Price wars.
How confusing!
It is so puzzling for many of us to compare prices…from homes to cars to dishwashers to paper towels. We are constantly comparing and contrasting prices, but how often do we really take a good hard look at the product’s actual parts or ingredients, rather than just the bottom-line price?
We don our blinders, and most times all we see is that dreaded number sign, followed by several ‘zeros’…never fully understanding the actual mechanics behind the price.
How many of us really know what we are looking for, say, on the back of a package of Doritos®?
Whole corn and spices, I get…but, Monosodium Glutamate and Maltodextrin. Seriously?!
So, what drives us to buy if we don’t fully understanding what’s inside the bag?
Is it the witty commercial we just saw on TV? Is it an attractive print ad in our favorite magazine…a catchy billboard on I-75…a recent Facebook post…or, perhaps, a comment from a close family friend? Where do we get our purchase decisions from?
The same premise goes for the policies that you quote for your clients and prospective clients.
With rate increases popping up all over the place, how do we get our clients to look inside the bag? The “why are these so high?” phrase is a very common expression…enough to scare any agent into allowing the clients to have their way!
In my previous life, a higher price was a concern that I would get on a regular basis from my clients. I could spend hours talking about the value I could bring to the table, and, as their representative, how invaluable I would be to the success of their business. But, in the end, after all that work of building a strong client relationship, there were many times that the ultimate decision still came down just to one thing…price.
Finally, I decided it was time to turn the tables on my competition. I knew my product like the back of my hand and I was ready to roll up my sleeves and dig in. The time had come for my competitors to start defending their lower prices!
The war was on.
What? Have someone defend their lower prices? Yes… that is correct.
From that point forward, when I was faced with defending a higher price… I asked my clients to look at the competitor’s price and question themselves: “It’s not ‘why are our prices so high,’ rather…’why are their prices so low?’”
“Why are their prices so low?” Has a nice ring to it!
This one suggestion allowed my clients to take a step back and question their original statement. It allowed the client to question, perhaps, “What was missing?” This also enabled me to bring the value-added sales techniques that I have learned over the years back to the table. It permitted me the opportunity to review quotes side-by-side, comparing, contrasting and educating…all-the-while building more trust with my clients. And finally, it also allowed the clients to absorb and digest my value-driven reasons behind the higher prices.
While taking this approach, I received a lot of “never thought of that” comments. Knowing my product was the first step in defending my price…defending my price through reversing the concern was the next logical step. It puts the competitor’s lower price on the defensive, rather than the opposite. And, it allows you, the agent, to compare and contrast the differences on the various quotes.
If you know your product well, then the higher price concerns will become a wonderful challenge for you to show your stuff. You’ll be able to pick apart the competition and make an argument for the carrier and the coverage you desire your clients to purchase.
As the agent, it is your responsibility to know the ingredients of each policy you write. The value you bring to the table should outweigh the competition’s value, their price, and their ability to serve your clients.
In our industry, you are always going to be faced with price wars. It’s a definite fact.
Know your ingredients.
In the end, it’s how you frame the concern that will win the war.