Price vs. Value: A False Dichotomy

By Christian Moore

In Business / Insurance / Technology

Are you familiar with the concept of a false dichotomy?

A false dichotomy occurs when you’re given two options and made to believe they are the only two options when, in fact, there is at least one if not numerous viable choices.

There is a narrative in the insurance industry that is founded upon a false dichotomy. See if it sounds familiar.

A local agent loses a policy to (let’s say) GEICO. They then get on social media to rant about how insurance is not a commodity and if other agents out there sell insurance like it is, THEY are the problem with our industry.

So the argument, which almost always occurs without an opponent, creates the false dichotomy of price VS value.

The problem with the price vs. value conversation is that it removes the client from the hero position of the story.

It places insurance as more important than our client’s journey. I promise, that if you don’t figure out how to insert yourself into the ongoing journey of your clients, you will be beaten by Amazon before this decade ends.

Emerging Trend: Watch Out!

Amazon? Yes, imagine with me: You begin browsing on Amazon and a message appears, “Hi Dave. We see your normal time spent shopping on our site is exactly 8.5 minutes. While you’re looking around, do you give us permission to attempt to save you $1,000 on your car insurance?”

That is on its way, my friends. And if you are still arguing with carrier reps that “your clients” don’t want electronic policy documents and can’t figure out how to e-sign, it won’t be long before those same clients choose Amazon over you.

Perception is reality. Our clients think insurance is a hassle; for the most part, they’re right.

We have to recognize that for the last 50 years, we have grown out of touch with the desires of our client base. Within the next two years, millennials and Generation Z will make up 90% of the world’s workforce. Anyone inside these demographics can decide whether you’re trustworthy within three minutes. They have been trained to read reviews, look for personality, check out social proof, and see if you reflect the values they care about. They make that decision before they ever contact you about doing business.

So we need to ask ourselves one question: What is the most valuable thing for my client? In a world filled with notifications, selfies, self-driving cars, robots that clean your floors, and speakers that play your favorite song while ordering your grocery list and answering the question your kid just asked, my client’s most important commodity is time. Price isn’t merely financial; how much time a client has to get a quote has a time cost. How much hassle they have to endure when filling out forms has a mental energy cost. If perception is reality, convenience is king!

The Truth

When thinking about price and value, keep these two truths in mind:

Truth 1: Clients almost exclusively buy insurance on price.

Truth 2: Insurance has an inherent value that exponentially increases relative to the expertise of the agent presenting coverage.

For 2020, it is my heartfelt recommendation that you look at your marketing plan and tune it to this reality.

A bad salesperson sells you something you don’t need when you’re not ready to make a buying decision.

An okay salesperson sells you something you do need when you’re not ready to make a buying decision.

An excellent salesperson sells you something you do need when you’re ready to make a buying decision.

Find a buying process and create a strategic alliance within that process. Use automation and AI to allow your clients to get what they want, the way they want it, and when they want it.

You’ll still be able to provide value and savings. I promise.