Avoiding Replacement on Price. What's the Threshold?

Abrasax

Guru
401
If you have a company you prefer to work with, what's the additional premium you're comfortable with charging the customer monthly before you start to worry about being replaced by one of the cheaper offerings?

Even if you build value which justifies a higher cost initially, you know Ms. Jones may not remember that when another agent is offering to save her $6 a month. At what point do you see it start to fall off?

I know remaining competitive is important, but I'm thinking about the high side of competitive. Not the price busters, because most won't qualify and sometimes it's not worth dealing with unless you have to. Basically that price point that puts you right out of reach of having to deal with TransAmerica. :twitchy:
 
Can you justify the extra price to yourself? If you can you should be able to justify it to the prospect in which case you won't be replaced on price.
 
Can you justify the extra price to yourself? If you can you should be able to justify it to the prospect in which case you won't be replaced on price.

Would you even get into the extra price conversation? Over a few dollars?
 
No, only if you are getting replaced. But you would talk about why you picked that company.
I'm looking for that spot where replacement isn't very tempting for the customer. If I have to plan on extra admin time spent saving policies, I may as well write the cheaper plan with the pain in the ass carrier.
 
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I'm looking for that spot where replacement isn't very tempting for the customer. If I have to plan on extra admin time spent saving policies, I may as well write the cheaper plan with the pain in the ass carrier.
Yeah, but you are going to have to go save policies anyway. Nature of the Beast. Justify it in your own mind and you won't lose a battle, but there are agents who will start one anyway, even when their product costs considerably more.
 
I'd say within $10. Do you write somebody with American Amicable to get them on Social Security billing. Or a Company that's a few dollars cheaper that might be a few dollars less expensive but a higher lapse risk? If you're within $10 someone asked to come bye in the first 12 months to really undercut you.
 
I'm looking for that spot where replacement isn't very tempting for the customer. If I have to plan on extra admin time spent saving policies, I may as well write the cheaper plan with the pain in the ass carrier.

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I noticed you use customer and not client. May be just semantics or working FE leads. However, if being replaced on price on any kind of a regular basis is a problem. You are not their agent. You were just the last salesman they let in. Same is true of Term life which is a price driven product many times.
 
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