Advice As A Value-Added Benefit

JackBurke

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Despite turbulence in today's health field, HMOs have made dramatic inroads into our national concept of medicine. Twenty years ago, most people visited a doctor only for problem resolution, not prevention. Today we are just as likely to visit a doctor for preventive medicine as for curing an illness. Doctors have become advisors, as well as healers. Taking a cue from medicine, perhaps agents need to ask themselves if they are advisors, as well as producers and processors. This enhances the relationship with clients, and in turn promotes client loyalty and retention, which increases profit.

For example, because I'm a California resident with three teenage drivers and five vehicles, Auto insurance is a major line item in our household budget, annually surpassing $5,000.

Several years ago, we switched companies. We had purchased a sports car with a V-6 engine for my wife. The engine was a last-minute decision because we had been planning on the V-8. Upon calling our insurance company with the policy change information, the rep commented, 'It's a good thing you didn't buy the V-8; we don't insure that model!' I refuse to allow an insurance company to dictate what I can or cannot buy, so we switched.

When signing with our current company, I told the story to our new agent. Placing himself into an advisory position, he commented, 'Your current company will insure whatever you may buy in the future, but I'd like to offer a service that could save you a lot of money down the road. When you plan to buy future vehicles, give me a call with the models you have in mind. I'll let you know what their rating categories are. If one model has a better rating and lower insurance costs, that might influence your decision.'

Since that day, I've considered my agent to be an integral factor in every auto purchase. He has increased his value to our household, and thus he has improved his odds in retaining our business. (By the way, he now handles all of our insurance-corporate and family.)

Whether you're dealing with a company fleet or a single auto, you have the tools to help clients manage their insurance costs. The question is: Do you offer this information to all your clients as a value-added service?

State Farm has taken this concept a step further by providing an advisory brochure for their policyholders. Placing insurance rating on an equal par with warranty and gas mileage, the brochure lists models that have lower-than-average and higher-than-average ratings. This allows policyholders to compute insurance into the overall cost projections of a vehicle purchase.

Assuming that the majority will try to select vehicles with lower ratings, there's another unspoken benefit. Ratings, as we all know, are primarily affected by loss experience. Lower-rated vehicles are less likely to generate claims and losses. Everybody wins in this game! Are you a player?

Giving Advice: Help Clients Plan for the Future

This month's 'Short Circuits' column encourages agents to act as advisors to clients. One way to do so is to inform clients about ways to plan for their future.

Here's a copy of a letter reminding prospects of an often neglected aspect of Social Security, one which could potentially cost them thousands of dollars. What better way to give value-added service than that?

Dear Customer:

Do you know how much you're owed?

Like most Americans, you have access to a valuable insurance fund that provides coverage for Disability benefits, retirement funding, and much more.

That fund is Social Security.

But most Americans neglect an important yet simple act which could deprive them of thousands of dollars in benefits. This is the verification of credits. After approximately three years, any errors that may be in your account cannot be corrected. Any benefits you lose due to such errors are lost forever.

As a service, and with no obligation, we will be happy to initiate a status report of your Social Security account and to update you about the benefits.

I'll call you to get your authorization and arrange an appointment.

Sincerely,

Your Agency Name

Jack Burke is the president of Sound Marketing, Inc., which specializes in audio and video productions for corporate marketing, communications, and education. He may be reached (800) 451-TAPE.
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