths.

Compare this to the "land sharks" who attack you at the dealership door. Their initial inquiries are to "qualify" you as a potential customer. They are asking qualifying questions, not expressing an interest in your desires. When they talk about their products it is always concentrating on the strengths (downplaying any weaknesses) and demeaning the competitors. The Dynamic Duo acted as guides and helpers. They seemed to truly respect their competitors and would not attack them. The sharks acted like hunters, circling their quarry, looking for an opening to attack.

Similar activities are encountered in the insurance industry. We may attract customers through referrals or through pro-active marketing. However, most prospects are as inundated with offers for insurance as they are accosted by the advertisements about the variety of new cars available. The only difference is that our industry contacts them directly while the auto industry spends its money on advertising trying to get prospects through their dealers' doors. The fact remains that, in many cases, the initial human contact is the time during which the prospect is won or lost.

How do you treat your prospects the first time you see them? Do you ask for their policies in order to have a point of comparison? Do you "survey" them to identify their needs and requirements through a pre-defined form? Do you chat about life, family and weather to find out their "hot spots"? Or do you ask them "How can I help you?" as did both of the Dynamic Duo during their introduction?

The rule in sales is that you ask the simple question and wait. The client will eventually tell you what he's looking for, what his problems are, AND what the solutions are that he is seeking. You may or may not be able to help him. But if you are as honest as the Dynamic Duo you will find that you earn a friend as well as a client (whether you sell him anything or not).

THE SECOND CLUE

Both of the Dynamic Duo knew that money certainly IS a critical part of my buying decision, as does every insurance producer on the street. However, neither concerned themselves with the money matter. They simply said that they would do the best that they could and would certainly understand if I chose another product if a similar one could be found at a substantial price difference. Neither even took the time to qualify me by asking whether I would buy from them if their price was lowest! After all, the Dynamic Duo understood that price was not the primary consideration in buying a car (even if I did not yet understand that). They assumed that similar products would cost about the same amount and that I could always find a little better deal if I was of the mind to "shop until I dropped". And since I was not buying a car by phone or through the Internet (yet) I was probably searching for something besides just price.

The greatest failure we see in insurance producers is the "Soft Market Mentality" that tries to sell insurance by claiming that they can save the customer money. While the customer, himself, may believe that the price is the only difference, the fact that hundreds of insurance companies sell thousands of similar products at prices that vary greatly reflects the fact that people end up buying something other than price alone. Waive aside the money issue by confirming that, of course, you will provide the best price possible. Some very successful producers even admit that there are cheaper versions of the product and service available in the industry - that is, if the customer is looking for cheap instead of comprehensive coverage with unquestioned service standards at a reasonable cost. But, brushing the price aside quickly with a caveat that a reasonable price should be expected and will be provided, the producer is able to get into what the prospect really wants - and fulfilling those desires sells more insurance (and cars) than a policy or specs ever did.

THE THIRD CLUE

The Dynamic Duo cared more about my needs and desires than they did about making a sale. They were always there to give me more information and were never pushy about closing. However, each of them offered a soft close when they felt that all the questions were answered. They each left the impression that they sell enough cars to make a good living and that my sale was more important because I would be a satisfied customer than because they had to make quota.

The other car salespeople with whom I dealt ranged from one telling me that I couldn't afford the payments, to a second who tried to 'high pressure" me into buying a specific car that was available (instead of the one I desired) because it was the end of the selling month, to another who provided me with brochures and a quote and told me to call him if I was interested.

Similarly, I have encountered insurance producers who 'qualified' prospects right out the door. Others have been so pressured by finances that every prospect could feel the stress under which the producer operated. And how many "quoters" have we seen who wonder why their great rates haven't converted prospects (who end up taking them to other agents with whom they have relationships)?

I congratulated both Evelyn and Rob and fully intend to commend them to their sales managers. They are rare finds and are assets to their dealerships. From whom did I purchase my car? You'll have to ask me when you see me! One stressed getting the most car for my money. The other stressed performance. Each stated their case and let me decide for myself. They made themselves accessible whenever I needed clarification and I didn't feel the need to comparison shop against them for similar models.

We need to re-caste our producers in the same mold as the Dynamic Duo.

1. Lay back. Be relaxed. Make friends. Show that you are concerned about the customer's well-being, not about the sale.

2. He who lives by price, dies by price.

3. Concentrate on the needs of the prospect, not the technical aspects of the insurance program.

Yes, you may sometimes get taken advantage of, but it is worth it to feel good about yourself, your motivation and your professionalism. Finally, those who follow these simple rules will find that they consistently sell more insurance. The word about a caring professional spreads quickly.