Price VS Value – A False Dichotomy
Are you familiar with the concept of a false dichotomy?
It happens when one is given two options that are presented as the only two options when, in fact, there is at least one if not an infinite number of viable choices.
I’m here to propose that there is narrative in our industry that is founded upon a false dichotomy. It happens this way. See if it sounds familiar.
A local agent loses a policy to (let’s say) GEICO. Then they get on social media to rant about how insurance is not a commodity… and if any of these other agents out here sell insurance like it is, then THEY are the problem with our industry.
So the argument – almost always without an opponent on the other side – sets up the false dichotomy of price VS value.
The “value purists” would have you believe that if every client is not increasing coverage and spending more money with you at the time of purchase than they did Allstate, then you have prostituted yourself for the sake of a sale.
But there are truths we need to recognize.
Truth 1 – Clients buy insurance on price… almost exclusively.
Truth 2 – Insurance has an inherent value that exponentially increases relative to the expertise of the one presenting coverage.
So if I’m saying that neither of these are the correct answer, then what is?
Before we answer that, I believe we, as an industry community have to recognize that for the last 50 years we have grown further and further out of touch with the desires our client base. Inside of the next two years, millennials and generation Z will make up 90% of the world’s workforce. Inside of exactly 3 minutes anyone inside of these demographics can make up their mind whether or not you are trustworthy to do business with.
They have been trained to read reviews, look for personality, check out social proofs, and see if you reflect the values that they care about. They make that decision before they ever make it to you.
So, imagine with me: You get on Amazon and a message pops up, “Hi Dave. We see that your normal time spent shopping on our site is exactly 8.5 minutes. While you’re looking around do you give us permission to attempt to save you $1000 on your car insurance?”
That is on its way my friends. And if you are still arguing with carrier reps that “your clients” don’t want electronic policy documents and can’t figure out how to e-sign, it won’t be long before those same clients choose Amazon over you.
Perception is reality. And our clients think insurance is a hassle. And for the most part, they are right.
The problem with the Price VS Value conversation is that it removes the client from the hero position of the story. It places insurance as more important than the journey of our clients. I promise if you do not figure out how to insert yourself into the ongoing journey of your clients, you will be beat by Amazon inside of this decade.
So we need to ask ourselves one question. What is the most valuable thing to my client. In a world filled with notifications, selfies, self-driving cars, robots that clean your floors, and speakers that can play your favorite song, while ordering your grocery list, while also looking up the question that your kid just asked you… our client’s most important item is time.
If perception is reality, then convenience is king!
For 2020, it is my heartfelt recommendation that you look at your marketing plan and you base it off this reality.
A bad salesperson sells you something you don’t need when you’re not ready to make a buying decision.
An okay salesperson sells you something you do need when you’re not ready to make a buying decision.
An excellent salesperson sells you something you do need when you’re ready to make a buying decision.
Find a buying process and create a strategic alliance within that process. Use automation and AI to allow your clients to get what they want, the way they want and when they want it.
You’ll still be able to provide value and savings. I promise.
Christian Moore is the founder of REAL insurance Agency in Lexington, KY. Christian started his career as a captive agent before becoming independent and has taken the best of both worlds to create one of the fastest growing insurance agencies in the country.
Before opening the doors to REAL, he spent 9 months developing a cultural strategy. He spent 2 hours on a business plan and then hired people who fit the cultural mission to execute that plan. As a result, he leads a team of people who work hard, laugh together, and genuinely love each other. In an industry known for being stuffy, Christian and his team are on a mission to change the perception of insurance through a culture of authenticity and generosity.
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