Tag Archives: differentiation

Differentiating in a Crowded Market

The following is an excerpt from a white paper, available in full here

There have always been a lot of independent insurance agencies in the marketplace, just as there are today. But the competition seems to be increasing by the hour, thanks largely to the proliferation of digital technology and online marketing.

Consequently, most agents hear the following comments quite frequently:

  • “You insurance people are all the same.”
  • “Sure, you can bid on my business insurance; we shop it every three years.”
  • “Can you give me a quote on my business insurance? I’m just trying to keep my current agent honest.”
  • “I’d like a quote on my automobile insurance.”
  • “I noticed my homeowners insurance increased $25. Could you shop it around?”

And those are just a few examples. There are so many others because consumers have so many additional purchasing options that didn’t exist until recently.

Whether it’s personal or commercial lines, consumers are constantly being educated that insurance is all about price. So if you sound like, look like and act like every other insurance agent or agency, people will assume that’s who you are — like everyone else. This leads to price-only selling, practice quoting and unpaid consulting.

See also: A Contrarian Looks ‘Back to the Future’

One of the reasons the marketplace is so crowded is that most agencies have not differentiated.

They simply do not have a compelling story of differentiation. When asked, “Why should I do business with you/your agency?” most will respond with the same standard, boring, “Generic Five” lines.

  1. “We give great service.”
  2. “We’re local.”
  3. “We represent all of the major insurance companies.”
  4. “We’ve been in business for 100 years.”
  5. “We have the best people.”

That last one annoys me. Really? Is there a vortex in the universe that sucked all the best people in our industry into one agency?!

Don’t get me wrong. I find that most agencies provide excellent reactive service, represent a slew of great companies, have been around a long time and have some great people. There’s no doubt about that. There’s just not a compelling reason why I should even consider you. You’re just not different.

Furthermore, the vast majority of agencies simply have no formal, systematic selling and marketing process. For most, the “selling system” (or set offense, as I like to call it), is still focused on the old way of selling:

Look, Copy, Quote and Pray.

I’ll look at your policies, copy the information, give you a quote and then pray that the premium I present to you is less than what you’re paying today. I’ll continue praying that you don’t take my quote, give it to your current agent and tell the agent, “Match it, and you get to keep the business.”

Do you have an “agency’s way” of selling and marketing your products and services? As an agency owner or producer, how would you answer the following:

  • What’s your 30-second commercial? What’s your two-minute infomercial?
  • What’s your unique selling proposition (USP) — the unique and appealing ideas and things that separate you from all other “me too” competitors?
  • What’s different in your process of risk assessment, risk transfer and risk prevention?
  • Do you and all of your team members know your top five PODS, or points of differentiation, and do you actually deliver on them?

I realize that changing the consumer’s perception remains a challenge when TV’s Flo and the gecko saturate the marketplace. They, and others, spend billions on advertising. It’s no wonder the consumer thinks it’s all about price! Plus, once you click through to a site, it has your data and tracks you indefinitely. This is not just in personal lines. Small to mid-sized commercial accounts are getting the exact same message. That’s because it’s irresistibly easy for the consumer or business owner to call a toll-free number or “click here for a free quote” on hundreds of different websites.

Again, please don’t misunderstand my point. The reality is that when properly used, digital marketing can help aggressive independent agents fill their pipelines (although I fear that most are filled with suspects, not future ideal clients). But while digital marketing can provide you with opportunities, it’s up to you to seize them. Once you get an email, phone call or online alert, what do you do with it?

See also: Future of Insurance Looks Very Different  

When I talk to agency owners about the number of clients they’ve received from online contacts, I hear vastly different stories.

What is one doing to get the prospect’s business that the other one isn’t? When an opportunity arrives, what are you/your producers doing and saying to connect with the prospect and close the deal? What’s your process, and how do you follow up on it?

Agents: Here’s How to Differentiate

Consumers are price-shopping insurance policies online in record numbers. According to 2017 JD Power research, the importance of price has surpassed that of a good past service experience when a shopper considers or quotes a brand.

Though increasing price commoditization presents an enormous challenge for insurance agencies, our newest sales lead response research provides some hope. With so many insurance organizations falling short on sales lead response best practices, there is a major opportunity for agencies, regardless of size or type, to stand out from the competition and win new policyholders.

The Impact of a Winning First Impression

The first impression an agency gives a potential customer is very important – not only how quickly they follow up, but also what they say. Most potential customers see this first interaction as a leading indicator of a longer-term relationship with the agency.

Effective follow-up that is timely, appropriately persistent, with a message that adds value for the recipient can increase the chance of conversion. Research shows that:

  • Calling a lead within one minute of an inquiry more than doubles conversion rates.
  • Leads who are left two voicemails on six missed calls are 34% more likely to convert than leads who don’t receive any voicemails at all.

Insurance agencies may be under the impression that their contact strategies and specifically their lead response efforts are timely and effective, but Velocify analysis of actual calls, voicemails and emails shows that, for many of them, sales response tactics are more likely to be in need of an overhaul.

See also: 3 Great Apps for Insurance Agents  

Here are some pro tips to help improve call and voicemail performance shortcomings identified in the Sales Lead Response: The Ugly Truth Behind Call, Voicemail, and Email Practices study.

