Un-commoditizing Insurance

What makes you better or different than your competition? Ask every agent that question and you’ll get the same answer. I’m not kidding. Don’t believe it? I’ve worked with hundreds of agencies & brokers in North America. The first question I always ask them is. “What makes you better or different than your competition?” Without fail they all give me almost the exact same list.

Why? Are we that uninspired? Are we that predictable, boring, brain dead? I believe it’s none of the above. I’ve worked with some pretty amazing minds and very creative people in our industry. It’s not what we do, or how we do it that makes us the same. It’s how we describe what we do that creates the problem. Simply put, what most agents say makes them better than the competition, actually makes them the same. That is what leads to the commoditization of insurance.

Also, the bar is set pretty low for us by our clients expectations. We don’t have to do much to impress them. All most clients want is for us to react when they call. The phone rings… we react. The client calls for certificates or endorsements… we react. A client files a claim…we react. Most agencies have been trained by their clients to be VERY good at reactive service, which again, leads us to Commodityville.

Conversely, most agencies aren’t strong at Pro-Active service. They don’t anticipate client needs, and they fail to distinguish themselves from the crowd. Those who fail to differentiate will be forced to sell on price because sameness creates commodity.Remember, price is price, and all things being equal, the incumbent wins all ties. But, if you can offer something truly different or unique, now you have leverage.

How do we un- commoditize ourselves?

We Differentiate: Differentiation creates dissatisfaction through comparison. Only when our prospects realize what they could have with us VS what they currently receive will they experience buyers remorse and seek to make a change. Our job is to be that “something better” in the mind of the buyer, by being different and by offering more than they are used to getting.

Differentiation identifies real opportunities. If you compare yourself to the incumbent, and you have no true advantages, and no real differences, don’t bother investing time in a proposal because you’ll lose money. But, if your strengths, or differences match up favorably to the incumbent’s weaknesses you have a good chance of creating dissatisfaction and winning.

Differentiation creates home field advantage: When you & your prospect are focusing on your differences, and your advantages, it keeps the other team off the field, and directs conversation towards your strengths, and away from price: The client realizes he’s not comparing the same thing. “Apples to Apples” doesn’t apply.

The problem with most producers is we all feel like we’re a moving target and we have to keep the throttle a full speed or we’ll get shot down. If we just slow down a bit and take the time to create differentiation, we’ll write a lot more business.

How to differentiate: In my opinion the differentiation process begins by applying the universal truth “Nothing is good or bad, or better or worse except by comparison” to your sales process. This universal truth will change your entire approach to sales, and has had a significant impact on my career, and on the success of the agents I coach.

In the insurance sales process, what are the four things we can compare? Price, product, service, and relationship. Price is price, and insurance is insurance in the minds of most prospects. Also, coverage can be changed, or policies made to appear similar. That leaves relationship and service. It’s difficult to compete on the incumbent’s relationship if it’s good. That leave services.

The truth is, unless the incumbent relationship is bad, or we have amazing pricing, service is the only arena where we can win. Our advantage is created by developing pro-active services that anticipate the needs of our prospects, and by learning how to communicate those advantages to position yourself to be the point of comparison. To create an un-fair comparison. This process requires time, research, creativity, and participation. The result will be immediate, obvious and significant.

Creating advantages: Take an agency inventory…Your people are talented and have skills & creative energy. Do a skills assessment. Brain storm, ask them to develop products and services around their specific talents. How can we use these talents and skills to offer pro-active services & solutions for our clients? Make a list and keep track, and learn how to communicate what it is we do, why we do it and what it means to the prospect. A white board is great for drilling down on what we do and how we do it, that makes us better or different.

Competitive analysis: Do a true in depth study of your competition. Know them as well as you know your own agency. Get to know their strengths, their weaknesses of their agency and their individual producers. Get the information by asking questions and doing research. It takes time, but it really creates an unfair advantage when you know them better than they know themselves. Use every source available to you.

Learn to compare and contrast: Create a competitive advantages for each of your competitors. Drill down on your specific advantages to determine what you can offer that’s different or better. In new business interviews, ask questions that lead the conversation towards your strengths and away from the incumbents. Effectively articulate your advantage by comparing our creative pro-active services to their typical re-active services. Ask your prospects, how does this compare with what you receive now?

Creating and articulating competitive advantages will make the difference you need to win more business.

Good luck, and good hunting!

Topics Agencies