Dollars and Sense: Selling on Value, Not Price

May 3, 2022

Stacks of coins getting increasingly higher with a jar of coins at the end of the row.

Safeco Insurance

Unless you’ve been living under a rock, the near-deafening drumbeat of price-focused insurance advertising is impossible to miss. This onslaught, supported by multi-billion-dollar budgets, serves up one key message: Insurance is a commodity. Price-focused direct carriers don’t talk about coverage because they want consumers to believe all policies are the same and that the only differentiator is price. They want consumers to believe that cheap insurance is good insurance.

Let’s be clear: Saving money is great! No one wants to pay more than necessary. But saving a few bucks today isn’t a good deal when it comes at the expense of proper protection and an unpleasant surprise after there’s a claim.

You know this because you work in the industry. But the average consumer does not know this. Many consumers have never had a conversation about protection or coverage. That’s why quoting against their existing dec page is risky business!

As an independent insurance agent, you have three superpowers: ease, choice and advice. Educating customers about coverage and price is your chance to stand out.

Here are 4 questions to ask.

1. How do you know you have the right coverage?

This will let you assess their knowledge of the policy and whether their agent discussed their coverage. The goal here isn’t to criticize or make your customer uncomfortable. Assure them it’s OK if they don’t know and that you’re here to help.

2. Tell me what you mean when you say you want to save money?

Most customers are dismayed by unanticipated expenses, especially substantial ones. This question assesses risk tolerance. Do they mean they want the skinniest policy possible, even if they’re out of pocket tens of thousands after a claim? Or are they looking to ensure they aren’t paying more than they must for the right coverage? Remember, in their mind all policies are identical and absolutely everything will be covered. Understanding their risk tolerance helps you steer the conversation toward the right coverage, even if it’s more expensive.

3. Have you ever filed an insurance claim?

Claims make or break a customer experience. Anyone who hasn’t filed a claim in recent history likely doesn’t appreciate the importance of a carrier that does the right thing for its agents and customers. Contrasting a carrier’s outstanding service versus a cheaper policy with not-so-good service is a great way to shift the conversation.

4. Who is your umbrella policy with?

This question isn’t for every customer, but it’s for a lot more customers than you think. Homeowners and renters alike need umbrella protection, as do households with children, pets and more. This question positions you to discuss the importance of liability protection and how an umbrella provides peace of mind for very little premium. Even if you don’t sell an umbrella, you’ll likely upsell higher limits.

When you win on price, you also lose on price. Selling on the value of coverage differentiates you as a risk advisor and you’ll be rewarded with higher retention, customer satisfaction and referrals.

Cover of Smart Choice Magazine 2022 Issue 2 titled "E&S: Clutch coverage in a changing market."E&S: Clutch Coverage in a Changing Market

E&S business has surged in the last one to two years due to the firming market as a result of economic uncertainty, inflation, low interest rates, and more. And now is the time to seize
the opportunity to bring on more clients by offering diverse and custom solutions through these types of markets. Check out the 2022 Issue 2 of Smart Choice Magazine for tips on how.

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