Tag Archives: price

09.20.18
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What you can do that they can’t

Apparently, I forgot to hit publish in September 2013

 

Enough already, so sad that industry publications continue to write articles about direct writers (state farm, allstate, geico, liberty mutual, etc.) and how the independent agents are competing against them.  Are you really?  Maybe it is time for a solid look in the mirror.  While you are at it maybe you look at your business plan as well.

Some things to consider;

1. Do you really want their customers?  I like leftovers but my wife is a great chef.  Her leftovers are the only one’s I eat, I’m not interested in anyone else’s.  The lesson, focus on what you want instead of what they do not want.

2. Let’s face it, most companies want the same preferred business; great credit, own a home, have a college degree, married.  Do you?  Funny thing, in my experience, I do not see this very often among the Geico policies I replace.  How about you?

3.  Do any of your carriers not have a top notch call center?  Don’t you have to have one if you want to be in business today?   Thing is just because you advertise it doesn’t mean it is any better than a company that does not advertise it.

4. If you have an agency management system you have all sorts of ways to automate your follow up with current customers and prospects.  Thing is you can time it up so you regularly reach them with VALUABLE information.  Please let me know the last time a valuable piece of direct mail came from a direct writer….Yup, me neither.  I think you might see a narwahl first 🙂

5. When was the last time you went shopping and the only thing on your mind was price?  Go look in your kitchen, let me know how many store brands there are versus big companies.  But that is not the real comparison see most of those store brands are made by the big companies.  Now look again, do you have any of the real cheap cans of vegetables?  Boxed goods?  Odds are the customers you want don’t have them either.  So why are you still worried about the price?

6. LOYALTY is most often reserved for PEOPLE, not brands or companies.  How many people know their call center rep?

7. Based on my results and likely yours, you can get competitive rates for 8 out of 10 people you talk to.  Let’s be conservative and drop that to 7 out of 10.  7 out of 10.  There is no mathematical way that if you only have one company you can duplicate that result.  So why spend the time on the 2-3 people that you cannot get a competitive rate for?    *See number 1 ” do you know who you want”

8. Back to loyalty for a moment.  You’ve built a business but have you built relationships?  We are in a long term business, the profit from any household/customer/client/business rarely comes in the first year.  How are you keeping them around?  This is differentiating yourself from those companies you are supposedly in competition against.  Heck it is also solidifying your position among any of the other local insurance options.

Bottom line, BUILD YOUR BUSINESS.  It will build faster if you focus on what  you can control.

09.18.18
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Convenience, a bad compliment

So apparently I was buying a lot in September of 2012 and just had to write about it  https://theinsurancebill.com/?p=202

If you are a broker, people leave.  Period.  No one is 100% for more than a year or two.  People die, people move, people get rid of cars and homes, etc.  To think you can keep your policy count and customer count growing is a better goal than keeping 100% of your customers.  Often they leave without warning.  This hurts, sometimes.  But, most of us maintain customers because the effort to switch doesn’t match either

  1. The possible savings
  2. The uncertainty that comes with new

But, taking “negative advantage” of these scenarios is not a good idea.  It is why insurance is where it is.  It’s why some of what EZLynx’s rating engine is interesting.  It is why seeing Covera test a theory that I have executed on for 6ish years really interesting.

On the other hand, I firmly believe that a review that starts with ” They saved me a lot of money….” or ” WOW, they helped me lower my price…”  including an arbitrary “our average savings is $572 per year…”  Is some of the worst advertising you’ll see.  Sure, maybe a fact is being shared, but wanting to be known for this is not a wise idea.

Consider an alternative; try being the person who offers what people consider a consistently fair price. Seriously, leading with the lowest price does some long-term damage to your business it also sends some bad signals out to the universe.  Price Consciousness is normal, sadly we are in a consumerist culture that has ruined, or at least hindered capitalism.  Sure, you are “happy” that you saved them money.  Nothing wrong with this, but what else did you do?

I wrote about being willing to “overpay” for some convenience because I am.  Actually, most people are.  If you are a broker and reading this you better know that well over 50% of your customers can lower their rates today but they stay.

Just consider looking at things from your business side as well as your personal side a bit differently.  Feel free to take a piece of our formula;

” We’ll try and improve your coverage and improve your rate.  Hopefully both”

05.14.15
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Dear State Farm,

One thing that seems to continually bother me is when the wealthiest people and companies choose not to really do the world some good.  When they choose profits over people.  When they are genuinely in a position to change an industry for the better which will increase their profits and genuinely help the American public and they choose not to.  Baffled by it.

Why write today?

