Whether you’re a producer, sales manager or agency owner, you likely keep an eye out for anything that can improve sales or give you an advantage over competitors. In this blog, we’ll discuss how behavioral economics can impact your sales process, and how to use the concepts to win more business.
What is behavioral economics?
Behavioral economics might sound intimidating, but it’s a fairly simple concept. When it relates to selling, behavioral economics examines why people make unexpected or irrational decisions, rather than following predicted behavior.
Essentially, everyone is shaped by their past experiences, and that results in people carrying various internal biases. As example would be optimism bias, where someone tends to be overly optimistic (such as believing a sales deal will close even when there are signs it should be abandoned).
The impact to the insurance sales process.
Because everyone has their own set of internal biases, each producer may be subconsciously influenced by their own biases and experiences. That can cause salespeople to make decisions based on “gut feeling” rather than logic.
There are over 166 biases that impact decision making and behavior. As it applies to producers in your office, each producer could very well have several unique biases of their own—which means each salesperson navigates the sales process and makes selling decisions based on different standards.
Applying behavioral economics to your insurance sales process creates a more objective process, encouraging better, more consistent decisions. This allows your agency to:
- Standardize your insurance sales process, creating guidelines for how to move through the process most effectively
- Better measure progress and results (and help sales managers collaborate and assist individual salespeople more effectively)
- Help individual producers have more sales success, since they are relying on objective standards and not their own experiences/biases when making decisions
- Have more confidence in revenue forecasts, since you know that each salesperson is making sales decisions and moving through the sales process using the same standards
If this sounds like a concept that would benefit your agency, learn more in this free infographic, Boost Sales & Increase Revenue Predictability with Behavioral Economics. It includes further explanation on the benefits of behavioral economics, information on common biases that impact sales and buying behavior, plus guidelines for how to implement the concepts into your insurance sales process.