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Agent to Agent: Sell Value, Not Price

David Connolly Photo - 200x250px.jpgBy David Connolly
Founder, iQ Consulting

As a consumer, do you always buy the cheapest product or service you can find? If you are like most people, probably not. Do you gravitate towards the most expensive item you can find? Unless you have money to burn, it’s a once in a lifetime deal, or the quality is beyond compare, again, probably not. The great majority of us try to find the best quality for the best price and end up being what I call value buyers. Your insurance buyers are exactly the same. They want good quality coverage and good service for a good price.

• Why is it then that we, as agents, consistently lead with price?
• Why do we play the price game established by clients who over the years, under our tutelage, become great negotiators?

I believe there are three main reasons that answer these two questions. The first is psychological, the second is factual, and the last is a skill set that is missing.

Reason 1: “I really don’t bring that much value to the table.”

I have worked with thousands of insurance agents and the great majority of them are really very nice people I characterize as hard working, earnest, ethical and humble.

When I ask them what it is that makes them better than their fellow agent, I get the big doe eyed stare. When I ask what makes their agency better, they all give me the same list, and none of the items on that list have to do with them personally. The truth is, the great majority of producers suffer from mind trash and self esteem issues related to our jobs. It starts when we first enter the “insurance industry” because none of us actually said as children, “When I grow up I want to be an insurance agent!” It continues when we learn through cold calling, social interaction and negative experiences that no one wants to talk to us and no one understands or respects what we do. We are treated at best like commissioned sales people. Which we are and is another reason why I prefer fees.

I know what this feels like and I can tell you that it’s all mind trash that we create. We create it because (a) we continue to deal with price buyers even though we know it’s futile, and (b) we don’t sell value which leads to a self-fulfilling prophecy. I can’t help you overcome your own mind trash, but I can give some advice that might help:

  1. Don’t invest one minute of time with price only buyers. Walk away like they are the plague, because they are.
  2. Start selling value.
  3. Visit with your best clients and have them tell you why it is they do business with you.
  4. Take a look back at all of the services you have provided for your clients. Take a look at the claims that were paid that saved businesses and families from ruin.
  5. Look yourself in the mirror and say, “I don’t bring much value to the table” and see if you still believe yourself.


Reason 2: Agents Versus Consultants.

Fewer than 10% of the agents I meet say that their primary purpose is to uncover problems and to find and provide solutions to help their clients run their businesses more efficiently and profitably.

Most believe their responsibility revolves around the insurance policy, and their activity reflects this. Most agents spend the great majority their time reviewing policies, finding gaps, filling gaps, filling out applications, marketing new and renewal business and their CSRs take care of certificates, endorsements and bonds. All of these services, other than the bonding, service the policy not the client.

Very few agents and agencies I meet say they have pro-active service platforms, use service schedules or provide value added service like claims, loss control, risk management stewardship etc. The great majority of agents and agencies ARE all the same, and can’t claim they make a true difference in their clients’ businesses until a claim is paid. Most are reactive, most sell and service insurance products, most are not consultants, and cannot claim they provide any significant value to their clients other than saving them money. When agencies and agents move from re-active to pro- active and from insurance agent to consultant, they can claim differentiation and easily sell the value they bring at a higher price. The conversation becomes a very different conversation, and both your value and the level of respect you receive grows.

Reason 3: Value Propositions

Even after agencies develop significant value added service platforms, they still have a difficult time effectively articulating the value these services and their expertise represents to the prospect or client. They are challenged when it comes to communicating how they can positively impact their clients’ businesses.

I spend a great deal of time helping clients develop service platforms and coaching their staff how to articulate their advantages. It takes time, effort and a desire to become excellent at your job. Value propositions are one of the most powerful forms of communicating true differentiation, because they clearly articulate the service, the process, the value and the end result to prospects and clients in language they understand. Constructing value propositions is a four step process that begins by creating a clear and understandable name for each service you offer, like “Claims review” or “Market analysis.” Step two involves learning to effectively and efficiently describe the process involved during service delivery. The third piece is being able to quantify and qualify the potential benefits directly related to the service. Finally, one must be able to describe the end result following successful conclusion of the service.

Selling value instead of price requires that we get rid of our mind trash, grow from agents into consultants, service the client—not the policy, and learn to effectively articulate our value.

David Connolly is the founder of iQ Consulting. They work with the top 100 agencies and brokers in the US and Canada and have trained thousands of insurance professionals.

Want to learn more about selling value, not price? Join PIA and iQ Consulting for our October 21st webinar, Selling Value... Not Price, or purchase the archived recording if the webinar has already taken place. This webinar is presented as part of the PIA Agent Success Acceleration Program. PIA and iQ Consulting have created this sales-focused, e-learning program for insurance professionals in CO, DE, IL, LA, MA, ME, PA, RI, SD, WV, WY and a growing number of states.

For more information on developing service platforms, creating value propositions and selling value not price, visit the PIA ASAP webinar archives at www.piaasap.com.