Price Marketing Weakens Agencies & Brokerages, Disappoints The Customers And Is The Worst Strategy Possible For The Insurance Agent & Brokerage
- The price driven customer is perfectly suited to the direct channel.The peace of mind driven customer is perfectly suited to the agency/broker channel. As industry wide analysis will show you the price driven customer is expensive to get and easy to lose.
- The efficiencies of the direct channel are well suited and well designed to generate value from that demographic.The opportunities for depth of relationship and value added communications make the peace of mind customer perfectly suited for the agency broker channel.
But doesn't price still matter? Yes, of course, but perhaps not nearly as much as you may think it does.
My friend Brady Polansky from EzyLinx, shared what many may consider to be shocking statistics based on a massive study of consumer behavior.
57% of consumers who call independent agencies do not take the lowest quote provided.
Rather, they choose insurance that costs between 19% and 53% more then the lowest quote provided. (Imagine what that could do to your top line revenue!)
Moral of this story: it's a naive assumption to think that all consumers are the same. They're not. Pursue the ones who best fit this channel: the people who actually care what insurance does.
Remember when we took pride in saying that "insurance is a relationship business?"
The top 5 or 10% of your customers probably feel that relationship. But recent research from Deloitte makes one thing very clear: the majority of an agent's customers don'tfeel that relationship.
Agencies have simply outgrown the old-school methodologies of getting and keeping relationships. It's too expensive. Besides, that's not how customers relate to business anymore.
Consumers expect a well crafted digital communication strategy with their vendors. And agents and brokers can use today's digital channels to deliver value.
Using modern technology, they can nurture their customers. They can help protect them. They can make them smarter insurance consumers. They can help prepare them for disasters. They can help prevent accidents, injuries and casualties. They can offer useful products. And they can follow each customer, one-at-a-time, and guide their customer journey, from the "I want a quote" to "I love my broker."
Price marketing is fine…for the direct channel. Don't copy them. A winning strategy for their channel is a losing strategy for ours.
But, if relationship and value are the pillars of our promise, deliver on it. Today's tools let you deliver on that old school promise…with new school technology.
The Ultimate Solution For Maximum Growth (And Massive Customer Satisfaction) For Agents & Brokers
Is this an impossible situation for the leader of a modern insurance agency or brokerage?
If we don’t have ‘price’ in our quiver, just how do we make a difference in the lives of our customers?
If, in fact, they value relationship – that sense that they have an advisor and advocate in their corner – how do we deliver that? The days of glad-handing our clients around town are over.
- The old methods – one on one marketing and nurturing – are over. Those methods are dreadfully expensive.
- Most agents and brokers of today have a book of business that’s much larger than the average firm of a generation ago. It’s folly to think we have a ‘traditional’ relationship with them. (How many times have you passed a customer in the vegetable aisle and they didn’t know you…and you didn’t know them.)
- Besides, the last thing today’s consumer wants is a random telephone interruption from their insurance agent. (They want you there…when they want you there. Not when they’re at work. Not when they’re having dinner.)
The answer is simple.
Our competing channels – the direct channel and the emerging digital channel – uses technology against us.
But, today, agents and brokers can fight back. Using their own technology. Technology that delivers meaningful communications. Technology that treats everyone like an individual. Technology that strengthens your brand. Technology that deepens relationships.
Technology that connects the data in your agency management system to a marketing system that fulfills the inherent promise in the agent-broker channel: that we’ll be there…that we’ll protect…that we care.
For more than 20 years, Agency Revolution has studied what makes a successful independent Insurance Agency or Brokerage. While some things change - tactics, techniques, even consumer behavior - others remain the same. Leaders must constantly assess the shifting insurance environment and adapt to remain competitive. With Agency Revolution's new ebook: "4 Reasons Insurance Agents & Brokers Should Never Sell On Price: Why Price Marketing Weakens The Agency, Disappoints The Customers And Is The Worst Strategy Possible For The Independent Insurance Agent & Broker" the dangers of an all too common strategy and what the independent insurance channel must do to succeed. This blog post is an excerpt.