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Which selling philosphy do you think works best #1Selling Based on being the lowest Price?

or 2 - Selling Based on Product Knowledge and Risk Management?
I am having a debate with a friend of mine in the insurance field, whom is a Sales Agent who believes the bottom line with selling is Price and that the other "stuff" will come later. He believes that you block the market, get the cheapest premium and sell based on price. I believe you qualify your prospect, try to find out what the client's expectations are, what is driving their decision to allow you to quote, try to find the holes in the coverages and present a solid proposal that addresses their needs and may be even beyond what their expectations are in terms of coverages. What are your thoughts? Derek Connick • I completely agree with your approach. If you sell on price, you do not distinguish your service from any other provider; and you will have a retention problem. Distinguishing yourself and what you offer gets you a higher quality more loyal clientele. In the long run, you gain by better retention and referrals. Val Harris • If you become known for selling the cheapest product, you will also be known for selling "Cheap Products", and I don't mean price. Your clients will soon relate your products or services as being substandard or low quality. By properly educating your clients your clients will sell themselves on the superior products, even when the price is much higher. If this were not true, Mercedes Benz, BMW and Lexus would never sell any of their overpriced vehicles. Derek Connick • That is an excellent way to put it, Val. If we make price the only issue, it will be the only issue. Clients will migrate and leave when the business has "grown up". Ricky Norris CIC • If you sell with price , you will lose it on price. You have to sell your value proposition and point of differences. Kim Czeropski • I agree with your approach. Selling on price only invites the consumer to select you because you're 50 cents cheaper than the next guy, but also sets you up to lose the client when the next guy is 50 cents cheaper than you. In my opinion, selling the benefits of the relationship with you, the higher standards of customer service, and adding value-add will retain more customers in the long run. George Marshall • I think I may be approaching the minority here, but I think the most appropriate answer is "It depends...". I agree that in following the Risk Management Method, it is our duty to ASK the Prospect the necessary and intimate questions (ie. what are the specific exposures? how are you currently addressing each exposure? are you satisfied with how the exposures are beeing addressed? etc.), but mixed in should be the cornerstone of any good relationship: "How can I make you happy?". Every opportunity has a person that is an individual, with their own specific wants and desires. IMO, the core mandate of a Broker should be to professionally represent their client in the marketplace by providing the best knowledge/service

AND the best pricing available. It's up to the Client to base their decision on either or both... Hopefully, both~ Betsy Robertson • Selling on price is is a lazy approach and a disservice to the client. I say lazy because if price is the sole focus, odds are there is not a conversation being had about why a policy with a higher premium is a better fit. One of the biggest challenges in the marketplace is the consumers' lack of understanding about the fundamentals of insurance; how their plan functions, the basic terminology used in the policy, how the policy pays, etc. The agent bears responsibility to educate the client in these areas (the client also bears responsibility to know their policy). Educated consumers always make better decisions and are less likely to fall into the practice of basing their buying decisions primarily on price. Derek Connick • George makes some good points. It comes down to doing the homework and getting to know your client. Unfortunately, there are some clients who, despite your best efforts, will decide based soley on price. To quote and bind based soley on the lowest price, without any other considerations or work, is a disservice to the client though. Mary Smith • Now let me throw into the mix another thought. My friend believes the "Pirce/Blocking the Market Game" is indicative to Contractors.. He believes that based on their make up that they are not sophisticated clients and do not want to be educated and really only care about the almighty dollar so why waste your time trying to change their mind when that is not going to happen. What are your thoughts about that? Do you think that is true? Do you think your approach has to be different depending on what market you are going after? Sam Nigh • I agree with most of the comments that have been made so far. While my experience is mainly on the carrier side, in conversations over the years with my many agency friends, they confirm that price selling is a disservice to both the client and the agency. True, they are always looking for a competitive price based on the products and services being offered, but that does not translate to the cheapest price. A client who comes to you based on price alone, will leave you for the same reason. Thus the agency finds themselves in the position of constantly looking for a certain amount of business just to replace the price business that has left. The truly successful shops are those that have built up a solid, loyal base of clients that have been with them year after year after year. This allows the agency the opporunity to replace those, hopefully few, clients they lose, and to look for additional long-term customers to add to the fold. Derek Connick • I do not think this applies soley to the classification of contractors. Nor do I think it applies to all contractors. There are definitely clients who only want the lowest price and do not care about being educated. Does that mean we should change our process just to suit a few clients? I do not think so. The same process for all clients is appropriate. It is up to the client if he chosses to ignore your advice. Accordingly, a consistent process with full documentation is most helpful if an E&O claim arises. Mary Smith • I really appreciate everyone's comments so far and I think everyone is right on point in regards to the concerns and potential issues and Derek I am 100% in agreement with your comments. I think as an Agent you have to make a decision on what kind of Agent you are

