The psychology of choice in the insurance buying process
You would think that with all the choice that consumers have with insurance products today, that would translate into more sales. Unfortunately, consumers don't exactly feel the same way.
You see when we give options to our clients we are giving them control. People like options and they like being in control, however, if we give them too many options we can overload their decision-making process because consumers also want to fully understand their options.
When we give too many options we can create a state where the opportunity cost of picking the wrong product delays the customers' decision (sometimes indefinitely).
Have you ever been to a restaurant that has such an extensive menu it's hard to decide what you want? When the server comes by and you pick the first thing you see even though you're not really sure you want that at all.
If you can relate you're not alone. In a remarkable study by Sheena Iyengar and Mark Lepper studying buying patterns(of Jam of all things), they tested shoppers at an upscale food market with a display table with 24 varieties of gourmet jam. Those who sampled the jams received a coupon for $1 off any jam. On another day, shoppers saw a similar table, except that only six varieties of the jam were on display.
The large display attracted more interest than the small one. But when the time came to purchase, people who saw the large display were one-tenth as likely to buy as people who saw the small display.
So you may be thinking so what, I sell life insurance, not jam...
Well I'm sorry to tell you this is not about the product this is about the concept, and the rationale behind it is the same for life insurance as it is jam. The factor contributing to fewer sales was the opportunity cost of picking the wrong product. This stops consumers from completing the sale altogether because they are afraid they will pick the wrong one.
Infact the same study found the same results with retirement investment options too, as the retirement options an employee has increased, the chance that they will participate decreases.
So when we think about what we present to our clients about their insurance options, it's important to make sure we give options but make sure we are not overloading our clients with information. A great way to accomplish this is with a visual report.
Visual reports help communicate information because the brain is better designed to process visual information.
What more effectively communicates this message.
Need more evidence, check out these 13 reasons your brain craves visuals.
That's why at Life Design Analysis we're dedicated to helping you show the value of insurance products to increase revenue, save time and service your clients more effectively.
Turning mountains of paper into easy to understand sales concepts
Take this example let's say we have a customer who is new to insurance, they have gone out and done some reading on the different types of insurance. They want to see what it would cost them for term insurance and weigh those costs against permanent coverage.
Before we let them know there are 35+ Insurance companies in Canada and drawing up quotes for term, universal life and whole life as well as printing a forest of material that won't even help them understand how their insurance costs compare over time, consider a visual report that helps them easily identify how their options cost over time (like this).
Try our simple visual presentations for 30 days free with your clients and I guarantee you will have better satisfied and better-covered clients.
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