I regularly read and follow a number of blogs written by people outside the insurance industry. Seth Godin is one of those people. He is the author of numerous books on marketing, including Permission Marketing, Purple Cow, and his latest, Tribes. The comments he puts on his blog often make me stop and think. On May 9, 2011 he posted this:
“In a down economy, marketers fret a lot about price. We think that since times are tough, people care about price, and nothing but price. Of course, people actually care more about value. They care about value more than they used to because they can’t afford to overpay; they don’t want to make a mistake with their money.
Value = benefit/price. This means that one way to make value go up is to lower price, right?
“The thing is, there’s another way to make the value go up: Increase what you give --improve quality and quantity and the immeasurable pieces that bring confidence and joy to an interaction. When all of your competitors are busy increasing value by cutting prices, you can actually increase market share by increasing value and raising benefits.”
I began to think about how the insurance industry approaches this issue. As more people use the Internet to research their purchases, how will you respond to what appears to be a price-driven strategy of many Internet buyers?
Many agents tell me that they’re not interested in working leads obtained through the Internet. They say that Internet leads are only interested in the lowest price, and will jump to another agent at the first opportunity to save money. They’re not loyal.
It’s true that people who research their insurance purchases online are interested in price. However, if Godin is correct, they’re more interested in overall value. So, how can we use new tools to increase the value our agencies provide?
One agent in the Northeast is putting this to the test. He currently purchases 100 Personal Lines Internet leads per month. He closes about 20 of those leads as new accounts. During the past several months, he has been working on creating an effective system of marketing to those leads. It seems to be working. This agent is finding that Godin is correct: people do prefer value. In fact, he has written several accounts on which he did not have the lowest price.
Having a good price is important. It’s what gets people interested in talking to you. However, what keeps them with you, long-term, is the value that you provide through the relationship. Marketing relationships are more important than they’ve ever been. You need to learn how to engage and develop these relationships.