Rick:
Welcome back to another episode of the ITB Insurance, the Brightway podcast. I'm the host, Rick Fox. How are we all doing today? All right. Buckle up everybody. It's time for another insure rant. And as we have said over and over, a lot of my rant topics inevitably are something that I'm, that's
top of mind or that I've been talking to agents about or that's just kind of going on in the market. So today's topic, selling on price, and what I like to call as a subtitle for that, race to the bottom. So I've talked to so many agents out there right now and what's going on in the market, obviously craziness, especially on the personal line side, wacky rate increases and all of that stuff.
I'm talking to carriers almost as much as I'm talking to agents about situations and hearing how many agents are leveraging, falsifying the discounts to get to a rate they want to get to. So I want to talk about why selling on price is absolutely the wrong strategy. So I'm going to go through this. At one point, I'm going to ask you some questions. If the answer is yes to any of those.
then hopefully we can give you some direction as to how to think about it differently. If you kind of, this also could be a validation or an affirmation for good agents to say, wow, I see what you're saying, Rick, but we're not doing that. And I hope that's the case, but I know for a fact that it is not the case. So let's talk about kind of this selling on price thing. So if price is all you're selling.
Rick (02:07.69)
You'll lose or you'll win and then you'll lose. So let me explain what I mean by that. So selling on price means who's got the lowest rate. The market's crazy. Your carrier mix might not be exactly as you want. We do have the, especially on the personal line side, the, um, obvious pressures from the directs and things like that, where price...
Where, if you think about what price means, it doesn't necessarily mean coverages, so if I go 15 minutes to save me 15%, that 15% or more might be with different limits that aren't the right coverages, so the price isn't going to always win, so you're going to lose. And if you win, two ways to look at that, either, well, you had a good price, it's a good customer, they understand the value and they're going to stay at the lowest price, or you just bought into the roller coaster of shoppers. And this feels good when you sell the policy and it feels bad if that's how you sell and renewal time. None of those people, not only are they more work to get them to renew, not all of them renew because they're out looking for the almighty bottom of the barrel lowest price. So if you're an agent, that is looking at that through the lens of, I gotta have the lowest price to win this business, I don't think you're looking at it right. This is a professional business. It isn't a used car lot. So, let me kind of frame up with, I'm gonna ask you these questions. Please, I do not mean this to be patronizing. I super, super duper mean this to be helpful. And no one's gonna hear your answers because you're gonna answer sitting in your car while you're listening to this or while you're mowing your yard with your earbuds in, listening to the podcast, and by the way, thanks to everyone who listens, loving the community out there. First question, ask yourself this question. Are you worried your clients will get a renewal rate increase and call someone else before they call you? Is that a worry of yours? The rates are going up. Some of them are going up a lot.
Walk down this road with me. Customer gets a renewal email or when, you know, some of the companies are even still doing snail mail and it says, your rates are going up for your renewal by 26% is their first thought to call someone else or to call you. It's a really, really important question. And I'm hoping I'm, maybe I scared a few of you into thinking, holy crap. They might not think to call me. You're the agent.
You're the connection point. You're the one building loyalty and relationship around the business. So if their first call is to your competitor, that should be a giant red flag that you might have sold on price originally, or at least not created the value, which means, yeah, they bought it because of the price, even if it wasn't the lowest, they bought it for the price. And that can't be the way we look at it. So ask yourself that question. Are you worried about your clients calling your competitor... before they call you when they get a rate increase.
All right, question number two.
Did you cut corners when quoting to find the lowest and I'm doing the air quotes cheapest to win the business, the cheapest quote to lose, to win the business. And when I say cut corners, did we go with a little lower, little lower reliability limits, maybe a little higher deductible than you would normally recommend? That's a cheap way out. It's a, to me again, I'm, I'm putting it to you this time.
It's a lazy way out. Your job, mission impossible. Your, your mission, if you choose to accept it, is to be a trusted advisor, to be a relationship driven, value added insurance professional that sells them the value of being part of your world, part of your agency's world, not the almighty price. So the question is, did you cut corners?
And finally, a third question, just, just a general kind of feel. Does your business feel transactional? Is it a quote? You give them the quote, they buy the quote, see you later. When instead that should be somebody who wants a quote, you give them a quote, you explain the coverage, you understand, you explain to them why they need to have the things they need to have, why there are other things they might want to think about adding.
You send them emails throughout the year, maybe a phone call, probably not because you have too many customers if you're successful, you build a relationship. That's a big difference between transactional and relationship. And transactional is selling on price because what else are they buying? They're not buying you because you didn't give them any reason to. Now I'm cutting, I'm cutting all the way down to the bone here on purpose.
So let me just quickly, let me say those three questions again. No one needs to hear your answer, but if even you have a pause to the answer, to the negative here, it's something you need to start taking a look at. Cause this is how you're successful, especially when the market is the way it is. Number one, are you worried your clients will get a renewal rate from you, a renewal rate increase, and they'll call someone else before they call you. Number two, did you cut any corners when quoting?
And finally, third, does it just sort of feel like your business is transactional?
Any three of those that the answer is yes, that's okay. That's why we're here. That's why it's an opportunity to change your mindset. It's an opportunity to change the mindset of those that work in your office. It's an opportunity for you to change the way you build your business.
So here's the kind of things that cause this. So think about why would like, cause when you hear me say this, you're like, well, that makes way more sense. I want to keep more of my customers. I want to sell the value of that's why I'm an agent because I'm a valuable asset for this person to have in their world instead of buying, you know, from a, from a lizard on television.
