For more on industry networking, read these past articles:
« articles » By Zachary Schneiderman Insurance agent
The Dangers of Commoditization
insurance agents and mortgage professionals should band together when referring clients
Mortgage professionals have a lot in common with insur- ance agents. In the simplest
terms, they both provide a vast array of
products, and those products are available to their clients at a price. It’s only
in that very basic description, however,
that mortgage loans and insurance policies can be likened to commodities. The
policies and loan options that insurance
agents and mortgage professionals
respectively provide vary greatly, and as
a result, the prices vary greatly, as well.
Moreover, unlike finite commodities
such as gold or silver, mortgage loans
and insurance policies aren’t bound by
In spite of this, millions of advertising dollars are spent every year with
the intent of convincing consumers that
loans and insurance are purely commodities. The message being delivered
en masse to consumers is that mortgage and insurance professionals have
products to sell, prices to sell them for
and little more than that.
as a result, it’s often the case that
consumers believe product and price
are the only two things to consider
when looking for a home loan or insurance policy. The message that product
and price are all that matters prevents
consumers from seeing the truth: That
those two factors are less than half of
what mortgage and insurance professionals sell to their clients.
defining the problem
You need to look no further than a simple Internet search for the term “
mortgage loan” to see how commoditization
works. The top search-engine results
invariably include earmarks of an industry that has been commoditized.
Phrases like “amazing low mortgage
rates!” and “Get your loan now!” are
testaments to the fact that an investment in a home — and by proxy, a mortgage — is a decision that consumers
should make on their own, as one loan
appears to be the same as the next.
The notion that a consumer should
consult a licensed mortgage profes-
sional before making such a decision
does not appear until much farther
down in any search-engine query.
The same goes for the insurance industry. If you search for “homeowners
insurance,” top results often include
those encouraging consumers to “Get
a free quote online and see how much
you can save!” and “compare rates
online and save!” Like purchase loans
and refinances, many insurance products have been marketed in recent
years as if they’re commodities.
The effort put forth to convince people that price is king can have devastating consequences on consumers.
The transmitted message is that consumers simply should fill out a form on
the Internet and then communicate via
e-mail to purchase their loan or policy.
It’s often suggested that mortgages
and insurance policies are such run-of-the-mill purchases that consumers
shouldn’t worry about speaking with
a licensed professional who could undoubtedly dig a little deeper and possibly uncover additional savings or risks
that consumers may miss.
Of course, what happens if and when
something goes wrong with a given
purchase? Very often, consumers hold
the people who sold them their loans
or policies responsible. Unfortunately,
the people who assisted them in these
transactions may have never had a fair
shot at performing their jobs to the
fullest, as the nature of their positions
didn’t require it. The consumer’s demand for a quick response is met with
the online companies’ supply of hastily
offered loans and policies. In the process, the specialized service provided
by licensed, trained and educated professionals is removed from the equation — and thus we have a full circle of
Beyond products and price
Upon closer inspection, you’ll find that
specialized service isn’t the only thing
missing from the equation. Instead,
For mortgage originators and insur-
ance professionals, product and price
are only two parts of a much bigger
experience delivered to consumers.
Whereas product and price may be seen
as the tangibles of a mortgage loan or
insurance policy, a professional’s per-
sonal service and educated experience
can be thought of as intangibles.
When clients call and are personally answered or called back promptly,
you’re providing a valuable, personal
service. You’re providing personal attention and treating your clients as individuals, not just another sale. Quality
financial professionals demonstrate
that their clients’ concerns are their
concerns, and these professionals insist on personally making sure that
their clients’ needs are met in an expedient and efficient manner.
When you seek out continuing-education opportunities, you enhance
your ability to provide educated options to your clients. From helping clients discern what downpayment to
make to what type of coverage they
need to ensure that their grandmothers’ jewels are covered in the event of a
natural disaster or burglary, education
is one of the cornerstones of any financial professional’s career.
Similarly, the relationship that you
build with your clients is another intangible offering that can allow you to
stand out in a commoditized industry.
Mortgage and insurance professionals
can do this in a number of ways. From
asking your clients about their future
family plans to reviewing their overall
financial goals, you can assist in the
design of a plan that takes into account
much more than just price. Get to know
your clients; the stronger your relationship becomes, the better able you’ll be
to offer unparalleled service and opinion based on experience.
Building a relationship also allows
you to be proactive in working with
your clients. reach out to them before
interest rates increase. Take notes and
stay in touch, keeping your clients
abreast of what’s happening in your
field as it relates to them. In short,
take the initiative rather than reacting
to circumstances as they arise.
Caring for clients
These are just a few of the ways that
mortgage and insurance professionals
can help dispel the myth that getting a
home loan or insurance policy should
take no more than 15 minutes. Neither
mortgages nor insurance policies are
one-size-fits-all. These myths are only
symptoms of a much deeper problem,
however, and that problem is not that
large online lenders and insurers are cutting into broker and agents’ client pools.
The problem is that, when it comes to
making major life decisions, consumers
deserve to understand that their decisions should not be taken lightly.
The acquiring of a loan, the purchase
of a home and the protection of that
home and the items within are financial
decisions that will have a lasting impact
on your clients’ lives. as skilled professionals, mortgage originators and insurance agents are offering not only a
product and a price, but also personal
service, educated opinions and long-lasting relationships. as such, they owe
it to their customers to encourage them
to work with other licensed, service-oriented professionals. This means,
of course, that your referral partners
should be like-minded professionals in
their respected fields.
In short, the more that mortgage professionals and insurance agents work
together to arrest the growing commoditization of their industries, the more
informed their customers will become.
Together, they must recognize that the
price of their products is obviously important, but should not outweigh the importance of experienced suggestion and
direction, personal service, and the building of a lasting relationship. as a financial professional, it’s your responsibility
to make sure that you provide referrals
for services outside of your area of specialization, pointing clients in the direction of trustworthy partners — namely,
partners who strive to provide every client with a big-picture view of the investments they’re making and protecting. •
Zachary Schneiderman is an award-winning,
licensed home, auto, business, workers’ compensation and life insurance agent in Granada
hills, calif. For questions or comments, reach
Schneiderman at (818) 322-4744.
“finding referrals from realtors,” by allen Beydoun, December 2013
“create a Business-Development network,” by Eddy Perez, May 2013
“Use Technology to grow realtor referrals,” by Scott Schang, December 2012
“attract more Quality referrals,” by Derek Egeberg, June 2012
Findthekeysthat unlockHELOCrisk 41 Navigatethemarket’s shiftingwaters 73 Alookattheevents thatshaped2013 112
Trends: Weaveyourway throughtheindustry’s twistsandturns: Page27
TopOriginators2013: Ourcallforentriesiscoming nextmonth.Findoutmoreat scotsmanguide.com/TOlist.
view these articles and more at scotsmanguide.com.