Logically, you know there’s not a significant difference between paying $99.99 for something and paying $100 for it – but the former just feels like better deal. Stores use the 99-cent trick to get people to buy, and even though we’re all aware of the tactic, it still works.
As an insurance agent, you might not be able to use this strategy, but there are other methods that can work. Simply put, how you present numbers matters. When discussing the cost of disability insurance with your clients, you need to be aware of how buying psychology can used for or against you.
Some people may be wealthy enough that cost doesn’t matter – but they’re probably not your prime disability insurance prospects.
Most people care about cost. In fact, according to HubSpot, almost six in 10 buyers want to discuss pricing on the first call. HubSpot also says that 35 percent of salespeople consider overcoming price objections to be one of the biggest challenges they face.
How Much Is Too Much?
You probably wouldn’t pay $50 for a gallon of milk.
According to the USDA, the May 2020 average price for a gallon of whole milk was $3.36 in the United States. If you wanted organic milk, you’d have to pay $4.01. $50 is obviously way too much.
Most people probably have a pretty good idea of how much milk should cost. They know when they’re getting a good deal, and they know when they’re being ripped off.
Selling insurance isn’t as straightforward. People often don’t know how much insurance costs. Sometimes they overestimate the cost – according to Life Happens, 44 percent of millennials think life insurance costs five times the actual price. Other times, insurance turns out to be more expensive than people expected. This can lead to price objections.
Price objections are common in disability insurance, but that doesn’t mean you have to accept defeat. If you’re getting a lot of price objections, it’s time to change the way you present your numbers. Pay attention to how psychology impacts your disability insurance sales success.
The Right Pricing Strategies
If you were in retail sales, you might use the 99-cent strategy or a big sale to get people to buy. You can’t do that for disability insurance, but you can use proven pricing strategies that highlight what a good deal paycheck protection is.
One of these is the high-low strategy. This pricing formula pairs the highest denomination value with the lowest denomination price. This technique is simple, but it results in more sales.
Want to learn more?
DIS is here to help you overcome price objections and close more deals. Get the DIS Traction Kit for more ideas to help increase your disability insurance sales closing ratios.