Sales Strategies in Difficult Times

Price, Renewals, Cross Selling and More

The weak economy and continued soft market still has a stranglehold on insurance agents. Most agents are doing a good job on retention. However, lower premiums (and commissions) coupled with lost accounts due to business failures have set most agencies back. New sales are the only solution to moving forward.

So what can be done to improve sales? The bottom line is that agents need to do something different in order to get back to a growth mode. Here are some ideas that could help.

Price Sensitivity

There has never been a time when insurance sales have been more price sensitive. Clients are hurting with the downturn in the economy and the financial crisis. Banks are just unwilling to lend any money to just about everyone, no matter how astute.

Even if a client has felt its agent had done a good job, no expenses or relationships are sacred because revenues are down and budgets are very tight. Most employers have done some layoffs and are still worried about expenditures.

The best thing for an agent to do when prospecting new clients is to find out what price the client needs to be at for the prospect to consider a move. There also has to be in addition to the right price some noticeable “pain” or clients may be afraid to switch their insurance coverage.

Be Renewal Savvy

Agents need to be prepared for their clients to be cutting their insurance coverage. They will be asking how they can save money and won’t be interested in being sold additional coverage, even if the agent feels they need it.

Because of the economic downturn, many clients have a lower rating basis. Unfortunately the commissions earned are also lower. This is hard on the agency, since there is the same amount of work involved on the account. There may even be more work if clients are continually willing to “shop” their coverage even midterm for lower costs!

So when the client is called on for renewal info, be sure to know where the renewal pricing needs to be for renewal to occur. Be first to make suggestions, such as higher deductibles, loss prevention activities, additional coverages that may be needed if these deductibles are increased, which can save a lot of money for the client. It costs you money, but you gain in “relationship capital” in the long run.

Be There for Clients/Prospects

These are uncertain times. What is it your clients need right now? Find out. Most clients are looking for handholding from their agents both when a new client is written, as well as at renewal time. Many are even dumping their health coverage for their employees, so that other expenses can be paid.

If you are there in their hour of need, the clients won’t forget you this is protection time and advisers should be supporting their clients through these hard times.

Build Relationships Now

Accounts won only on price will be lost on price. For new prospects focus on building a relationship first, then ask about their insurance. More importantly than selling a new product is to make sure to just “be there” for your prospects, as well as your clients. Clients need to keep their coverage and not go bare, if they can do it. This includes keeping health coverage for their employees.

Great Time to Cross Sell

If premiums are down in one area, this may open up an opportunity to provide needed coverage for your clients and prospects in another area. The budget may be the same and due to the lower rating basis, the agency may have some “room” to insure something else. An example might be adding on coverage for business interruption or a bond, even umbrella or employment practices liability insurance policies. Other lines such as employee benefits and life insurance are also important to offer to your property/casualty clients at this time.

Charging fees for value added services are great ways to add revenue as well, which includes human resource consulting work, workers’ compensation claims administration, loss control and risk management. These types of services are for larger accounts and some agencies outsource these services if they cannot be performed in-house.

Creative Marketing, Less Referrals

The same old approach to sales is not as effective as it once was. To get new business agents need to think out of the box and not expect referrals to just happen. Everyone is desperate to just stay alive in this marketplace. Larger agencies seem to be hurting even more as their average size of account is larger. There have been a number of bankruptcies, merger and some businesses have just stopped paying for coverages.

Finding new ways to “market” is imperative at this juncture. Showing support in the community, going the extra mile with clients on claims situations, asking clients for help in writing new business, advertising more and writing smaller accounts that will hopefully grow when things change are all ideas of new ways to market.

Summary

These are difficult times, however, the astute agent can use these ideas to have a leg up on the competition. It is most important to be prepared to assist your clients and prospects through the rough waters so that they survive and keep you as their agent in the future.

Topics Agencies