Insurance Myth Busters

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According to recent estimates by the Insurance Research Council (IRC), roughly one in seven drivers are uninsured.  A majority of drivers only carry the state minimum limits.

The Common Myth

If an uninsured or underinsured motorist hits you, many think, no worries, they have coverage, or my insurance will pay.

Myth Busted

Your coverage is limited to the amount of coverage you have on your policy.  Therefore, if you purchase minimum limits you would have little coverage if someone hit you carrying no insurance. Adding an endorsement to your personal umbrella policy will place higher limits of coverage over and above your auto policy uninsured motorist coverage.

Why Insurance Is More Than A Policy

The example above is an excellent example of why it is important to have an agent who knows and understands insurance, and one who can communicate complex issues in “English”. This allows our customers to make intelligent choices regarding their insurance.

Your insurance policy is only as good as the agent who placed it. Your agent should be asking you questions and learning about your individual risks and provide options as to how to treat your risks. When your needs change or your situation complicates, you don’t want an automated phone tree or cold cyber-agent. You want to talk to compassionate, honest insurance experts – that’s our team

Why Selling Is Dead and Education Is Thriving

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You can read articles every day on the internet about how traditional selling is dead, and that we all need to embrace the new age of selling.  Here are some of the titles of articles on selling I found during an internet search this last month.

  • “Selling is Dead, Sales Live On”
  • “Social Media is the New Producer”
  • “Is Relationship Selling Dead?”
  • “How to Sell–New Age Terms”
  • “Sell with Intensity”
  • “Always Be Closing”
  • “Tell Your Story When Selling”

Now I am sure all these articles have good information, but many are missing the point.  If I had to re-title these I would start with; “EDUCATE, DON’T SELL.”  However, that may be easier said than done.  So I thought it might be fun to identify a number of steps we use to change a mindset from selling to educating. The result, hopefully, will be a new way of thinking about insurance sales, and customers who demand more from their agents.

How the best sales people can look and act like educators

  • We explain our mission of providing insurance education, with or without a sale.
  • It is important to develop risk solutions that do not involve insurance.
  • We will utilize other professionals to help create solutions and educate our clients.
  • There is real value in looking for problems, then create solutions.
  • We volunteer our advice upfront and suggest an alternate solution that will likely serve our clients better.

Selling is educating, so the more we teach clients about the solutions, value, and benefits we offer, the more educated our customers will be.

The Problems Many Businesses Have With Their Agents

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I talk to people regularly who tell me that they are not happy with their agent.  I hear statements like, “My agent does not understand my business”, “My insurance program is not matched to my business”, or “My agent always tries to sell me more insurance.”  These are common issues in the business community. I have found that the key issue with most of these concerns has less to do with the agent, and more to do with how the customer goes about selecting the agent.  What?–How can that be true?

Most agents are just trying to sell insurance and move on to the next account.  They are not bad people, but they have been trained to sell.  Our agents are different; first and foremost, we are trained to serve. 

Too often customers go about selecting their agent through bidding out their insurance and then selecting the lowest bidder.

Here is a great quote form the movie Armageddon, when the team of oil drillers are sitting in the space shuttle ready to lift off, and having second thoughts.  “You realize we’re sitting on 45,000 pounds of fuel, one nuclear warhead and a thing that has 270,000 moving parts built by the lowest bidder?  Makes you feel good doesn’t it?” Rockhound played by Owen Wilson.

My contention is that the process by which clients select their agent is flawed, and there is a better way.  By only looking at the lowest price, you are missing the most important part of the process; getting the best possible combination, of coverage, risk management, customer service, and price designed for your specific business.

If buyers were to select agents on something other than price, they would be much happier.  Here is what to look for in an agent:

  • A good agent will have access to many markets, making price consistent between most agents.
  • Experience.
  • Staff experience.
  • Special training and credentials.
  • Have conversations with prospective agents.  Simply asking questions does not mean you have to work with them.  This is a chance for you to get a feel for how they work and if you feel comfortable with them.
  • A good agent needs a high emotional IQ.  This includes the ability to listen and empathize with clients on a deeper level in order to discern what they really want and need.

