Price Vs. Value
If you’re in sales, you’ve heard about and possibly even been trained on the difference between price and value. But not everyone is in sales or goes through a buying process regularly enough to have been exposed to this idea. It is one we believe in and back 100%. It is how we have built our business to what it is and how we’ve gained the trust of our clients, some of whom have been with us for over a decade. We thought this topic would be a great one for a blog post.
In today’s world we are constantly being marketed to whether we realize it or not. We all know the jingles associated with the major companies and most of us know their slogans or tag lines too. In most cases, those slogans mention saving you money. Saving money is always great, who doesn’t want to save money? But is it always the right thing to do?
We believe in value over price. What this means is that we will never advertise that we offer the lowest prices on insurance because in almost every case sacrifices are made, corners are cut and services are dropped as the price goes down. This is why we would rather provide a tremendous amount of value to our clients than offer the lowest price.
Let’s start by defining the word price; “the amount of money expected, required or given in payment for something.” As you can see, the word price exclusively applies to money. As we said before, money is very important and saving it is always an attractive thought but we’re strongly recommending that you consider what you’re getting for your money. Not just when it comes to insurance but anytime you’re purchasing something.
Now we move on to the word value. When you look up the definition of value you will find six definitions when it’s used as a noun and two more definitions when it’s used as a verb. The definition we like the most is; “the worth of something compared to the price paid or asked for it.” This still applies to money but we see a very distinct difference when we look at this definition versus the definition for price.
What we focus on is “the worth of something.” The reason why we focus on this is because we strive to provide a service that has worth far beyond the price being paid for that service. In our case, we negotiate insurance policies worth x amount of dollars, paid to the insurance company which we make a commission from. We do not charge fees or service charges for the consulting we do, the advice we give or the time we spend working for each of our clients.
Rather than charge fees for our services, we rely on the commissions we make from our clients to pay our bills, the salaries of our employees and our overhead costs. We’re not the only agency that operates this way but we are aware of many agencies that charge fees when they issue certificates of insurance, provide quotes to their clients or potential clients, when renewing a policy or when their clients need something notarized.
Some agencies will limit the amount of time they spend on each client, maximizing the profit they receive from each one. We do not do this either. In fact, we almost always end up spending more time on our clients after the sale than we do during the buying process. The value we provide to our clients comes after the sale is made. We still strive to provide competitive pricing on insurance products but not at the expense of our clients.
Providing the lowest price in insurance, as with a lot of services and products, usually means something has been left out or there are exclusions in the policy that could come back to haunt our clients. If someone is left with uncovered exposures it could lead to a loss that forces them to pay thousands or even millions out of pocket. If the limits of liability are too low it could cause the same damage, the insurance company pays only up to a certain amount and sticks the client with the rest.
This is not a scenario that we are comfortable with. That’s part of the value we offer, we will not sell a policy if it leaves a client overexposed to uncovered losses. We’ve been in this industry long enough to know when a business, nonprofit or individual has holes in their policy that could be disastrous. We wrote a post about coverage gaps back in August which are the kind of gaps we’re referring to that could cause financial distress in the event of a loss, check it out to learn more.
Another form of value we offer is the expertise that we have developed through the years of experience we have. Doug has been in insurance for most of his professional life, Heidi has been with the agency for 19 years and Linda has been with us for nearly a decade, coming to us with an insurance background. We’ve seen more changes in the insurance industry than we can count but have always been committed to our clients’ wellbeing.
If you’re a business owner, decision maker for a nonprofit or an individual that is unsure of what your insurance policy is doing for you, contact us today for a free consultation. We’re happy to go over your policy with you to determine if you’re adequately covered at not cost to you.
Follow us on social media!
Did you like this post? Share it on your favorite social media site!