In today’s increasingly competitive business world, employees at companies large and small are expected to do more with less. You’ve probably heard all the budget-related buzzwords when trying to close a sale—more affordable alternative, cost savings, expense reduction, supplier shortlist.
The logical assumption is that the only way to increase sales in an economic environment like this is to discount your product. This isn’t necessarily true, however. The clothing retailer Gap Inc. and some of its struggling subsidiaries recently resorted to deep discounts to lure customers inside stores and move inventory. This hasn’t improved sales as intended; rather, it has had the opposite effect on customers. There is no point in paying full price when a customer knows it will soon be reduced.
Similarly, there is no point in paying more for an inferior product or service. There is a psychology to sales that delves much deeper than price points. This is good news for insurance agents, as policy prices are typically set by carriers and can’t be discounted anyway. The question then becomes: Why should a customer purchase a policy from you rather than your competitor?
Sell Time and Service, Not Products
Doing more with less doesn’t just refer to money. It also extends to the most valuable resource of all: time. A Harvard Business Review article sites examples of time- and service-centered strategies, including some of the salespeople at Xerox who offer clients the ability save time by managing document flow better instead of simply pitching a product. Here’s how to implement the same type of strategy in the insurance industry.
Get to know your customersWhen selling specialized insurance products, your target market is already established. You can narrow a broad market down to a smaller, more successful segment, however, by getting to know your customers on a personal level. Learn their processes and what things are most important to them. Weed out the bargain hunters and focus on the value seekers. You’ll get a better return on your own time investment this by doing this, and save valuable marketing dollars too.
Identify problems and present solutionsOnce you have a pinpointed prospective customers and learned more about their internal processes, identify problems and offer long-term solutions. In a small real estate agency, for example, where the broker is managing a sales team, paying the bills, and completing all of the other day-to-day operations, it could be easy to forget when to renew the company's E&O policy. By offering policy reminder emails and/or automatic renewal options, your service saves the broker time and prevents accidental policy lapses that could cost a significant amount of money in fines down the road. Offering an annual coverage review also saves the broker the hassle of doing this himself, and gives him confidence that he will always have the right amount of coverage.
Conduct a time-cost analysis and expand offeringsWhen selling time and service, it is important to have concrete facts and figures. Don’t directly compare policy prices with a competitor. Instead, show the benefits of working with you. In a large corporation where all expenditures must be authorized through a purchasing department, include the decision makers in the process as soon as possible and present them with the time-cost analysis. A lead purchaser who has been told by the CFO to only approve the lowest price vendor, for instance, will be much more likely to make an exception if you have documentation showing how much time and money the company will save in potential worker’s compensation lawsuits with your expertise and product knowledge at work for them. Leverage your strengths and customers are willing to pay more for your policy, and possibly even invest in other products.
A simple experiment conducted by Stanford Graduate School of Business professors showed that twice as many people were willing to pay more for a glass of lemonade at a child-operated stand when the sign read “Spend a little time and enjoy C & D’s lemonade” instead of “Spend a little money and enjoy C & D’s lemonade,” or a neutral sign that simply read “Enjoy C & D’s lemonade.” The bottom line is that time offers a valuable personal connection with your customers that money does not.
Close Sales With Confidence
When you approach sales using time- and service-centered strategies, customers focus on the benefits of working with you rather than the cost of your product. Evaluate your own sales process, looking for ways to emphasize your customer service. What personal touches do you offer that benefit your customers?
- Do you offer concierge services?
- Does your agency have a 24/7 claims hotline?
- Are there customer testimonials on your website?
Value-added services such as these are a very powerful sales tools that build trust and earn customers for life. Your customers get a better return on their investment, and so do you.