The Art of the Close: Ask Questions to Get Insurance Clients to Buy on Value, Not Cost


The Art of the Close: Ask Questions to Get Insurance Clients to Buy on Value, Not Cost
By: Michael Miller, Smart Choice® State Director

Most of the time, “all people are created equal” is true. But unfortunately, not everyone enjoys a natural talent for sales. Some agents struggle to make $35,000 to $50,000 per year, while others make earning $1 million a year look easy.

When I asked the top agents in my region what made them such successful salespeople, they shared with me that a professional sales presentation is their top priority. “Ad libbing is for amateurs,” they say. They rehearse every presentation for every client.

For an artful close, ask the right questions

Focus on making your presentation the most valuable and comprehensive it can possibly be for your clients. You’re not just selling insurance, you’re consulting with your clients on the amount of risk they’re willing to accept. Your job before and during the presentation is to determine your client’s current coverages and current needs based on their risk tolerance.

How you determine what your clients need sets you apart from the typical insurance agent. I encourage agents to use a presentation template that prompts them to ask questions about what’s important to their clients. How much risk are they willing to accept with their auto and homeowners insurance coverages? Life? Health? Business? If you design an effective presentation template, by the end of your meeting, you’ll have:

  • set high expectations for the level of customer service your agency offers.
  • determined appropriate coverage for auto and homeowners or renters insurance.
  • assessed your client’s interest in life, health, and retirement products.
  • discovered if your client requires business insurance.

An example of closing on value vs. cost

Asking questions about acceptable risk and offering solutions tailored to your client’s answers eliminate the price objection almost every time because you’re selling on value, not cost. Their own answers to your questions make them aware that they need much more than basic liability.

If your sales presentation had not uncovered their needs, all you’ve done is compete with their current agent on cost. An effective presentation identifies risk tolerance and offers solutions. It allows you to compete on value. It earns you the right to ask them to pay a little more each month for insurance because it explains where the extra cost is coming from: a more comprehensive insurance program.

Captive vs. Independent Agents: Which route should I go?

If you’ve recently looked into opening your own insurance agency, and you aren’t sure whether you should go the captive or independent route, look no further.

There are positives and negatives to both models of insurance businesses, but it really comes down to individual needs and wants. What are you looking to get out of the business? How experienced are you?

Captive Agents

Positives: Owning and operating a “captive” insurance agency means working for one company. You will only have to learn one company’s products, policies and guidelines. There’s usually ample training, assistance setting up your agency, and you won’t have to worry about doing any of your own advertising and marketing because you’ll have the added benefit of a nationally recognized brand. You will also likely have a more reliable form of compensation such as a salary and benefits, plus sales bonuses depending on how well you do.

Negatives: You will only have one product to sell your customers. Even if they are not the best priced or most suitable product, they are the company you represent, therefore the product you must convince your customer to go with. So if your parent company stops selling a certain line of insurance, you won’t be able to sell it either. You may also be obligated to push certain products you feel your client doesn’t need or want. Your main priority, as a captive agent, will be to build business for your parent company, and you will likely not have the freedom to perpetuate your agency to whomever you wish when you’re ready to retire.

Independent Agents:

Positives: Your main priority for your independent agency will be to build your own book of business and do the right thing by your customers. You can make your own hours, your own rules, and market your agency how and when you want. You’ll be able to specialize in any, and as many lines of business as you want. Best of all, you will be able to provide competitive quotes for your clients by shopping a multitude of different insurance carriers products! This means if you can’t find a suitable product with one carrier, you’re free to search out another carrier with a more suitable product line for your clients’ needs.

Negatives: As an independent agent you will be a small business owner and entrepreneur. This could be viewed on a positive OR negative depending on the person. You will need capital to start the business. You won’t have a steady income as you begin your agency and start your book of business from scratch, because you’ll earn money solely based off of commission. The money you do earn will have to be wisely put back into the agency in order to grow for the first couple years. You may also have trouble obtaining contracts, or “appointments,” with reliable and reputable insurance carriers in the beginning – a Managing Agent Group or “MGA” (company who helps you get carrier appointments) can help you with this part of the process.

Which type of agency is right for you? If you’re an established agent, comment below and tell us why you decided to go the route you did when you opened your agency!