6 strategies to sharpen your insurance negotiation skills

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How good are your insurance negotiation skills?


Whether you’ve been an insurance agent or broker for 10 years or 10 months, one skill you’ve undoubtedly honed is the art of negotiation. When it comes to closing the deal with a prospective client, often your quick wits and your negotiation skills are the fine line between success and losing to a competitor. So it’s worth your while to continually sharpen your insurance negotiation skills.  Here are six strategies to consider, from Amanda Wiener at Hubspot and Katie Shonk at Harvard Law School.

  1. Zero in on WIIFM

WIIFM is “what’s in it for me.” Actually, we’re not addressing what’s in it for you, but suggesting here that you figure out what’s in it for your potential customer. Determine the ways they can benefit from your proposal. What do they need that you can help them fulfill? Spend time on your pitch, focusing on various solutions that can result in a win-win.

  1. Walk in their shoes

Now that you’ve determined their WIIFM, take it a step further. What are their priorities? What’s MOST important to them?

“Thinking about what matters most to your [prospect] can also give you an idea of what kind of questions he might ask,” Wiener states. “And you can prepare responses for those questions, gathering the data to support your answers in advance. That will also help you figure out which questions you want to ask during the negotiation.”

What kinds of value-added services can you provide, such as a risk management audit, training tools for their managers, access to videos, a sample employee handbook? While not key negotiation factors, these can certainly sweeten a deal, taking it from “stalled” to “active.”

Related: Juice up your insurance sales skills this month
  1. Flesh out “if-then” options

Wiener explains the “if-then” matrix: First, create a table with a column of “ifs” (the things you want but the prospect may say no to). The second column is “thens,” or the items that would become non-negotiable if the client refuses that “if.”

Here’s a brief, over-simplified example:

how to hone your insurance negotiation skills

Yes, it may sound like busy work rather than an opportunity to hone your insurance negotiation skills, but here’s the point: it causes you to create various options to work with, which increases your comfort level in negotiation. You’ve thought through the possibilities and can work in multiple scenarios.

This is the spot, Wiener says, where you also need to consider the BATNA — or, best alternative to a negotiated agreement. Regardless of how prepared you are for a negotiation, there may be times when you might not reach an agreement. What do you do then?

Know the answer to that question before you even enter the conversation — that’s your BATNA. And the more options you can dream up, the less likely you are to feel completely helpless if your negotiation stalls.

What factors will be at play if you don’t reach an agreement? What will the implications be for your prospects, along with your company and yourself? Ignore feelings of defeat to focus on what you can do, and the actionable items that come with it.

Try to identify issues that your prospect cares deeply about that you value less, or are less costly for you, says Shonk. Then propose making a concession on that issue, in exchange for a concession from your prospect on an issue you value highly.

“Remember: Negotiation isn’t an all-or-nothing process,” Wiener says. “Think about your interests, then determine your options based on the ones that are most important to you.”

Related: Hot sales tips for insurance agents
  1. Get creative.

The prospect may list their objectives: Reduce our current premium costs. Provide this list of extra services. Give us these additional perks. But the real question is not WHAT they want, but WHY they want those things.

“Try to focus on more open-ended things like goals and concerns,” Wiener explains. When you do, “you’re leading with the why — the underlying interests that are at the root of each side’s position.”

Fine-tuning your insurance negotiation skills in this instance will mean thinking outside the box: How can you deliver what they need without the cost (in time or resources) being prohibitive for you?

  1. Listen actively.

Resist the urge to tune out somewhat, thinking about what to say next while your prospect is talking. Instead, listen carefully to her arguments. Paraphrase what you understood her to say, to ensure you’re on the same page. Acknowledge any difficult feelings, like frustration, behind the message, says Shonk. Not only will you acquire valuable information, but your prospect may mimic your exemplary listening skills.

 Related: Top insurance agent sales solutions when the sale stalls
  1. Talk numbers.

However arbitrary it may be, the first number mentioned in a negotiation exerts a powerful influence on what happens next, research shows. It’s called anchoring bias.

In this scenario, you’re better positioned to be in the driver’s seat when you make the first offer (or offers) and trying to anchor talks in your preferred direction. If the other side does anchor first, keep your BATNA at the forefront of your mind, pausing to revisit them as needed, suggests Shonk.

There you have it: Six ways you can level-up your insurance negotiation skills this year, to help you close more deals. What other negotiation tips do you have?

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