The Downside of Poor Customer Service

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Over that past year or so, we have been suggesting ways to improve how insurance is delivered. We have stressed that price shopping can actually cost the buyer more money in the long run; and that developing relationships can lead to a better risk management program.  Now, we would like to examine the downside of poor customer service. Poor customer service can impact a business negatively in many ways. This is especially true for small businesses that rely on repeat business and positive word-of-mouth advertising for their success. Here is a staggering fact: in 2014, U.S. businesses lost $50 billion due to poor customer service. (source; newmeida.com)

According to the latest numbers, here is how customers will act after they have received poor service:

  • 59% of people will change agents
  • 30% will tell others not to use your firm
  • 25% will post a negative review on social media

There is nothing worse to an organization than having angry customers and dealing with lost business. Here are some of the outcomes of poor customer services:

  1. Low employee moral
  2. Employee turnover
  3. Reduced income
  4. Loss of potential customers
  5. Loss of reputation

If you do not want your business to be among those companies that have to deal with the above list, your goal must be to use every service problem as an opportunity to impress your customer. When mistakes happen, use proactive recovery as the means to create customer loyalty. Next month we will give you tools to help you recover from a customer service issue.

Win the day!

Keep Your Agency Healthy Through a Client Service Review

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Do you ever sit down with your team and complete a client service review? If you don’t, let me try to convince you of its value. A client service review is like an annual physical. It is necessary for the health of the agency, and it helps everyone better understand the client’s needs. Your review should include the producer, account manager, claims person, and any other team member that touches the client. The client service review should only take a short time, but the information can be invaluable in making sure that the team is on the same page to deliver outstanding service to the client.

Here are some of the topics that should be included during a client review:

  1. Review all open claims to make sure they are progressing correctly.
  2. Does the client have any service issues or concerns?
  3. What are any issues facing the client or the industry?
  4. Does the agency have any new services or solutions to offer?
  5. Have there been any personnel changes with the client?

Having this information can help build a true partnership with the client. If there are any issues or concerns, it is best to address these well before the renewal. By doing so, the client will feel they are being treated like a partner and will in turn treat you like a valued business partner, not just an insurance agent.

Can Selling And Customer Service Coexist?

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Traditional insurance “selling” has not always gone hand in hand with good customer service. Traditional insurance selling often consists of a sales person trying to convince a buyer of the benefits of the product he/she is selling. Conversely, good customer service involves determining the customer’s needs and concerns first, and then determining how to best provide solutions. The difference is in the mindset of the sales professional. You can actually provide good customer service while “selling” if you view selling as offering a value added service to your customer. This starts with how the sales professional views the process.

If you are looking for something different in the insurance buying process, evaluate your next insurance meeting using these standards.

  • Does your agent ask questions to determine your needs and concerns?
  • How fast does the agent offer insurance products as the only solution, if it in the first 15 minutes you have a traditional insurance sales person.
  • Do you feel your agent knows and understands your business and industry?
  • Has your agent ever offered a non-insurance solution such as a contractual risk transfer?

We would encourage you to establish a set of standards by which you evaluate your insurance provider. Do they value relationships, do your values line up together and do they value the relationship? If you can answer these, you are on your way to developing a trusted partner.

Why A Trained Agent Is Better Than An Untrained Agent

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Agents come in many shapes, sizes, and qualifications.  Every insurance agent must go through a basic level of insurance training in order to obtain a license. In order to keep their license, an agent must take a minimum level of training annually.  Unfortunately, many agents never do any more than the minimum. There is so much more to know about insurance than just the minimum of training.  It is imperative that all agents continually keep trained and educated in order to create, and deliver insurance and risk solutions to their clients.

Training benefits to agents and agencies

  • Enhances your company’s reputation. 
  • Employees desire professional development.
  • Helps agency attract and retain the best employees.
  • Increase the collective knowledge of your team.
  • Boosts your retention.
  • Allows you to truly provide “trusted advisor” solutions to your clients.

Training benefits to clients

  • Allows agents to bring a much broader knowledge base to problem solving.
  • Agents are more equipped to educate clients.
  • Provides a basis for providing business solutions beyond just insurance.
  • Trained agents are generally more knowledgeable about many different industries.
  • With a trained agent you can lower your cost of risk.
  • Professionally trained agents understand in greater detail how insurance is designed to work.
  • Highly trained agents can help you navigate difficult claims to your satisfaction.
  • Training is essential for knowledge transfer. It’s very important to share knowledge.

Professional development can come in many forms. But having an agent who is trained will always provide a broader depth of skill and experience to the client.

Our Holiday Wish… That Insurance Agents Become Trusted Advisors

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This is the time of year when we give thanks.  We would like to thank our clients and market partners for their support this year. We would also like to thank all the agents who have followed us, and who are changing the way they do business. We continue with our mission to encourage insurance buyers to think about insurance as a service rather than a commodity, and to challenge insurance agents to strive to become trusted advisors.

