I had the opportunity to talk with Michael D’Arelli, Executive Director at American Agents Alliance this past week. Our conversation was focused on how insurance and agents and brokers can move away from the price-driven sale. His insights were recently published in a new ebook titled “10 Plays to Accelerate Insurance Sales Growth” with winning plays from insurance industry experts.
Michael provides some great advice for agents and brokers just getting started, or those that are trying to evolve their business to meet changing buyer expectations.
Stuart Ganis: What is your advice to agents and brokers that are tired of the price-driven sale?
Michael D’Arelli: If you want to move away from the price-driven sale then you must create real value. The first question every agent or broker should be asking themselves is “What value am I creating for the prospective insurance purchaser?” If the answer is simply I am providing a quote or coverage, no offense, but this is not creating much value in the scheme of things, since most consumers can go online and get quotes and bind coverage often in less time than you can do it for them. Unless you are creating value over and above what insurance purchasers can do for themselves online or through another agent or broker, why should they buy from you? What value are you creating?
Stuart Ganis: How can agents and brokers offer unique value for prospective insurance purchasers?
Michael D’Arelli: You create value by accumulating knowledge and becoming the very best in your niche. Know your products inside out and sideways and never stop developing professionally. You must invest in your professional development with time and money. Know coverages, policy forms, commit to a niche and become an expert. Pack knowledge into your brain like you are loading a musket and preparing to fire it.
Stuart Ganis: So with such a simple solution, why aren’t more agents and brokers doing this?
Michael D’Arelli: We are paid for our knowledge—for our expertise—which shamefully enough is severely lacking among insurance agents and brokers. In my own state of California, prospective agents and brokers need only complete 52 hours of pre-licensing coursework and pass a state exam, accumulating hardly enough knowledge to fit into a thimble. And most agents and brokers never develop professionally beyond this point, yet they complain that prospects are only interested in price. Well, to point out the obvious, when agents and brokers have little more to discuss and offer prospects than price, it follows that prospects should in fact be focused on price.
Stuart Ganis: With a solid foundation of knowledge, how can insurance agents and brokers rework their sales approach?
Michael D’Arelli: Approach prospects by asking, “What’s important about insurance to you?” Do not break the awkward silence after you ask the question, as they soul search for a minute trying to answer the question. Let the silence break the prospect down and force him or her to answer it. Why? Because their answer will be very revealing; it will tell you what is important to them, what motivates them to purchase. If they say something like, “Well, it’s the law; I’ve got to have it by law,” you will know they likely don’t value coverage and you need to determine whether you want clients that could just as easily leave you tomorrow for whomever is cheaper online. Alternatively, they may say, “Well, if all my stuff is stolen or one of my employees is hurt, I want to make sure I’m adequately protected.”
Stuart Ganis: What else can insurance agents and brokers do?
Michael D’Arelli: Ask yourself what sort of prospects do you want in your book? Would you prefer prospects that read the menu from right to left at the restaurant, or prospects that value the protection and counsel you are providing to ensure that their family and business are protected?
To sum it up if you would like to write more business, “load the musket” and create value by accumulating enough knowledge to become an expert, then change your sales approach to a value-driven sale by asking prospects, “What’s important about insurance to you.”
To dive deeper into this, here are 10 tips to help you build and grow your insurance practice download the full ebook directly from our website here.
About the author: Stuart Ganis is the director of the insurance vertical at Velocify and a 24 year veteran of the insurance industry. Ganis started his career as a producer in 1989 and co-founded an independent agency in 2000. The agency grew to more than 30 employees and $15M in premium in less than three years and was acquired in December of 2005. In 2006, Ganis launched a consulting practice, helping independent insurance agents in the areas of sales, marketing, technology and operations. Follow Ganis on Twitter @StuartGanis.