  • Because every time I receive another letter from you I wonder why another tree branch had to die.
  • Because I wonder why a huge company allows their product to be so diluted by advertising.
  • Because I wonder about the last time you or I calculated any savings in percentages.
  • Because I am wondering if there is anyone who can accurately calculate a discount on an insurance policy.
  • Because I am wondering why, in the age of specialization, personalization and niches you still send to “or Current Resident”
  • Because I am wondering why, if you are really a good neighbor, you don’t use local printers and mailing operations.
  • Because I am wondering why you are still using white envelopes when there is science behind using colored envelopes.
  • Because I am wondering why you use a standard #10 envelope when you can mail one twice the size for the same cost.

Oh, and your copy stinks.  Seriously, do any of your agents have enough time to “take a long, hard look at all the possible ways you can save….” Really, if you are still combing through policies you have bigger issues.

But then again you are the largest insurer in the U.S.A.  You also have fifteen agents within about ten miles of my home.  **That is scary**  What do I know.  Either way, thanks for reading.

Sincerely,

 

Billy Van Jura

 

Disclaimer; There is good and bad in everything and advertising/marketing is no exception.  We are reminded of this every time we open our inbox, our mailbox, drive around, listen to the radio, watch T.V. etc.  I suppose the other side of this is that the lazy, spam like advertising perpetrated by many companies actually makes average advertising look good and good look great.

12.28.13
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It is what it is they are what they are….

An awesome advertising company that happens to sell insurance.  Every week of the year your mailbox is likely infiltrated by a mailing from Geico.  Not always a letter, sometimes just an insert in something else but they are there.  The message is always the same ” How much could you save on your car insurance?”  They use that goofy gecko, a pig, a caveman, random “b list” celebrities, etc in order to try and get your attention in a crowded place and they do a really good job at it.  This is based on them recently being ranked the #2 car insurer in the United States.

So good for them!  They actually make it easier for me to stand out with a commoditized product.  The thing is they completely dumb down what is more often than not an important piece of a financial plan.  Let’s look at this weeks mail; 5 Important tips to help you save money on car insurance

1. Insure more than one car on  your policy;  Is that the best you can do for number 1?  Really, insure another car?  In many cases it is actually considered fraud to not disclose other vehicles in a household NEXT

2.Make sure your car is equipped with safety features:  Come on man(thanks CC)  you then point out Anti-lock brakes, air bags and anti theft systems.  2 of those three are basically standard features of any car 2000 and newer.  As far as anti-theft, the discount is so small since it is a percentage of comprehensive which is your least expensive coverage.

3. Find out if your alumni association, credit union or professional group partners with Geico.   Ok now you are offering something, nice play.  Enjoyed this for years at Liberty Mutual until I realized it was more of a marketing ploy than an actual discount.

4.Insure more than your car with Geico.  Great a multi-policy discount, how original.

5. Educate your young drivers, or encourage them to get their own policy.  Although I like this idea from an overall responsibility perspective there is a small chance of savings.  See do you think the 18-22ish year old can afford the rate?  If the parents still need to subsidize the cost where is the savings?  

My key take away on this and anything else Geico presents is this; They do what they say they are going to do.  They do not promise a solid policy, they do not promise great coverage they do not promise that this policy is a great piece of your financial plan.

Good for them, but most people want better value not better price.

Just some thoughts.

11.22.10
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Saving money is bad…sometimes

You hear it constantly on the radio and T.V. It shows up in your mail on a weekly if not daily basis, heck a banner ad probably popped up before you even got here.  Each insurance company quoting exactly how much money they can save you or how many discounts are available and rarely getting specific on coverage.

Yes, I think saving money can be bad.

If you have not taken the time to review your insurance plans on a regular basis you may actually be saving too much money.  Yes I just said too much money.

Having watched insurance cycles for 8 years it is reasonable to save in the neighborhood of $200-$300 simply by a change in the market.  This, in my opinion, is ok.  If you are saving more than this you may have missed a change in the market.

So, step 1 is establish you and/or your family’s base line of coverage.  Step 2 schedule the time every 12 to 18 months to review your coverage and review your rate to make sure it is still competitive.  Saving a few hundred dollars is good but saving much more than that just means you have not kept up with your regular insurance reviews.

Update 5/13/15

The more things change the more things stay the same.  The industry is getting close to taking advantage of this massive opportunity.   That’s correct, the inherent laziness of humans combined with an old and tired purchasing structure is a massive opportunity.  Good things should be coming soon.  The savings, on the surface, will look smaller.  The reality is your average price over a ten year period will be better.