Do Your Customers Know What You Did Last Summer?

Consider this story. Fifty years ago a relatively unknown entrepreneur opened a family-oriented entertainment complex in Southern California. He decided to place signs at each attraction or ride indicating the expected wait time. His peers thought this idea was ridiculous. Why would he make the wait time any more obvious than it had to be?

You may have heard of Mr. Walt Disney. He decided to surpass the standards set by his own industry, and exceeded those expectations by truly understanding what his customers wanted. Simply put, his customers very much appreciated having expectations set on the front end, before getting into the line then finding out about the wait. This way, they could make their own decisions and if the wait was 60 minutes for any given attraction, they did not become frustrated because they were told from the beginning. I think he made the right decision.

The moral of the story is to not be limited by the paradigms of the industry. A “paradigm” can be thought of as a set way of doing things or seeing things. There are many in our industry, none so common as the paradigm about price. Many sales people do not understand how to win the business when their price is slightly higher than their competitors; therefore, the likelihood of closing the business mostly relies on how cheap the price is for the customer.

I call it the dartboard effect. This effect occurs when the salesperson arrives at the point in the sales process where the price must come out. The salesperson “announces” the price and simply hopes that he or she has hit closer to the center of the board than their competitors. If so, they expect to get the business. If not, they expect to lose the business. It’s like throwing darts at dartboard while wearing a blindfold.

Folks, there is a way to remove the blindfold, walk face to face with the dartboard (customer), and strategically place the dart (policy) on the board (customer) as close to center as possible (the center represents the likelihood the customer will purchase from you).

Are you with me? If so, removing the dartboard effect from your sales team will improve your closing percentage. My proposed solution for achieving this is called “building customer advocacy.” Here’s how:

Let’s say your agency is currently positioned to win four out of 10 quotes, based on the competitiveness of the products you sell. Let’s suppose that you cannot win more than four out of 10 unless your customers choose to do business with you even when you offer them a higher price than your competitors offered them.

How many of your customers in the past 30 days were offered a lower price from someone other than you? How many of those customers chose you anyway? If half or more chose you, you can stop reading now. Congratulations. You understand the idea of customer advocacy.

For those that are still reading, I believe there is a way for you to win business even when you are not the lowest price. The challenge you face is that many times, you don’t know what price you are competing against. This is when the dartboard effect rears its ugly head.

So, quickly total the number of customers this month that passed on your products because of price, let’s be modest and take only half of that number, multiply by your average policy premium amount, and that’s the amount of dollars per month you could possibly add to the bottom line. Here’s how.

Define your agency’s value proposition.

What service do you provide that customers cannot get anywhere else? I’m not talking about friendly service, competitive pricing, and a caring attitude. I’m talking about a service that would blow the minds of your customers. I’m talking about something that until now, you may have considered to be ridiculous.

Here’s an example. I recently spoke to an agent that offers his customers a videotaped walk-through of the property being insured. He says that his customers appreciate this service because at the point of a claim, they feel as if “their property could be very well represented to the company, hoping to expedite the claim payment process.”

Does this service cost time and money? Absolutely. Can most property owners get this service from anywhere? No way. Result: The agents’ closing percentage improved from 60 percent to 90 percent when he adopted this video service, far outweighing the cost of this service.

Moral: Figure out what you can do that cannot be received anywhere else.

Find customers that value this service.

Once you truly discover what you do that customers cannot receive anywhere else, prepare to go and find customers that want this service. What’s the best way to do this? Ask great questions. Spend time with each customer asking what’s important to them. I absolutely agree that price will come up, and it should. But don’t stop there. Continue to probe and dig for what is important to the customer.

In the video walk-through example from above, most customers indicated that prompt and accurate payment at the time of a claim was very important. When customers committed to this need, the agent was positioned to say, “So if I can provide a way above and beyond all expectations to help ensure quick and accurate payment, would you choose my agency?”

Most customers said, “Yes, tell me how.” And the rest is history. The video walk-through service itself did not increase the closing percentage, but more specifically, it was the agent’s ability to discover the need for it.

Moral: Treat every customer as a new opportunity. Do not make assumptions. Yes, they may all have price as a need, but take the time to dig further into their needs.

Create advocates.

If you communicate with your customers in a way that truly shows your interests in their needs (usually done by asking lots of questions), most customers will appreciate your approach and will be willing to refer others to you. Can you imagine your customers leaving your office, with a stack of your business cards, having committed to giving them to friends and family members?

Customers will not do this if they have the same experience with you they could have had down the street. They must experience something different and unique. They must realize your solutions cannot be received anywhere else. They must truly sense that you care about their needs because you asked so many questions.

If these things occur, you should expect your customers to go and tell others. I believe this will happen even if they choose not to buy from you, which can still happen if your product simply isn’t a fit for them.

Moral: Remember Walt Disney. Raise your expectations. Do not establish your end goal as simply making the sale. Your end goal should be to create customer advocates.

Steps 1 and 2 above are necessary in order to arrive at item 3. If you take the time to complete steps 1 and 2, you will be positioned to reap the rewards of the customer advocacy strategy. According to Glen Godwin, the West Region president for Infinity Insurance Company, “The Customer Advocacy strategy is not about achieving perfection, but having an executable plan for achieving excellence. It is the pursuit of excellence in serving our customers in a way others can’t or won’t that is the foundation of customer advocacy.”

Developing customer advocates is not an easy task. As I mentioned in the beginning, it will require you to break the paradigms established by this industry over many, many years. It will also require you to not be limited to the expectations of the industry, but rather to live up to and beyond the expectations of your customers.

In doing so, you will make the sale along the way, but you will also accomplish much more than that. You’ll develop advocate customers that leave your agency and tell others about you. Their friends and family members will then come to your agency and say, “I know what you did last summer!”-not in reference to your family vacation, but in reference to how you treated your previous customers.

Todd Gober is the director of Education for Infinity Insurance Companies. He leads the corporate training team (Infinity University) which provides training solutions for both the Infinity agents and employees. With eight years of experience in corporate training, Gober began his career with Infinity in 2000 as a business development representative, and launched the University in 2001.

Topics Agencies Training Development