going to be. I think if you are well thought out Agent that looks at the risk as a whole and develops a plan on how to approach the client and try to get to the real issue at hand which as we all know when it comes time for a claim the cheapest price philosophy goes out the window, at that point your client is looking at you asking how come you didn't help protect me from potentially losing thousands of dollars. The true question then becomes "is it that you want the cheapest price or someone whom is looking out for your best interest?". I would have to think at the end of the day the client wants to be able to sleep peaceful at night know their business is protected and that is where the true sales experience comes in. Being able to educate a client that maybe saving a few bucks is not what it is all cracked up to be. Stephen Blakesley • Actually, I am not certain the either knowledge or price are good selling platforms. Sell on price, lose on price. There is always someone cheaper. Sell on knowledge, there is always someone who knows more. All you need to know is more than your customer. The real basis for selling success is through relationship building which leads to trust. People buy things from people they trust. One competency that aids in building relationships is Emotional Intelligence. You can not be successful without EI. Michiel Laker • Doing business on price only is not sustainable and will catch up with the client and you in the long run. Sound risk management is key and if the risk is quantified and priced accordingly it is a win, win for both buyer and seller. I suppose the answer also lies in customer education in that if the client does not understand the meaning of or consequences of paying a Gary Tipton, AIC, AIM, AIS, CLU, CPCU, LUTCF • I spent 13 years of my insurance career selling in North Dakota, a state with relatively low premiums. If I had concentrated on selling based on price only, that 13 years would likely have only been 2 or 3 years. Selling customers the right coverage for their needs is the way to make long term clients. Selling on price is short changing them and you. Norm Mitchell, LUTCF - Nashville, TN. • An old saying......Price is what it costs, but value is what you want to get. Derek is right, you've got to have a discussion with your client to find out what they value. If it's the cheapest price, then you have to decide if you want them as a client. If you do then like Derek says "you need to document, document, document" because when claims time comes you'll be blamed if they don't have the Cadillac of coverage. I had an auto insured one time who had an accident and swore to me that he had told me he wanted rental reimbursement coverage. I pulled the file showed him where he had signed off on it and asked him if he wanted me to now add it for future claims. He said "I'll get back to you". Never heard back from him and probably 3-4 months later he had another accident and called in again saying that he had the rental reimbursement coverage. I said hold on a moment and went and pulled his file again and got back on line with him saying that we just had this conversation 3-4 months ago and you said you were going to get back with me, which you never did, now do you want me to add it this time so you'll have the coverage in the future? This time he added it and I continued to be his agent until the day I sold my agency and retired! Price is important but if you live based on price, you'll also die based on price! Many times a

client would call in for a quote, I'd ask him/her what kind of coverage they had and they would say I don't know I'm just shopping for a/the better/best price. At that point I had to make a decision whether I wanted that person as a client. If I did quote them I quoted them on state mandated coverage with as little coverage as available since price was what they wanted, at least with that I might have a chance to get them in the door and begin my work to educate them. But I would also quickly take the time to explain other options and ask questions which directed them to think about why they needed more than the minimum with the lowest price. It all depends on the time you have to spend on a new prospect. If you are new and struggling with a captive company who is on your back for production, then you have a different mindset. I'm still not saying you need to build your agency on price alone, but if you are no longer in business due to not meeting quotas then you'll never be able to educate that client. If your new, you've got more time to take out of your day to explain things. When you get more experience in the business (or you're not under production pressures) and have honed your selling skills and are no longer struggling for clients then it's your call on the type clients you want to build your agency.