Commercial Insurance Industry – Value Proposition Statement: What it is and Why you Need One
Learn the value of drafting a value proposition, the competitive advantages that you can reap and pick up some quick tips!
Your business’s value proposition is arguably the most important element of your overall sales and marketing messaging. In the industry of commercial insurance, where it is often hard to differentiate, these advantages can translate into large financial gains. From prospecting to closing, your value proposition, or “unique selling proposition” (USP) gets you in the door and allows you to stay there by offering both emotional and logical reasoning to your prospect as to why they should do business with you.
A successful value proposition delivers:
- Specific features and benefits, sharing why a prospect should buy from YOU and not the competition.
- Acknowledges improvements that you can bring to the table, as it pertains to industry challenges
- a relatable case study example of problem-solution-outcome.
What is a value proposition and why do you need one?
In the game of insurance (or any industry, for that matter) a value proposition is a clear statement that explains how your product solves the customers’ problems or improves their situation. If done correctly, it can completely transform the profitability (prospect-to-close ratio) of your business.
There are two primary reasons why a company needs a value proposition statement. First, it makes the benefits of your products and services clear. You don’t want your prospects doing any work to figure out what you do and how it will aid them. Second, a solid value proposition demonstrates credibility and expertise, while developing trust. The less known your company is, the more a well-crafted, strategic value proposition statement is needed.
There are 5 primary elements that make up a strong value proposition statement
- It’s clear. Your value prop should be easy to understand by a phone call and apparent throughout your marketing collateral.
- It’s thorough. It communicates concrete benefits, features and the results a customer will get from purchasing your services.
- It sets you apart. A value proposition should show how you’re different or better than your competitors, often through industry expertise.
- It avoids the hype. Try to avoid statements like “I can save you 30%,” and superlatives like “we’re the best.”
- It’s concise. Your value prop should be understood in about 20 seconds to capture attention until you have earned more time to be descriptive.
With your value proposition statement, different is better.
When trying to formulate your value proposition statement, try to identify what differentiates you from the marketplace. You don’t have to be the best in every way. In fact, businesses will often make the mistake of trying to flood their value proposition statement with every feature and benefit that they can imagine. This approach results in a watered-down, ineffective strategy. As they say: “When you try to reach everyone, you end up reaching no one.” Instead, identify what truly differentiates your business from your competitors. Ask yourself, what do you offer that other agencies don’t? Do you have an online portal or other service features? Can you formulate features and benefits that relate specifically to a given industry? Here are some examples of some strong value proposition statements, particularly as it relates to industry-expertise:
- Safety groups in their industry with up to a 25% premium discount on the front end and an average of 50% dividend on the back end.
- Risk Audits for Manufacturers – We’ll examine things like insurance contracts, policies, and procedures, training programs, safety programs, conduct employee interviews and present our findings in one week.
After you have identified what sets your business apart, ask yourself: “Can I Prove it?”
If you say:
“We are the best broker in the country for cyber liability,”
will business flow to your company?
No, because the prospect doesn’t know you and has no reason to believe in such general, blanket statements.
Being the best isn’t enough. You must be able to PROVE your claims for the people to believe them using case studies, testimonials, and common sense.
Tying in Value Proposition to an Industry Niche: Case Study
Problem – Outcome – Solution
A contractor was feeling the pain from large premiums but was never advised from a risk management consultative perspective. We came in 7 months before their next renewal and helped them reduce their workers’ comp claim costs from $200,000 per year to $165,000 per year. We performed a risk audit over many months, reviewed their vendor agreements, interviewed their staff for safety compliance, and they were able to show the carrier the steps they took to reduce their risk through our assistance. This $35k savings offered a nice cash-flow boost when they needed it most.
In conclusion, consider your industry expertise to develop your value proposition. Attach numbers – what was the client’s premiums prior to your consultative attention, and what did you bring those numbers down to? Why were you able to do what the former broker did not? Identify your value proposition and transform your business!
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