“The only thing we have to sell is price-competitiveness.”
“The only thing the client cares about is the lowest price.”
“They already have the right coverage. We have to compete on price.”
If you believe these statements, please stop reading – pick up a magazine or a good book or lose yourself in that ‘reality’ show on TV. This article will bother and frustrate you. Since I write about this subject frequently, I know that I will get between 10 and 20 calls and e-mails (firstname.lastname@example.org for those of you who MUST straighten me out) about how I am not living in the real world.
Unfortunately, I have and do run agencies, they successfully write a substantial number of new clients and, while price is important to each and every one of them, that’s not why they buy from us.
Customers buy insurance from an agent because 1) they grow to trust him, 2) they feel he understands their situation and can HELP the customer, and 3) his price is competitive.
Although each of you still reading this is (I’m sure) a wonderful person in his own right, prospects don’t know this when you are introduced. You are just another one of those salespeople trying to get them to waste their money on insurance that they must have, don’t really need and will be a hassle if they ever have to use. You ARE the insurance company (as far as they are concerned) and, like the IRS, no matter what the carriers say, the customer KNOWS that they are not there to “help” them – the insurance companies are there to make money. And the way the companies make money is by collecting insurance premiums and not paying more in claims than they have to.
Is there anything in the prior paragraph that is not accurate? So how do you overcome this and get the prospect to buy insurance from you? The answer is simple – DON’T TRY TO GET THE PROSPECT TO BUY INSURANCE FROM YOU!
Instead of selling, approach every prospect like a consultant would – you’re there to help him. The approach I use for consultative sales is to concentrate on protecting the client’s assets. Isn’t that, after all, what our jobs are supposed to be? The client doesn’t know that you are approaching him in this way – you must present him with a model that concentrates on his needs, not on your personality or your products. And you must keep approaching him with this model until he understands your motives. Never fold to a prospect telling you that he’ll give you a chance to quote. Your business is not quoting. Your business is not selling. Your business is making sure his assets are protected.
Sometimes the Best Sale is NO Sale.
I’ve seen a surprising number of clients won over by agents who review assets and confirm that their current policies and coverage is appropriate. The agent does not ask for a fee. He does not suggest Broker of Record letters. He truthfully and honestly tells the prospect that his only concern is that the client is properly protected. If the current coverage is adequate and the price is fair, the producer will say so and offer to review the account again in a year. Meanwhile, since the agent is already there, he suggests that he also review the client’s other insurance policies to confirm their appropriateness. In the process of NOT selling, the agent strikes his greatest success – he makes a friend and confidant. Instead of becoming the ‘next’ insurance agent for the client, he becomes the client’s consultant, risk manager and friend. That is the true position in which you want to be found for every new client within a year or two from the time you meet. Your greatest challenge is working through the client’s perceptions and baggage with respect to you as an insurance agent. Once that bridge has been crossed, he will ask you (with greater frequency and urgency) to take over his insurance. Acquiesce only when you are convinced that you have made a believer out of him – that you are no longer perceived as the guy who “shopped” the insurance best this year.
He Who Lives By Price, Dies By Price
Of course even consultative salespeople must shop for fair and competitive products. If your offering is 25% higher than the client’s current program, are you doing him or you a favor by replacing his existing coverage with yours? Are you really providing him proper asset protection? If not, don’t push the issue. Price is transitory while loyal customers (not built on low price) are not. That other agent will not always have the lowest price and your consultative approach will have the client looking for ways to join you customer family. The heading title is a truism. If you sell on price, you will eventually lose your customers on price. Sales oriented agents don’t believe in loyalty because they have been burned so often by long-term clients leaving them for the next $100. It upsets the agent because he successfully lowered or “managed” the client’s premium for many years. Yet the only concentration was on price, so the client felt no compunction about letting that other agent in the door to provide a “free” quote, as well. After all, you’ve got to keep your agent honest, don’t you?
Consultative agents have “fired” clients who suggest that the agent is not working hard enough to manage the client’s premiums. That’s because consultative agents are actually doing what customers SHOULD expect from an agent – reviewing and analyzing all aspects of risk and determining both the best coverage and the best carrier for the client every year. If the client doesn’t believe that, then you, as the agent, haven’t communicated what you do sufficiently, or the client has the wrong agent, or the agent has the wrong client. If the latter reasons prove true, a parting of the ways is much preferred to constantly pushing underwriters to ever lower rates. This does not make the underwriter your friend and won’t save the client in the long run.
Consultative sales are not for everyone. You must have the confidence to sell without the crutch of price as your only weapon. But if your goal is to HELP the client, rather than to sell him and if your method is to make friends instead of impress the prospect, you may be the right material for a consultative salesperson.