Differentiate Or Die: How To Survive The Competition
Guest Contribution – Steve Kloyda, The Producer’s Toolbox
Are you being commoditized? In his book The Lexus and the Olive Tree, Thomas Friedman writes, “a commodity is any good, service or process that can be produced by any number of firms, and the only distinguishing feature between these firms is who can do it the cheapest.
Having your product or service turned into a commodity is no fun, because it means your profit margins will become razor thin, you will have dozens of competitors and all you can do is make that product or service cheaper and sell more of it than the next guy or die.” My guess is that your business is very competitive. And guess what? If you act and sound like every other salesperson in the marketplace, you have commoditized yourself. Let me share two powerful ideas that will energize your prospecting efforts and help differentiate yourself from everyone else in your marketplace. These two principles will transform the outcome of every prospecting phone call you make.
Principle #1: Ask to be invited into the conversation.
Always ask people if it is a convenient time to talk. Has a salesperson ever called you on the telephone and just let ‘er rip? How did that make you feel? Now, maybe you were taught by some wise sales manager that you should never ask for permission to talk because you may give the person an out. Well, since 1984 I have been asking people, “I know you weren’t expecting my call today, is this a convenient time to talk?” 95% of the time they respond with, “That depends what are you calling about?” Guess what? They have invited me into the conversation.
Principle #2: The purpose of the call is to keep the purpose of the call the purpose of the call.
Confused people will not respond to action, so once the person has invited you into the conversation, make an opening statement: “The reason for my call today is…” or “The purpose of my call today is…”, or “I calling today about….” then state your purpose for calling. Be clear and concise, and end your opening statement with a question to engage the person. And never, ever say, “I was just calling….” The word “just” minimizes your purpose for calling, and commoditizes you. Anita Roddick, founder of The Body Shop, put it this way: “I simply looked at where everyone in my industry was going, and went the other way.” Apply these principles and you will stand out from the crowd and escape the commodity trap.
Ryan’s Insurance Take
In the Insurance business far too many producers, (but as a competitor not enough), sell with a transactional mindset. Sales Managers will say, “You can’t give the prospect the upper hand” or “Never give the prospect an opportunity to opt-out of the conversation.” As a producer you are taught to always push for the next meeting or next close. These are time-forged concepts in the Insurance Business. And to be completely honest I LOVE that most producers think this way.
Why?
Because if you are selling someone as a “Transactional Sale” then that prospect is buying as a “Transactional Sale.” There was NO RELATIONSHIP built! Yeah the prospect is pleasant when renewal time comes around, but you’re not a “Trusted Advisor,” you’re the schmuck that the prospect has to deal with every year to get Insurance.
The Rub
Steve’s Principle #1 is so basic but yet so Powerful. Right from the very beginning of the call the prospect senses that you have respect for them. NowI realize there are many additional steps that go into being a “Trusted Advisor.” I’m not delusional that giving a prospect the choice to talk to you is the BE-ALL, END-ALL, but it does set a tone of respect that you cannot go back and fix later.
Thank you
Ryan H.
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Great comments! I really appreciate your insights…
Well put Ryan! I have always pursued clients from the perspective of respect first. It does some time take a little longer to have them speak with you, but I find that when clients make their decision it's based on trust and not the price alone. Price is a factor, but value is builds a relationship. This also plays a major role in client retention as well. If people come to respect you and feel that they are respected as well they are not so quick to change should they be faced with challenges that would have otherwise made them consider someone else. because they have to learn to trust a new person again. More often than not they would rather call me and discuss options to address some of the life changes they are faced with.
Wow, how extremely relevant to the insurance industry! It seems like every day, more and more people are viewing things like car and homeowners insurance as something they can just pop online and purchase without having any issues. And luckily, without any serious claims or issues, people won't have any problems with that method.
But all it takes is one claim to find out that you had inappropriate coverage and that you must now take on a financial burden you were never prepared to take. That's why it's so important that the independent agents- like Ryan- stress their value. By working one on one with clients, meeting them, understanding their unique situations, these agents are uniquely poised to provide exceptional service.
A bit of a tangent, I know. But back to the original blog topic- people tend to be wary of a “salesy” approach, so working to establish a relationship is key. Great post!
Great comments! I really appreciate your insights…
Well put Ryan! I have always pursued clients from the perspective of respect first. It does some time take a little longer to have them speak with you, but I find that when clients make their decision it's based on trust and not the price alone. Price is a factor, but value is builds a relationship. This also plays a major role in client retention as well. If people come to respect you and feel that they are respected as well they are not so quick to change should they be faced with challenges that would have otherwise made them consider someone else. because they have to learn to trust a new person again. More often than not they would rather call me and discuss options to address some of the life changes they are faced with.
Wow, how extremely relevant to the insurance industry! It seems like every day, more and more people are viewing things like car and homeowners insurance as something they can just pop online and purchase without having any issues. And luckily, without any serious claims or issues, people won't have any problems with that method.
But all it takes is one claim to find out that you had inappropriate coverage and that you must now take on a financial burden you were never prepared to take. That's why it's so important that the independent agents- like Ryan- stress their value. By working one on one with clients, meeting them, understanding their unique situations, these agents are uniquely poised to provide exceptional service.
A bit of a tangent, I know. But back to the original blog topic- people tend to be wary of a “salesy” approach, so working to establish a relationship is key. Great post!