Cost – Price = Value

November 19, 2015 Don Hobdy Jr.

black friday

 

We are fast approaching another Black Friday. The shopping day where people turn into predatory hunters searching for the best deals. But are they searching for the best price, cost or value? There is a difference.

Insurance prospects will contact an agency (or three or four) searching for the best price. They are conditioned to think of personal lines insurance as a commodity. It's not, and you don't have to sell it that way.

If they buy from you, and the decision is based primarily on price then you rented a customer. They will come to you for a dollar and leave you for a dollar. If they purchased based on the value of your product or service, then you own that client. (There are ways to maximize sales for a business model centered on renting customers.)

Price is what the prospect pays now. It's the tangible number for the insurance. The visible out of pocket expense.

Cost is what they pay later. It's the money or time spent over time. It's the lengthy process to make a policy change or the bad claims services.

However, value is a little bit of both. Value is the visible cost at the time of purchase.

If long-term retention is your goal, then showing value should be your goal. Notice I said show value, not sell.
As a sales person, your job is less about selling and more about getting the prospect comfortable with buying.

"If they can see the value, then you don't need to sell. You are just helping them buy."

Show them the value of your agency, in the insurance product, and, most importantly, you. If they can see the value, then you don't need to sell. You are just helping them buy.

When you are at the electronics store at 5:00 a.m. on Black Friday, take a moment to consider. Is this just a good price or is it really a good value?

 

About the Author

Don Hobdy Jr.

As Vice President of Sales, Don Hobdy Jr. is responsible for ITC's revenue growth through product sales and strategic partnerships. While he doesn't promote any one sales philosophy to his team, he does incorporate a range of techniques from Sandler to Challenger in his methodology. Don, a licensed P&C agent, travels the country speaking to agents on digital marketing and agency efficiency as well as teaching continuing education classes. When he's not on the road, he enjoys firing up his smoker to cook amazing bar-b-que, watching his Dallas Cowboys, writing, and taking his three kids to amusement parks around the country.

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