There’s Nothing High or Low…but Comparing Makes It So

Quality versus Price

The #1 objection salespeople face is price. It’s as true for insurance agents as it is for car sales, realtors, or anyone else who sells for a living. You get it because you’ve probably been in a store, looked at an item then hopped online to see if you might get a better deal somewhere else. And, if it’s available on Amazon with free next day delivery then why not go that route?

Insurance is different than a book, dishwasher or some other tangible product because insurance is a complicated contract. Nonetheless, it doesn’t help when some online insurers advertise that drivers spend $21 billion more on car insurance than they need to every year. I’m sure you’ve received marketing material from more traditional insurance companies that focus on price too. As I write this, I have one mailer telling me I can save 30% on my auto insurance, another says I can save $59 per month, and one more promises “a simple way” I could save $500!

Is it any wonder that price is top of mind? We’ve become conditioned to believe we can get a better price if we hold out long enough or look hard enough.

But a lower price doesn’t necessarily mean a better deal. After all, cheap doesn’t only mean less expensive, often it means inferior quality. When it comes to a good deal or great value, look at it this way: V = WIG / P. That’s the value formula and in plain English it means Value equals What I Get divided by Price.

If I can get more for the same price, that’s a better deal. Or, when I can get the same thing but pay less, I feel like I got a good deal. The component to focus on is what the customer gets for the price he or she pays.

There are two ways to tackle this. First is showing all that someone gets for their money. I vividly recall working with the home office commercial staff at my former company. We’d come out with a commercial endorsement that had some 40 additional coverages. The price was around $600. To a customer that might seem like just an extra $600 for their insurance unless the right comparison (What I Get) was made. As I looked at the endorsement and started adding up all of the coverage limits it amounted to more than $7 million in additional protection! To my surprise, nobody in the commercial lines department ever did that math.

The sale for the endorsement became much, much easier when an agent could say to their client, “This new endorsement I’m recommending has 40 additional coverages giving you $7 million in extra protection for your business. And best of all, it’s only $600.” Think about it; $600 doesn’t seem like much when compared to $7 million.

The second approach is to shift the comparison point altogether. Your price can only be too high compared to something else. For example, is $40,000 a lot to pay for a new car? It might be if all you’ve bought in the past were used vehicles. For other people it might be a good bit less than they paid for their last car. Another example would be height. Is 6’5 tall? It may be taller than you, but it would be short compared to most NBA basketball players.  

Understanding this, when it comes to selling insurance, the best comparison may be citing real scenarios you’ve encountered in the past. Talking about a loss that was covered by the endorsement might do the trick. “We had a commercial insured a few years ago who suffered a $125,000 loss that was fully covered because of this endorsement. They were so thankful they spent $600 to get that extra protection!” Suddenly the extra money seems like a bargain by comparison!

Here’s what I want you to remember when it comes to the price objection: “There’s nothing high or low but comparing makes it so.” Make the right comparisons and the sale becomes much easier.

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