So here's the reasons or the sign that you might be in the position you're in. That, and they're all fixable, but number one, you don't understand the relationship part of this business. So you try to win by racing to the bottom, racing to the lowest price. That is super transactional. That is happening all over the place and people are seeing it even more now because one strategy from back in the day, I knew a lot of agents that did this is they closed.
You know, they close their eyes and plug their ears and hope that everybody renewed. Doesn't work anymore. It's got to be some value there. There's got to be a reason that they want to be part of your world. They want you to be their agent. They're professional. The relationship, the value they get from you is worth more than the lowest, lowest price. So if you don't understand the relationship part, that's okay. You can learn it. You can work on it.
Man, reach out to me, we'll have a conversation about it because this is, this is the secret sauce of being a successful. Now there's a difference between being an independent agent and being a successful business agent and knowing and understanding the relationship part and where you need to add value and where you need to educate that part right there. That's the difference between kind of okay, good success and we're kicking ass.
Excuse my language. We just turned it into a PG-13 show right there, I think. Number two of what, what this could be a sign of. You don't have the confidence or pride in what you do to sell and retain the consultative way to give customers what they need and someone to count on for their insurance. You don't have the confidence that you can provide it or that you can say the right things. And again, totally okay. but infixable, but needs to be fixed. Those are the two things to me that are the main reasons why people are doing this. They don't understand the relationship piece or they don't have the confidence, knowledge, and with knowledge comes confidence or pride in what they do to do this the right way. And I'm holding you accountable to that today, mainly today, because this is the difference between good and great. You can make money in this business by being good, by being transactional, by racing to the bottom at price. You can win. You're going to have to win more often because you won't keep as much on the back end, or you can do this the right way. And instead of good money, you can make great money and you can create something that is great that you can be proud of, that your people can be confident in.
and that you can build around that. Now, some of you, again, back to the beginning here, some of you are doing this. And if you are and you're hearing what I'm saying and you're like, yeah, we're doing those things, congratulations. Hopefully this is validating the work, the energy, the pride you're putting into this, affirming that you've got it going on. But there are way too many agents out there that are looking at this for maybe it's a quick buck, maybe it's a short-term strategy to
You know, the, the win and the win always feels good instead of taking a really hard look at what builds long-term wealth. And it is understanding the value of the relationship, the, the need for a value ad for your customers in today's world. And if you give them the, the person that they need someone to count on for their insurance.
They'll stay with you. They will have loyalty. They will call you first. When, when the, when, when the fit hits the Shan or when the price they get goes through the roof, which in a lot of cases right now it is now people will push back and say, well, right now the market's so crazy, we're just trying to do the best we can and that is fair. But doing the best you can is always going to include building a relationship... and showing value to your customers and not giving them the lowest price, giving them the right price for them. I am not saying anything that you haven't heard. Hopefully I'm saying things that are getting you to think, you know what? I got some things that I get to work on, not have to work on, get to work on. Cause you can keep doing it the way you're doing it. If in fact, you said yes to any of those questions or you fit into those categories of why, and you'll still probably do okay.
But I know great agents, a lot of great agents, agents that not only am I proud to call friends, but they're proud to say, this is the business I do. I'm an insurance agent. I'm an independent insurance agent. I'm on my soap box right now, but there is nothing better than that. There is nothing better than looking in the mirror in the morning and knowing that your job is to help protect everybody out there, everything important in their life, giving them peace of mind.
And you can either do that transactionally through racing to the bottom and finding the lowest, lowest price you can by even cheating the system by giving, you know, college degree credits on policies that is not fair to your carrier who's priced that in a way that it's a, that, that can help loss ratios, which helps your profitability if you're, you know, looking at your retention, looking at your loss ratios, things like that. You just do this the right way.
Be, be, look in the mirror and say, yes, I am building a relationship with these folks. I am the person that they can count on and I'm finding them the best curated insurance selection bundle, whatever you want to call it for their, for that particular person's needs. As soon as it becomes transactional, as soon as it becomes a race to the bottom, as soon as your number one factor for selling.
If you have the lowest price you've lost. Because even if you win that business that day, the amount of work and energy, and more than likely losing of that business that's gonna happen down the road is not worth it. Be one of the good ones, build great wealth instead of good money, and I think you'll be very happy and prideful about what you're doing. And you'll see your confidence soar, you'll see the people in your offices
Vibe change in a positive way and you'll see your bottom line increase. That's my rant. That was definitely a rant. That was me saying, look, I've seen it. I'm out there in market. I'm talking to agents. I've been doing this for years. My days at Vertifor talking to hundreds to thousands of agencies. What's good. What's great. What's not good at all. And you're on that spectrum somewhere. And again, those of you that could go through this comfortably in agree with everything I said and know that those questions that I asked, your answer was no, we don't do that. Congratulations. You're winning. Those that aren't, it's time to go to work. Let's do this. So that's the rant for this week, guys. Thanks for tuning in. I hope that wasn't too preachy. That's not the goal of it. The thinking is, man, let's go win. Let's get better today. Let's succeed. In this hard market, it is time to sharpen our swords and go to battle and get the W's.
Anyway, thanks for tuning in. Really appreciate all the support we're getting. Um, got a really good feedback on the episode where I answered a bunch of questions that I got out of my direct messages in LinkedIn. So if you have a question that you'd like me to rant about or a topic for a rant, make sure to send me direct messages in LinkedIn, make sure we are connected in LinkedIn, and if you could do me the solid, go subscribe to the podcast, wherever you get your podcasts. And if you like what you hear.
Please give us a review. That always helps us as well. Thank you everyone for being part of the ITB community and we'll see you next time.
