Differentiation

"When you fail to differentiate yourself from another service firm, the competition is reduced to choosing between commodities. But, law firms, accounting firms, management consulting firms, financial service firms, insurance firms, and the like are certainly not commodities – unless those in the industry commoditize themselves by failing to differentiate their offering from that of another."

The author went on to say that any buyer, faced with competing firms that all seemed "near clone-like," will either stay with what they have or make their decision based on the best price.

The above quote and reference is from a long blog dealing with the process of responding to RFPs in writing. You can read the entire article here. The message is applicable whether the "proposal" is in response to an RFP, in writing, or verbal. And the point is clear - your ability to differentiate yourself from other insurance agencies and, perhaps more importantly, from Internet carrier and consolidator sites, is what will enable you to survive and thrive in this economy or any other.

It's NOT all about the economy

Even in this difficult economic environment, is price the driving criteria for any purchase? When you've lost an account, it's easy to assume so - especially in the absence of a more definitive reason. When clients tell me it's all about the economy, I'm more than a little skeptical. Our own unscientific research shows that, whether it's insurance or groceries, price is almost never the only reason why anyone selects one product or service over another.

And now there' s research that supports my theory - and the "buyers" in this case are insurance agents. "When it comes to an agency's satisfaction with its personal lines insurance companies, commissions do not rank as tops. Nor do commissions rank second. In fact, out of six satisfaction factors, compensation from an insurer ranks dead last, according to a new industry study. "

You can read the article on the Insurance Journal website but it's not surprising. You select your carriers based on a whole package of customer needs and preferences, knowing that it's value, not price, that will influence their purchasing decision.

A good thing to remember if you're losing business and wondering why.