The Truth About The Competition

By David Connolly | Your Sales iQ Blog | June 21, 2011

Say what you will about the competition- Just don’t say anything bad. The cardinal rule about not bad mouthing the competition is both virtuous, and professional. Knocking the competition usually backfires, and creates a negative impression on the person throwing rocks. At the same time, it is important for us size up our competition to uncover weaknesses against which we can sell. We just need to approach it in a professional manner that allows our prospects, and clients come to their own conclusions.

In this installment on the topic of universal truths,  I want to explore some truths about the competition, which if considered, may help you win business.  My compilation of competitive data on the insurance industry spans  over 20 years of selling, and 10 years of working with agencies in US and Canada. This last 10 years has given me a unique perspective upon which to compare,  and contrast selling approaches, and behaviors.

Our industry is unique in the sense that we are educated professionals who strive to develop long-term relationships with our clients. It’s not the typical one-off product sale. This characteristic creates significant hurdles to winning new business, but also offers significant long-term growth opportunities if you play the game better than your competition.

Rule #1: Your competition is your adversary

The incumbent stands between you and success.  For you to win, they must lose. Understand, we are asking our prospects to break a relationship. Too many agents enter into a competitive situation not giving incumbency the weight, and respect it deserves. They focus too much time, and effort on insurance products, coverage and price. We are not selling products, we are selling professional services, backed by an insurance policy.  Most important, we are building a trusted professional relationship. The very best agents in our business often win without offering an insurance proposal. Instead, they offer the prospect a better understanding of what they are NOT getting, and offer professional services that help improve their business. They don’t sell insurance, they sell insurance related services, information, advice, and a valuable professional relationship.

Rule #2: Your competition is an unknown quantity

It’s hard to beat an opponent we’ve never seen play. Not understanding whom we are competing against is fatal flaw. This is huge hole in our game  that usually results in us getting rolled. The more we know about our competition, the better chance we have of winning. What are their strengths and weaknesses? What are their habits, good, bad and ugly? I once won a large block of clients from one agent because I discovered his Achilles heel,  something very simple to fix, but very important.  I urge all of you to go to school on your competition and learn as much as you can. Intimate knowledge of your competition allows you to develop a sound strategy to compete effectively. Knowing where your competition is weak allows you to craft questions that expose these weaknesses and direct the conversation towards your strengths. This approach creates an unfair comparison and a reason for your prospect to change . . . other than price. Without this knowledge, quoting is an expensive gamble, and the incumbent is the dealer with the cards, who wins all ties. Knowing the competition can also tell you when you can’t win, and walk away.

Rule #3: Your competition is re-active by nature

With new agency clients, I  always begin with a white board exercise that asks them to list what they think makes them better than, or different from their competition. For over 10 years with very few exceptions, they all list the same things. If what we say makes us different, actually makes us the same,  the only thing left to talk about is price. If we establish price as the only differentiator, we commoditize ourselves,  and we create the price game. The incumbent usually gets last look, and wins. It’s an unfair advantage that is hard to beat.

Re-active services hinge upon a request, or an event such as a claim that requires us to react and deliver a service. Asking questions up front to determine what services are valuable to our client, and positioning ourselves as the best source with the best approach to deliver these  is a major differentiator. The great majority of agencies do not engage in a pro-active approach to service. If you do, you will win, and retain more business.

Rule # 4: Your competition doesn’t understand the power of differentiation.

The great majority of agents do not fully understand the power of differentiation. This is a good thing. It leaves them vulnerable. If you can go to school on your competition, craft intelligent questions that expose their weaknesses, articulate your unique value proposition, and demonstrate a pro-active service approach, your competition won’t be able to counter, or save face simply by dropping their price. You have effectively changed the game. The prospect knows they are not comparing apples to apples. Even if the incumbent gets last look, it is a very difficult situation from which to recover. Most agencies experience good retention because of incumbency. Few enjoy hit ratios on new business that exceed 30 or 40%. Agents who effectively learn, and apply these skills enjoy consistent hit ratios of 60-70% and higher.

Rule # 5: The competition is the only thing that stands between you and success

The approaches I’ve described are simple, but it is change, and change is hard work. Very few agencies and agents are willing to invest the time,  and effort required to replace old habits with new ones. Developing a new sales culture based upon competitive analysis, and a pro-active service approach can take years. It often takes my agency clients 6 months to a year to fully integrate this approach into their sales culture, and I help shorten their learning curve. The point is, once they learn to beat the competition by changing the game, they experience significant gains in new business production and profitability.

Good Hunting

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About David Connolly

David Connolly is the founder of iQ Consulting, and is a recognized industry leader in helping agencies and carriers accelerate and perpetuate growth and retention. Their robust agency services platform provides professional guidance in almost every area critical to the success of your company. iQ provides Agency Consulting and Leadership Coaching services as well as Producer Development through training, In field Coaching and Reinforcement Resources. "Our approach to consulting and coaching is built from decades of personal experience in Production, Sales Management, and Agency leadership" David has coached thousands of Insurance sales and marketing professionals in the US and Canada. David delivers performance based seminars, keynotes, and workshops throughout North America, including David delivers the Agent Sales Acceleration webinar series for the PIA. Register at www.piaasap.com For more information about iQ Performance Consulting visit www.iqsalescoach.com or contact David directly at david@iqsalescoach.com 612-414-5618 More from David Connolly

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