3 Common Factors Influencing Consumer Behavior in Insurance

Insurance is a huge investment. Finding an agent and deciding on coverage requires a lot of research, several tough conversations, and much careful thought. It can be an overwhelming process for even the most prepared of clients--which is where you come in. But in order to get referrals and provide the best service possible, you need to understand the factors influencing consumer behavior when potential clients start looking for insurance coverage.

What’s going through your clients’ minds when they are shopping for insurance?

Why do people buy insurance?

Most people know that insurance is important. But because it is such an intangible purchase, many people are driven to purchase only when a need arises. Oftentimes, this need takes the form of a major life change, such as:

  • A new baby
  • Marriage
  • A different major purchase (like a new car or a new home)
  • An unfortunate event - such as the death of a loved one or an illness in the family

Understand that most of your clients will not come to you when they are coasting through their day-to-day lives. If someone is on the hunt for insurance coverage, you can anticipate that they are likely experiencing some kind of major life change, and have been driven to think about their future as a result. Harnessing this--and understanding what they need to feel secure--is crucial to serving them with a solution that meets their needs.

How do they make purchase decisions?

So you’ve anticipated and acted on a potential client’s needs. You’ve written a stellar quote and are close to signing. But what is going through their mind?

According to some research, there are three reasons why people seal the deal on an insurance quote: peace of mind, convenience, and price. These psychological motivators are the difference between a deal and no deal--and between a loyal, multi-line client and someone who signs with another agent the next time that a need arises.

In order to win over customers and keep them loyal (i.e. reduce your own churn rate), you’ll need to start conveying your value. It's not just about price. A book of business that is over-exposed to price discussions is vulnerable. Clients today have unlimited pricing information at their fingertips. If they experience and recognize the value that they receive from you, they will stick with you. If you didn't believe in your value, you wouldn't be in business. So if you're not selling your value, it's time to start.

How can you meet your customers where they are?

You know that your customers are likely in a period of great change. They want to feel secure, but they also want to get a good deal. This is why it is important to establish relationships with your book of clients. If you know when they are going through these changes, you can do a better job anticipating their needs and keeping them happy. Nurturing these relationships also puts you in a good position to ask for (and receive) introductions to other potential clients.

To sell life insurance, you need to have a conversation that involves deeply personal questions and potentially expensive recommendations. A relationship of trust will be a prerequisite in most cases. And like any relationship, that requires effort. It requires nurturing. Nurturing is much bigger than selling. It means doing things such as:

  • Meeting regularly
  • Communicating appreciation between meetings
  • Showing care and credibility
  • Educating and empowering
  • Providing value

An agenda that nurtures client relationships will produce something now and in the future. It’s hard to make an argument against an agency model that focuses on nurturing client relationships. Nearly all of the most successful agents do it year-in and year-out. By contrast, the agents who struggle the most typically overlook this critical agenda in favor of “getting something right now.”


Pivot Your Insurance Agency Towards Sustainable Growth Are you an insurance agent who feels that your agency is stuck? Is your team grinding new leads each month yet your agency never seems to grow? Client Focus has worked with thousands of agents over the past 15 years just like you. Our purpose is to help your insurance agency pivot onto a path to sustainable growth.

A Practical approach to building sustainable growth for your insurance agency

By Client Focus | June 25, 2018 | insurance sales tips |
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