Make perceptions change from PRICE to VALUE!
By Sean Mulcair
Where does the client really see value – in the insurance policy or the customer experience? Perceived value is an interesting concept. It can be defined as “The worth that a product or service has in the mind of the consumer.
The consumer’s perceived value of a good or service affects the price that he or she is willing to pay for it.” A customer and I were discussing the fact that her revenues keep going down because competition requires her Brokers to do whatever it takes to “retain a client”, and that often means remarketing a risk or working with the existing insurer to lower the premium.
I explained to them that insurance clients do not “perceive” the value of the policy to be very high, as we don’t do an effective job as an industry to create value. She was not sure what I meant, so I asked her, “In your opinion, how much is a 14 page black & white document, full of legal information, stuffed in an envelope, worth in the eyes of most consumers?” The answer she replied, “NOT MUCH!” The real value comes from the description of the product and the customer experience delivered by the Brokerage.
« If we start creating
more MAGICAL moments,
with our customers,
we will see perceptions
change from price
to value. »
If the Broker focuses on the price, then THAT become the “value”. We have to shift our approach to educate our Brokers to fearlessly teach our clients about the real features and benefits of the insurance product and more importantly, HOW those features benefit them personally in their everyday life. By doing this the focus on what is VALUE v shifts and Brokers will see that they can keep their clients without having to spend all their time driving the premiums down.
My client’s answer was “Well, how do we do that?” So I told her “If we start creating more MAGICAL moments with our customers, we will see perceptions change from ‘price’ to ‘value’.
Look for my future articles on How to Win with Today’s Consumer.
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