To sell more insurance, it is crucial that you understand how people think. Insurance agents with high conversion rates often have a deep understanding of certain fields of human behavior and psychology. It is a skill that goes beyond studying buyer personas; it is about knowing what makes people tick. Only through real understanding of people can you break their insurance buying barriers.
Few people would readily admit to a lack of individuality. And while each person will, indeed, have their unique quirks, it seems we are all driven (and influenced) by some common psychological principles. That revelation is both frightening and exciting. On one level, it exposes human vulnerability, but at the same time, it offers pathways through barriers that might prevent us from making good decisions.
The bottom line is that people do not like to be sold anything, even if the product on offer will ultimately improve that person’s life. If the perception is that the salesperson is pushing the product, barriers instinctively become raised.
Take life insurance, for example; something that can be highly beneficial to any family. According to a study by LIMRA, some 35 million families in the U.S. do not have any life insurance. That is despite the fact that 50% of households claim they could do with more insurance. There is a clear mismatch between what people want and what they do. One reason for that might be because many agents are selling insurance rather than appealing to prospects on a psychological level.
The book Influence, by Robert Cialdini (which is essential reading for any sales person), details six principles of persuasion. The following three are most notable for insurance agents, and particularly applicable in this the digital age.
Reciprocity
The concept of giving things away for free is still a tricky one for many salespeople to comprehend. This is nothing new though. Enticing customers with free samples has worked well for many companies over the years. One of the most common examples can be witnessed in supermarkets across the country.
When a smiling assistant lures shoppers to her portable stand and offers them a chunk of delicious ham, the supermarket owners are relying on reciprocity. Even something as seemingly insignificant as a free chunk of ham can have a powerful psychological effect on us humans. The tasty free meat can trigger a powerful urge to reciprocate. And in this case, that means buying a pack or two of the ham in question.
From free digital content to physical goods, the power of reciprocity can be leveraged to increase insurance sales. For agents, that might mean giving away high-quality information via the business blog or through social media.
Your free offering does not necessarily have to be directly related to your industry. At a trade show, for example, your agency might stand out if you are the ones giving out free slices of delicious ham. Of course, for compliance reason, you cannot offer anything in exchange for the purchase of a policy. Your free offering will pay dividends later on in the relationship between you and the prospect, though.
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Authority
People are hardwired to respond to authority. If something is perceived as authoritative, they are more likely to pay attention and act on any associated advice. That is the reason why many companies attempt to link their products and services to professions of authority such as doctors or scientists. The psychology of influence is heavily at play when the advertisements read “nine out of ten doctors recommend this!”
The “Milgram experiment”, described in the book Influence, paints a strong, if a little sombre, picture of the power of authority. During the experiments, volunteers were asked to press a button that would deliver an electric shock to a person connected in another room. The shocks delivered became increasingly uncomfortable for the victims with each press of the button.
Of course, no one was actually hurt in the experiments. The victims were played by actors. But the results are fascinating. Ordinary people continued to deliver a series of seemingly painful electric shocks to another person simply because they were being told to do so by someone in a white lab coat.
As an agent, it is important to develop an air of authority – You can become the man in the white lab coat. Prospects will be more inclined to buy insurance on your recommendation if they perceive you have authority.
Social Proof
The use of social proof is nothing new, although the way it is established has changed somewhat. Since the beginning of civilization, people have been inclined to follow trends and buy things that have been endorsed by their peers. If someone recommends your services to a friend, it is one of the most powerful endorsements you can get.
A product or service enshrined in social proof incorporates several psychological aspects of influence, including authority. What makes this the best time for social proof is that the digital and social media age makes the principle even more profound.
With a simple tweet or status update people can broadcast to a huge network of friends, and in the process, influence large swathes of people to follow a brand, buy a product, or read a piece of content at the click of a button.
The great thing about social proof is that it works whether we know the person or not. If you have a celebrity on your books, had some good press around your agency, or received glowing feedback from previous customers, you can use it to enhance your social proof and influence others.
Understanding the psychology of what drives people to make purchasing decisions is crucial for successful selling. This practice is not trickery or underhand tactics. It is simply a way to help prospects overcome their own instinctive barriers. By understanding certain psychological triggers, you can adapt your marketing approach to ensure that your prospects never have cause to raise barriers in the first place. Besides, you are selling products and services that will improve their lives. They will thank you for it in the long run.