Call and Voicemail Timing and Cadence

While there is no optimal, magic time of day to make a call, following up quickly and then at strategic intervals can improve outcomes. Our analysis showed that sales professionals are often miscalculating when it comes to the most effective communication cadence — the right number and timing of phone calls and voicemails.

Calling a lead within one minute of an inquiry more than doubles conversion rates, but only 7% of the prospects in the study received a call within one minute. Almost half of all prospects submitted didn’t even receive a voicemail. Of those who did, 40% received only one voicemail, and 34% received too many. One prospect even received 10 voicemails.

PRO TIP: Velocify’s six-call strategy suggests leaving a voicemail on the second and fourth call attempt. Leaving the first voicemail on the second call results in a 31% higher conversion rate than leaving that voicemail on any other call.

It’s important to weave voicemails into a company’s call strategy because missed calls can go unnoticed, and a voicemail is a good way to get a prospect’s attention. However, producers need to make sure to strike the right balance because research shows leaving too many voicemails before contact, as many as five or more, can actually be worse than not leaving any voicemails.

The Impact of Message Quality

Voicemail frequency can increase the chance of conversion, but agencies need to leave quality messages to maximize callbacks. Accordingly, the study evaluated voicemail quality on five basic criteria: context; clarity; length; personalization; and tone.

Only 18% of prospects received “good” voicemails that included all five. Almost half (46%) of all voicemails were scored “bad to terrible,” meeting three of the five criteria or fewer. On the opposite end of the continuum, 8% of the voicemails received didn’t even meet one of the five criteria.

See also: How Life Insurance Agents Can Be Ready  

More Effective Phone Skills, Powered by the Right Tech Tools

Insurers can avoid inadvertently throwing money away by responding appropriately and learning how to more effectively maximize every prospect interaction. There are a number of technologies and techniques available that help improve process so agencies can more easily and effectively make a better first impression.

Dare to Be Different: It's the Only Approach That Works

In today’s dog-eat-dog business environment, it is essential that you develop a strategy to stand out in a crowded marketplace… to separate yourself from your competition.  Simply put, to be different! 

Theodore Levitt, the renowned economist, professor at Harvard Business School and editor of The Harvard Business Review, had the following to say in his 1991 book, Thinking About Management:

“Differentiation is one of the most important strategic and tactical activities in which individuals and companies must constantly engage.  It is not discretionary.  And, everything can be differentiated, even so-called commodities such as cement, copper, wheat, money, air cargo and insurance.” 

Price is the enemy of differentiation.  By definition, being different is worth something.  Consumers are willing to pay a premium, redefine the buyer/seller relationship, erect barriers to the seller’s competitors and establish the seller as a trusted adviser when a differentiated platform offers perceived value in the marketplace.

Research on Brand Differentiation

Even with all of the attention paid to branding these days, more and more companies are being commoditized.  In other words, fewer and fewer are able to differentiate themselves through the eyes of the customer.  Commoditization occurs when the focus of the consumer’s decision is on the offering rather than the quantifiable difference that you bring to the business.  You cannot see commoditization.  However, it can be felt with a negative impact on your confidence, reputation, time, money and relationships.  Brand Keys, a loyalty and engagement research consultancy, analyzed 1,847 products and services in 75 categories via its Customer Loyalty Engagement Index.  It found that only 21% of all the products and services examined had any points of differentiation that were meaningful to consumers.    

So what is missing?  A differentiated value proposition supported by a unique consumer experience.

Differentiated Value Proposition

Value proposition is the reason for your professional existence.  It describes how you create value for others.  It makes you stand out in a crowded marketplace.  Without a compelling value proposition, you are ordinary and disposable – a commodity.  With a distinguished value proposition, you are unique and indispensable. 

Your unique value proposition must summarize the reason why a potential customer should buy your particular product or service, how it exceeds that of your competition and why it is worthy of the price they must pay.  The ideal value proposition is concise and appeals to the customer’s strongest decision-making drivers.  It is an irresistible offer, an invitation that is so compelling and attractive that the customer would be out of his or her mind to refuse your offer. 

Customer Experience Journey

What is the Customer Experience Journey?  It is the sum of all experiences that the customer has with you and your organization … the actions and results that make the customer feel important, understood, heard and respected.  Each and every customer interaction molds and shapes the journey.  While you may take great pride in the “features and benefits” of your offerings, it is important that you assess the degree to which you are stimulating the emotions of those whom you serve.  To accomplish this, you must deeply engage your customer’s emotions in addition to, and even above, their intellect.  You will hit roadblocks unless you are able to form an emotional connection that transcends price and product. 

Emotional connections are essential components of the journey.  Research indicates that more than 50% of the customer experience is subconscious, or how a customer feels.  The self-conscious brain is a fertile garden in which to sow positive seeds.  The mind is highly selective, processing millions of pieces of information each second.  Whether you realize it or not, you are touching the subconscious in each step of the Customer Experience Journey. 

In designing and delivering a Customer Experience Journey, it is important that you have a plan to engage the consumer.  Emotional engagement is the foundation of the customer experience.  People rationalize personal decisions first but make decisions based on feelings.  A great experience transcends the rational attributes of a product or service (i.e., price). 

Cecil Beaton, the English Academy Award-winning costume designer, said: “Be daring, be different, be impractical, be anything that will assert integrity of purpose, emotion and imaginative vision against play-it-safers, the creatures of the commonplace, the slaves of ordinary.”

Dare to be different?  You bet!