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Beware of becoming a commodity

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Recently, I was at a meeting of insurance agents. The astute leader asked the audience this question, “Who has the lowest prices?” All hands went up. Then he queried, “Who delivers great service?” Again, all hands went up. Last he posed the question, “Who offers expert advice?” And, no surprise, all in attendance raised their hands.

The lesson here is obvious:  If every agent in a large conference hall thinks he has (1) the lowest prices, (2) great service, and (3) gives expert advice and advertises that position, then all have become a commodity. Choose one. Choose another. There is no difference. 

I’d bet my bottom dollar that the vast majority of agents and advisors all over the country advertise the same basic points as their competitors. How do I know? Inspection. Open up the yellow pages, or the electronic version of that, and you’ll see for yourself.   

Come on, folks! If all are the same then all are an equally valid choice. How are consumers to decide from whom to buy, given so many choices?  

You cannot generate plentiful leads by proving that you are the same as everyone else. Your ads will likely be ignored; if you do get calls, it will be an unrepeatable coincidence. In order to create a consistent volume of highly qualified prospects, it takes real marketing proficiency. You can’t do it by simply following the pack.

How people buy

Granted, the questions I listed (above) were presented at a meeting of property and casualty agents, whose product is more easily commoditized than others. You could protest and say, “That doesn’t apply to my practice because I’m a ______” (fill in the blank: retirement planner, Medigap agent, investment advisor, life agent, etc).

Don’t fool yourself! 

A Medigap or health insurance premium will not differ based on the agent. A Genworth or New York Life policy will cost the same regardless of the source. An Allstate policy is an Allstate policy. Same thing applies to investment advisors; if there is no difference between advisors then why not just compare fees and go with the cheapest guy or gal? A mutual fund purchased from two different representatives is still the same product.  

This problem of commoditization applies to every kind of agent and advisor. In fact, it applies to every business in every country in the world. That’s a sweeping statement, I realize. But truth is truth.

So, why should a prospective client do business with you instead of the producer a mile down the road? There has to be a compelling reason to choose your services. People buy based on differences, not similarities. 

Are you promoting the difference between you and every other choice your ideal prospect has? No? Then you’ve volunteered yourself as an interchangeable part in the undifferentiated mass of advisors vying for the prospects’ attention and dollars.

Wealth attraction principle

There is a wealth attraction principle that you should apply. I learned it from Dan Kennedy and he credits Earl Nightingale. Paraphrased, it is, “Find out what everyone else is doing and do the opposite.”

That may be counterintuitive. From grade school on we strived to fit in, be liked, to be a part of the in-crowd. Middle school was worse and this urge hit an all time high in high school. Some people never get over this instinct to follow the crowd. It seems the safest option. How can you go wrong when you do what everyone else is doing? Why would you attract success now if you suddenly swim upstream?

Look around you. How many agents do you know that are doing fabulously well financially? Probably few. If you imitate the masses of struggling agents, you will be an underachieving producer yourself. Same program = same outcome. Average efforts = average returns. Emulate mediocre marketing = get mediocre results. If you don’t want to be one of the struggling agents, don’t do what they are doing. Makes sense, right? But it takes guts to do something new. 

Do you have the fortitude to be different?

A solution, part 1

If you don’t want to be an interchangeable part in your prospect’s mind, you must differentiate yourself. What you need is a Unique Selling Proposition (USP). Your USP is a distinctive benefit or service that you offer which a competitor cannot. It tells prospects why they should buy from you instead of any other agent. 

The three factors named in the opening of this article (price, service, advice) cannot be a unique selling proposition because everyone is doing them. Everyone does it = NOT unique! For the record, “Free Quote” is also not a unique benefit worthy of advertising space.

So, what do you bring to the table that sets you apart? 

  • Were you the manager of a machine shop who now is a commercial insurance advisor to similar shops?
  • Are you a single mother who knows the unique needs of women planning their own retirement?
  • Did you grow up on a farm and have a keen understanding of farmers’ financial concerns and risks?
  • Did you previously sell medical devices to doctors’ offices and now specialize in financial coaching for doctors and dentists?
  • Do you know the dirty tricks and secrets of CDs, and can you educate buyers on them?
  • Were you an Eagle Scout and now work with scouting groups and leaders to educate on financial security?
  • Do you have many clients from the same industry or profession and have unique insight to their habits, needs, wants and problems?
  • Were you disabled temporarily, widowed, struggled with an aged parent’s long-term care, or had some other experience that brings insight and passion to your work?
  • Do you offer something out of the ordinary, some type of analysis, specialized consultation, educational publication, newsletter or service that no one else does?

These are but a few examples off the top of my head to get your mind working in that direction. The answer lies within you.

Hopefully, something comes to mind immediately. If not, start a list. Inventory your life, personal and professional. How do you spend your time? What are your passions? What do you excel at? Who do you associate with? This exercise may be uncomfortable. But how comfortable is it, really, to have too-few leads and low sales production? This exercise IS work. But it is a lot less work than cold calling and grinding away without a concrete plan.

By the way, you may notice that having a Unique Selling Proposition fits hand-in-glove with target marketing. One leads to and enhances the other.

A solution, part 2

Once you have identified what is different and valuable that you can offer, make it your USP. Then promote it! Create a unified theme to all your marketing that aligns with your USP. Use it in all media — ads, yellow pages, website, business card, sign, etc. Make your USP an integral part of your overall marketing plan. 

Collect testimonials of persons you have helped that fit your USP. Use those comments (with permission) in your marketing. By doing so you can create a “herd instinct,” that suggests that everyone in the designated group is using your service. That is the sweet spot you want be in.

Differentiation is the key to success

You can create your own leads by being the opposite of a commodity. Offer something unique and valuable. Advertise that message on the right channels to the correct audience. There is no way to lose with that formula. It works all over the world. It works in every industry. It can work for you, too!

© 2012 Victoria Eden. All rights reserved.