5 Flaws of a Commoditized Sales Approach

I am convinced that  "we're free" are the two most damaging words in a broker's vocabulary, yet we see and hear them all the time.

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In a recent blog post, we discussed the need to move away from a commoditized approach to one that is more consultative. Now, I want to dive into five flaws of the commoditized approach that makes this so important.

Free?! There’s no “free” in advising!

The first flaw of a commoditized approach is the tendency of brokers to promote their services as being free. I am convinced "we're free" are the two most damaging words in a broker's vocabulary, yet we see and hear them all the time.

I always get a sense when somebody promotes themselves as being free that they think they're communicating they have great value, but the reality is the opposite. Your clients are intelligent businesspeople, and they understand you must be paid. To pretend to be free is insulting to them, and it's cowardly on your part. It's a clear indication you don't believe in your value proposition.

Stop and think about it. Your clients, your best clients especially, don't expect you to bring them free services. What they expect is you to bring them great results. Stop pretending to be free and start emphasizing your ability to deliver those great results.

Myopic vision

The second flaw of a commoditized approach is focusing on a single solution. If you live by a single solution, you're going to die by a single solution. I don't care what it is. I don't care if it's a technology solution or an insurance solution.

If I come to you and tell you that I sell an insurance solution, what will you consider buying from me? You might consider buying an insurance solution. And if I come to you and tell you I sell a technology solution, you might consider buying a technology solution.

But if I come to you and tell you that my job is to create efficiencies, deliver a better ROI and help you be more successful around your complete HR and benefits program, what will you consider buying? Anything that contributes to that outcome.

A single-solution approach can only work until one of three inevitabilities happen: A better solution comes along, somebody offers the same solution at a lower price or the ability to distribute that solution is taken away. Those going down the commoditized path are vulnerable in at least two of those three scenarios.

Is it a relationship business or not?

The next flaw has to do with how you view the relationship with your clients. There are a lot of technology-focused brokers out there. They tend to exist at the opposite end of the spectrum from traditional brokers.

Technology brokers seem to be convinced that the relationship isn’t important any more. At the same time, too many traditional brokers are still convinced that the relationship is all that matters.

How often do you hear, "This is a relationship business"? It's not that the relationship doesn't matter. It does. But we have to recognize that it's more difficult to run a business than ever before. And your clients are being forced to make business decisions first.

Yes, the relationship matters, but it can no longer simply be a social relationship built on the golf course or over cocktails. It must be the kind of relationship that can only develop from you having given your clients the right advice, having earned their trust and having proven yourself able to consistently deliver improved results.

Price vs. cost

The fourth flaw of a commoditized approach is that it focuses on the price of a product rather than the bigger cost issues that affect your clients' business. You would think Excel had been invented by a benefits broker. Too many brokers still live and die based on that damned spreadsheet.

When you focus solely on the price of a product (think, insurance policies), it's lazy and shortsighted. Nothing leaves you more vulnerable. Stop and think about it—how easy is it to go out and find the price of anything online?

When you choose to engage about the price of somebody else's product, you miss the opportunity and, I believe, the responsibility to address the bigger cost issues of your client's business.

See also: You Gotta Know Your Sales Numbers

“Let us provide a free quote”

The final flaw of the commoditized approach that we will mention is this insistence on providing free quotes.

As we consider agencies for admission into the Q4iNetwork, we review their websites. It is so frustrating how often the most prominent message on those websites, right there front and center on the homepage, is that “Click here for a free quote” button. I know that agencies that use this button are well-intentioned. They're putting it there as an enticement to the prospect who found their way to the website.

But think about why that prospect is visiting the website.

They're there because they have some problem and are looking for help. They're looking to figure out if that particular agency is different than the one they already have. I promise you they already have somebody who can provide quotes.

Somebody visiting your website is an opportunity to separate yourself from the rest of your competition. It makes no sense why so many insist on being evaluated on the one thing that makes them just like everybody else.

There is almost always a twist to this offer. Most of those “get a free quote” agencies also have messaging about how they will be your “trusted adviser.” These are conflicting messages. I don't think anybody finds a trusted adviser on the backside of a get-a-free-quote button.

Look in the mirror

If you're losing business to the competition, quit focusing on their business and focus on yours. As Henry Ford observed, "The competitor to be feared is one who never bothers about you at all, but who goes on making his own business better all the time."

It’s time we're honest with ourselves about what it is going to take for you to become that stronger business. A commoditized approach is always going to lead to mediocre value. And, while the financial reward for mediocrity in our industry has been excessively high in the past, feared competitors know those days are over.

Feared competitors also know that they have to focus on regular daily improvement to their business. And, not only do feared competitors understand the need to focus on daily improvement; they are extremely clear about the areas of their business on which they're going to have to focus that improvement.

Where does improvement start for you?

Kevin Trokey

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Kevin Trokey

Kevin Trokey is founding partner and coach at Q4intelligence. He is driven to ignite curiosity and to push the industry through the barriers that hold it back. As a student of the insurance industry, he channels his own curiosity by observing and studying the players, the changing regulations, and the business climate that influence us all.


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