Are you sought after by your clients for more than just your insurance knowledge? Do you spend time educating yourself on your client’s business needs? Are you aware of the trends and issues that will impact your customers next year? If you answered yes, you are on your way to becoming a trusted advisor.

What Is A Trusted Advisor?

A trusted advisor is an agent who becomes so important and valued by the client, that the client seeks advice from the agent on a number of issues other than just insurance. A trusted insurance advisor becomes part of the firm’s consultant team, which includes attorneys, accountants, and human resources consultants.  More than anything, being a trusted advisor is about establishing a set of behaviors.

Behaviors Associated With Trusted Advisors

  • Always put the client first. Do the right thing even if it means the organization does not get the work.
  • Solve problems rather than sell insurance.
  • Understand all the issues facing the client, well beyond insurance.
  • Be highly trained in business management.
  • Bring a portfolio of practical experiences, relationships with others, an understanding of business dynamics, and market trends.
  • Be willing to connect a number of business resources that will have a positive impact on your client’s business.

Do You Want To Avoid Unhappy Customers?

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Does anyone like having an unhappy customer?  Do you really like having to deal with a frustrated client? I do not; and I try really hard not to have them. According to customer service experts, customer satisfaction, or should I say un-satisfaction, can be boiled down to these areas:

  1. Customers do not feel heard
  2. Customer expectations are not realized
  3. Promises are not kept
  4. Agents are selling policies, not solving problems

In one survey by the Better Business Bureau serving Chicago and Northern Illinois, researchers found 30% of unhappy customers will simply move their business.

How To Improve Customer Satisfaction

Stop selling and start solving problems — It is easy to sell a client an insurance policy, but that may not always be the best for the client. There are other solutions like self-insurance, contractual transfer, or even a modified policy with high deductible.

Focus on personal service – Take care of your customers like they are real people; because they are. Listen with understanding and sympathy.  The customer’s first impression of you is all important in gaining co-operation. You can do this by acknowledging not just the facts of the situation, but also acknowledging how the situation made them feel. For example, “It must have been frustrating for you to bring home our product only to realize it wasn’t the right model for your needs.”

Take responsibility — Never, ever blame or make excuses.  Instead, take full responsibility and the initiative to do whatever you can to solve the problem as quickly as possible.

Always give your customer options — Never limit your solution to just a quick insurance fix.  Ask questions to get to the issues, and then offer more than one alternative.

Show them, don’t tell them –– Present the solution, or option, to the client and then show them how you will respond. The sooner you deliver on the solution you promised, the quicker you’ll be creating another friend of your business.

We all want happy clients, but it does take work. A happy client is a happy business! GO win the day!

What Does Outstanding Customer Service Look Like?

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Have you left a business and thought, “How are they even in business”? Or have you gotten off the phone and said, “They don’t understand or care about my needs or even respect me”?  We have had those experiences, and we don’t ever want any of our customers to feel that way about our firm.

Outstanding customer service can mean something different to each person. However, we believe there is a basic underlying attitude of a firm that provides outstanding customer service. We would like to share our thoughts on what our firm believes contributes to outstanding customer service. Outstanding customer service is a mindset that we want every employee to have.

We practice three basic principles when relating to clients: empathy, appreciation and helpfulness.

  • Empathy – We will consider and understand your opinion and needs. We will educate you on the details of insurance so that you can make an informed decision.
  • Appreciation – You are important to us and you should be told so. We will value our relationship with you and treat you with respect and trust.
  • Helpfulness- When you call our agency you will talk to a licensed professional who lives and works in the community. We will listen to your requests and provide thoughtful responses. We will always say thank you. We know you have choices when it comes to selecting your insurance agent, and we appreciate that you have chosen us.

Here are other guiding principles that every agency should live by

  • Do what you say you are going to do. If you say the certificate will be delivered by 10:00 am Tuesday; deliver it before or on time.
  • Own your mistakes. No agency is perfect, so when a mistake is made, take responsibility and identify corrective measures to prevent it from happening again.
  • Care about the customer. Genuinely care about your customers and their experiences. When a loss occurs we will get involved as if the loss happened to us.

Insurance is not a product. It is a promise and a trusted relationship. Here at Reichley Insurance Agency, we are not going to sell you something you don’t need. We want to talk to you, determine your needs, and get you covered at the right price.