Why Should I Do Business With You?

Why Should I Do Business With You?

A fair question and your response is critical to the future success of your agency.

I just finished recording an upcoming two part webinar on value added selling. I’m pretty sure there will be some members and their staff who will laugh at the idea. They prefer price selling. I wonder if that’s because it takes very little skill to sell on price. It just requires the ability to quickly develop a quote and take an order when your premium is lower than the competition. Not a lot of skill required there.

So why do consumers fall for this dangerous and irresponsible method of providing insurance? The truth is many consumers don’t understand enough about insurance coverage to make good buying decisions based on protection so they rely on price. They also fail to acknowledge the possibility of a serious loss. It’s easy to buy on price when you anticipate never having an accident or at best a minor fender bender. That belief is reinforced by over a billion dollars in advertising designed to reinforce the idea that insurance protection is a commodity to be bought solely on the basis of price.

The truth is other than compliance buyers (people who buy to comply with state law) or the occasional irresponsible consumer most people want to be properly protected. They simply don’t understand the various nuances of coverage and how it may affect them and their family. They choose to believe that all insurance is essentially the same and buying the lowest priced policy is the smart thing to do. Buying protection this way is like playing Russian roulette with your family’s future.

That’s where the value of independent agents and brokers comes in. We are all about providing knowledge and insight to the process of buying and benefitting from insurance. It’s what makes us different and the reason consumers should do business with us. It’s usually at this point where the title of this article comes in and consumers put you on the spot. My question is: are you prepared to tell them why they should do business with you and do you have the commitment, skill and follow-up necessary to make your answer a reality.

Value added selling and providing proper protection takes hard work, courage and commitment. It’s all about helping consumers make an informed decision on what to buy and where to buy it. It’s also about providing the follow through and follow-up service you promise as well.

Why do so many agents and brokers avoid this method of providing coverage and service? Is it a lack of belief in the product? Do they fear the buyer rejecting the work and value they are offering? Have they never been trained in selling value and peace of mind coverage at a competitive price? Maybe it’s just easier to play the price game. If that’s the case why do we as independent agents and brokers spend so much time and money investing in education and knowledge?

There are two issues with selling based on price. The first is that you’ll never be successful selling price against the real price sellers. The have the resources and systems to ultimately win that battle and current market share confirms this. Even if you are lucky enough to win business on price, how long do you think you’ll keep that customer? If they have a serious loss and the coverage is not there don’t you think they might come after you under your E&O coverage?

The second and more important problem with price selling is you have failed the consumer. Yes, you can justify your actions by saying that it’s the consumer’s own fault they aren’t properly protected and you would be technically correct. But if you’re not going to try and educate consumers and assist them to buy and maintain proper protection why continue as an independent agent or broker? You should believe enough in the value of what you do to make the effort to provide consumers with proper protection at a competitive price. If you don’t believe in yourself how in the world do you expect consumers to believe in you?

The choice is yours. You can exercise the professionalism and conviction necessary to properly write protection or you can go the easy route selling price and expect to be put out of business by the direct response carriers. Sounds harsh and it is, however that’s the reality of where we are today.