a person holding money about to pay an insurance agency who gave him the lowest price

It’s no secret that the insurance industry is a highly competitive space to be in. Perhaps the most popular way that insurance agencies secure business is by trying to keeping prices low. Especially when it comes to mandated automobile and homeowner’s policies, people want to spend as little as possible without compromising on quality. This is why so many agencies focus on making sales based on price.

While that might seem like a good business-building strategy, it’s riddled with problems. Yes, the price that consumers pay for insurance is important.  However, there are other things considered even more critical—not just for agencies but also for their clients.

Creating Long-term Trusted Relationships

Consider this scenario. An individual receives a marketing email from an agency that offers cheap automobile coverage. Whether on a relatively tight budget or perhaps uninformed, they decide to buy a policy.

At first, everything seems fine. However, the policyholder then gets into a car accident. What should’ve been a straightforward claims process turns into a nightmare. Ultimately, it takes a long time for that person to get the money owed, and even then, it isn’t the amount they anticipated because their “cheap” policy left them drastically underinsured.

Here’s another scenario. Someone opts for a cheap homeowner’s insurance policy in response to an agency’s advertisement. It meets the lender’s criteria but just barely. Even though the coverage isn’t great, the low price proves too enticing to ignore.

Then, pipes in their home freeze and burst. Although the cheap policy covers most of the damage, the policyholder can’t reach their agent, or any other agent for that matter. That person has to wait several days to get any resolution, and the quality of customer support is just as bad as they’d heard about.

These aren’t far-fetched stories but real situations that people experience. Sure, these people saved money, but only in the short term. These individuals would’ve gladly paid a little more to have confidence in their agency and agent.

Tips for Building Trusted Client Relationships

Remember, as part of the everyday service your insurance agency provides, you want your agents to continually look for ways to provide clients with excellent yet cost-effective coverage. That ensures the policyholders always have the right protection but at the lowest price available. So, while you can certainly grow your agency by letting consumers know you offer affordable solutions, don’t make this the primary focus.

An excellent way to stay on top of pricing while building a trusted relationship with your clients is to implement an excellent insurance agency management system. For one thing, you can customize it based on the policies you sell and your company’s overall objectives.

Beyond relying on a robust insurance agency management system, here are some ways to build trusting relationships that last.

  • Become an Expert – The more you and your agents know about the insurance industry and the products sold, the more prospects and existing clients will consider your agency “the expert.” By nature, people prefer to get information or make purchases from an organization they believe is on top of its game. This mentality certainly applies to the insurance industry.
  • Stop Overselling – You don’t want people to compare your agency with an unsavory auto repair shop that constantly tries to get customers to buy things for their cars they don’t need. Well, if your agents oversell, that could happen. Remember, consumers are smart. So, once they feel an agent is just trying to make more money by selling unnecessary coverage instead of focusing on their best interests, they’ll go elsewhere for insurance. Instead, focus on advising your clients and let them make the ultimate decision.
  • Respect the Industry – Even as part of a highly competitive industry, you never want to say anything negative about your competition in front of clients. Doing so would likely make them question what you say about them behind their backs. Badmouthing the competition is a poor business practice that destroys client relationships as opposed to building them.
  • Promises Made – Another way to build long-lasting and trusted client relationships without putting all your efforts on price is to follow through on promises made. Whether that involves getting them a more affordable policy or better coverage, applying a discount, or something different, make sure you can do exactly what you say. This is another way the right management system can help. It’ll keep everyone in your agency on track so that promises don’t get broken.

The Bottom Line

Yes, providing your clients with affordable coverage is important, but it’s not the most important factor. The goal is to build relationships with the people your agency serves and make sure that they’re properly covered. As a result, you’ll have not only their business but also business that comes from their family members, friends, and other referrals.