Here is the story of two agents, Kyle and Beth.
When it comes to sales, Kyle considers himself a closer. He is smart, driven and focused. After a few weeks selling, his confidence is swelling because he is absolutely correct about being a closer. He is writing a lot of business and receiving large deposits from the carriers every week.
After weeks of success, Kyle starts to notice a troubling trend. He is starting to receive some chargebacks. After two weeks, he realizes that he has lost 30% of his business. Kyle is concerned and communicates with his upline.
His upline gives him one solution…see more people and write more business. Kyle leaves determined to write more business but he is frustrated and he is questioning his opportunity.
Beth is a new agent. She is fired up and excited to go serve people. She is smart, driven, and focused. She is well-trained, prepared, and believes in herself. After a few weeks of selling, her confidence is growing because she is converting her sales. She is receiving large deposits from the carrier.
After a few weeks, she starts to receive a couple of chargebacks. She is not concerned because she has planned well. She connects with her upline and she gives her some tips on both conserving her business and writing better business that sticks. Beth makes some pricing adjustments and she starts to see results. She is excited about her opportunity!
In insurance sales, it isn’t just about what you sell. It is about keeping what you sell on the books.
This not only affects your current income but it also affects your future renewals. Keeping business on the books is vital to your success in insurance sales. This is called persistency in the insurance industry.
One important factor in improving your persistency is to make sure that you have a clear pricing strategy that is sensitive to your clients needs.
Many agents make the mistake of selling on emotion, focusing on premium, and blasting through the clients budget. When this happens, clients bite off more than they can chew. Instead of making a call and asking to decrease the premium they decide to cancel the policy, simply because of embarrassment. This happens a lot to new agents and agents who move quickly through their sales processes.
Here are a couple of things to consider when pricing:
Benefit Pricing Strategy
Benefit Pricing is focused on solving a specific problem for the client, such as covering a cremation or a funeral. It would also work for mortgage protection plans. In this strategy, you would offer the client three options that would meet their basic needs to future costs that would include inflation. In most cases clients will pick the most affordable option.
Affordability Pricing Strategy
In this model, the agent helps the client determine affordability by asking a series of financial questions that help the agent understand the client’s budget. This advanced strategy removes the guesswork of affordability for both the client and the agent. This strategy takes some practice but it yields massive results in the long run.
Both of these strategies, along with reading the client and strong listening skills, will help you write more business that stays on the books. This leads to confidence and making more money. Sales is a skill set that must be learned and mastered. Trying to figure it out by yourself is a long and bumpy road. Winging it just leads to disappointment.
Here is my advice: be like Beth and get some help. The sooner, the better you will save yourself from a lot of headaches. Trust me. Take some time to ask your upline about their pricing strategies…and as always, we are here to help. If you have any questions, text us at (502) 837-9813.