Customers often see insurance — whether it be auto, life, home, or something else — as a necessity. So, when they shop for insurance, they go for the lowest price point. But is that really what you want in a customer?
It's difficult to sell insurance on anything other than price, but not impossible. As an agency, you must work to get customers to see beyond the price point. Insurance is a value-added product, not a budget service. If someone files a claim, they need more than the bare minimum in return.
That's why an insurance agent and agency need to do more to highlight the value your product brings to prospective customers rather than trying to be the bottom-dollar option. Here are a few ways to put value first in your sales proposition.
There are a lot of insurance agents and agencies in the market. When you watch television or click around on social media, you see insurance advertisements everywhere. What's the most common thing you see? “Switch to us to save money today.” It's all about price.
To get prospective insurance buyers to focus on something other than price point, you need to explain the value of what you offer. Value equates to service, coverage, claims handling, and more. It goes far beyond the price point. Your job is to know the real value proposition you're offering — and clearly communicate it.
There are countless insurance companies, and all of them offer similar services to their policyholders. But not all of them deliver those services equally well.
A customer may be looking at one auto insurance policy that costs them $500 per year and another that costs them $750. These policies likely have different coverage and exclusions, not to mention differences in the quality of service from the insurance carrier. So how do you explain to the customer the difference and why the $750 premium is worth the extra cash? It's all about defining and demonstrating value for a customer.
Every agent needs to be an expert in what they're selling to explain the value they’re trying to deliver. Here are a few examples of how you can put your expertise to work to sell value over price in the insurance space.
To sell insurance on something other than price point, you need to understand customer needs. There's a reason a customer is looking to buy insurance, but what is it? When you reach out to a lead and go down the sales process with them, don't just start with a quote. Ask them specific questions such as:
The more you learn about your customers, the better you can tailor an insurance product to suit them.
For instance, say you have a prospect looking at auto insurance who commutes one hour to work each day on the highway. Their coverage needs are higher than someone who works from home and drives just a few thousand miles each year. You can use historical data on auto accidents to drive your discussion with the customer.
When you speak to the unique situation of each individual as you work through leads, you will gain trust and help your prospects to see beyond the insurance price point.
Simply making a sale isn't enough. This is what drives the focus on price points and nothing more. As an agency, you need to educate leads about the products they're buying.
To start with the education process with your customers or leads, break down information into bite-size chunks. Visuals help to make the information easier to digest. Studies have shown that 90% of the information sent to the brain is visual. On top of that, the brain processes visuals 60,000 times faster than simple text. Don't just slap a declarations page in front of your prospects. Educate them with compelling visuals about areas of coverage, claims handling, and discount eligibility.
Every insurance product differs in terms of coverage options. There will be certain states and insurance lines (such as auto) that will have minimum insurance requirements. Once you get beyond the minimums, there are varying levels of coverage, all with a different impact on the premium. How do you equate these different coverage options to real-life situations and needs for your prospects?
One way to do this is to walk a customer through their worst-case scenario insurance claim. For the product they are buying, what is the worst possible thing that could happen? Now if that happens, what would the different coverage options mean to that customer? If they were buying life insurance and the unthinkable came true, would the policy help your family the way you would expect?
Educating prospects and customers on what each coverage level means and how variations in coverage limits affect real-life scenarios is a great way to drive home value.
Insurance is a product you buy but never want to use. When a customer uses their insurance policy, it means that they experienced a loss. When they reach out to you, they hope that their insurance policy will do what is necessary to cover that loss — and that the claims handling process won't be a mess.
The reality is that not all claims handling practices are equal. The Unfair Claims Settlement Practices Act puts minimum requirements in place for insurance carriers, but not all insurers look to go above and beyond this. A cheaper policy might just indicate that a client will only get the bare minimum when they make a claim. And what good is a cheaper insurance policy if it's a struggle to use it?
As an agency offering quotes to consumers, your value proposition should be on claims delivery and service standards just as much as coverage offerings.
Discounts are another way to offer value. The more expensive insurance policy could turn out to be a steal if your customer qualifies for all eligible discounts. Here again, discount eligibility comes down to education and learning more about your leads. Agencies need to understand the habits of their leads to see if they qualify for available discounts.
It could also be that simple changes equate to discounts, which add further value. Say you have a lead shopping for a home insurance policy. That lead may not have a home alarm system but may be considering it. A home alarm system may offer up to a 20% discount, and that could push them over the edge. The savings consumers get from adding an alarm system could equate to a discount that nullifies the initial cost. This adds value to the consumer and puts them in a safer place overall with insurance and home security as a combination.
You want to sell yourself as an agent or agency just as much as you sell the insurance product. Part of building trust is showing a prospect you have been down this road before. Make a personal connection with each potential customer and show them you understand their needs.
Share experiences you've had with customers you worked with in the past in terms of coverage options and buying decisions. Have you seen customers make good and bad decisions in the past about insurance? Have you ever given poor advice? All of this helps you be as clear as possible and add context to the discussion. The more you share and the more you open up, the better the relationship can be.
Insurance value delivery is all about creating clarity and getting beyond the fixation on price point or premium. There is more to insurance than just what you pay for it — it's a product meant to help folks put their lives back together if the unthinkable happens. If what they buy fails to do that, they're throwing money away, no matter how cheap the cost.
Educate each prospect on what you offer, what insurance can do for them, and why going beyond the premium is critical in their buying decision. When you can help a customer understand there is more to insurance than premium, you can help sell them a better product that will provide the coverage necessary.
Nectar is here so you can focus on doing just that — and not on hunting down leads. We connect you with real-time leads ready for follow-up right away. The leads are there for you; all you need to do is focus on selling insurance that provides value. Reach out today to learn how Nectar can help you focus on what matters most.
This article reflects the features of Nectar as of the date of publication. Features are subject to change at any time. This article is meant for informational purposes only, it is not a guarantee that using Nectar will help you achieve specific business or financial results and is not intended to serve as the sole recommendation for any business financial decisions.