Insurance Selling: The Pride and the Glory


When Henry Ford was accosted by a taunting shareholder that a Chevrolet was cheaper than Ford, he is said to have responded, “Our competition knows what their product is worth!”

The automobile business makes up 20% of America’s GNP. This huge industry depends on brisk sales to take-up it’s factory capacity. It is a very competitive business. There are many attractive models from which to choose. Consumers who buy these new cars, which range in price from $17,000 – $100,000 plus would normally decide on quality, features, style, comfort, appearance and prestige as to the purchase of a new car. These virtues have been
pushed to a subsidiary consideration by the single element of LOW PRICE, LOW DOWN PAYMENT, LOW INTERST rates.

* Are there no more quality / benefit car salespeople alive? Are there none being trained?

This massive advertising by the auto manufacturers is having a debilitating effect on all industries. Retailers are constantly stressing “sales, rebate, no payments until 2005”, etc.

By now the consuming public must realize all this is insincere and meaningless. Those who must profit in order to survive are surviving. Low price is an artificial threshold intended to lull people into exercising an opportunity to buy at less than what would otherwise be a standard price. Auto manufacturers make a lot of money on financing and leasing their cars. GMAC as an example finds it can do better with it’s extra cash reserves by engaging in Home Mortgages (DITECH) even at the low rates of 5.25%. It is more productive than the 0.05% offered by banks on CD’s.

In the world of insurance, brokers are used to working with regulated rates that cannot be reduced, altered or amended. The choice available is a lower price from a marginally safe company and a higher price from a well rated and respected company. An exception is the Internet Sales and Zero Commission, fee based plans.

If a person makes a mistake on an automobile and pays $1,000 too much, he/she still gets the utility of transportation. A $1,000 cost differential spread over 3 years of ownership and 45,000 miles of use means the overpayment has amounted to only .02¢ per mile more.

If a person makes a mistake in the purchase of a disability policy by selecting a seemingly low cost association or group plan instead of a strong individual plan and it terminates just before the person becomes seriously ill or is disabled in an auto accident, the consumer has made a mistake of thousands, perhaps even hundreds of thousands of dollars. Low price has resulted in a terrible loss in such a case. With most products the utility is furnished, only the price paid varies. With disability insurance, a person either has it or doesn’t have it and prices becomes unimportant.

“The essence of low premium outweighs the odor of the risk!”

Thomas R. Petersen MBA, RHU, DFP

*Quality / Benefit Car Salespersons

“Mr. C” sold cars for a living. Even though he earned no trailing commissions on cars he sold, he pampered his customers. One would be foolish to make an appointment with the Dealers Service Dept. for Mr. C would handle the details, make sure the customer was treated with dignity and respect and would not be sold unnecessary repairs or service and above all else, would be charged correctly.

Mr. C would loan a customer his car and take the customers car in for service. When the car was returned, it was freshly washed and vacuumed. Mr. C’s customers became his customers because of his cared and treatment.

Before long Mr. C created a following. He had referrals to the extent he had to take in a partner. Low price? NO! A fair price plus exemplary customer service made him a person highly rewarded and highly distinguished in an occupation known for undependable and insignificant sales people. Mr. C’s reputation became a conversation subject at business and social gatherings It became a matter of consumer prestige to state your new car was bought
from Mr. C.

A large multi-ownership dealer is testing “Guest Amenities” for customers. It lists 17 Guest (customer) Services it provides such as flat bed pick-up and delivery of ones car for service. Six-week reservations are required for this service. Breakfast, movie passes, shoe shines, chair massage, air bag demonstrations, manicure, enjoy our Koi Pond, children’s playroom and others are on the guest amenities list. But this is a cafeteria approach in which the
customer has to be pro-active to take advantage of the guest amenities.

Maybe the guest amenity budget would be better used to train some Mr. C’s.