Studies have shown that our brains prefer to take the easy path. We’re naturally engineered to save ourselves effort. And we’re also naturally wired to do things that make us feel good in the short-term versus the long-term. This is why so many of us spend too much time on social media or video games: They’re built to take advantage of our need for instant gratification, which can turn minutes into hours!
How does that relate to incentives for insurance brokers? It means that even though each broker wants to make sure their clients’ needs are met, some products require more time and effort to explain than others. Insurance brokers also have a choice of which companies or policies they recommend.
How can you, as an insurance company, help motivate brokers to focus on certain policies? That’s where incentives come in.
The multi-purpose role of incentives
Incentives can help break through our natural preference for the easy, which can translate to focusing on familiar and simple policies, by tapping into the desire for immediate gratification. Incentives are powerful tools for changing behavior. Think of how many times you haven’t been able to pass up a cookie to see a lower number on the scale at the end of the week. The cookie will taste good right now, whereas that weigh-in is days away. Who can wait?
Aligning incentives to your long-term strategy and goals is similar to treating yourself with short-term rewards while trying to accomplish something big. It could be rewarding yourself with a mini monthly shopping spree if you meet your daily workout goals. As you get in better shape, you’ll enjoy clothing that fits better. The short-term reinforces the long-term.
Let’s take technology as an example. You need your broker network to embrace a new customer relationship management (CRM) platform, which can be painful! One way to soften the stress could be to offer incentives each time your employees or brokers complete a training course. This is a win/win/win. The team gets extra training, the organization gets better customer tracking, and the customer gets better communications. All by providing a little short-term motivation.
Compliance is another “pain point,” similar to technology training. It has to be done and it makes the organization better. But it’s not always enjoyable. Yes, you may need to make it mandatory, but that’s not to say you can’t make it motivating by offering incentives, too.
Sales is the reverse. It’s something the agents want to do; in fact, they enjoy doing it. But again, some products take more effort to sell than others, especially new products. First there’s the learning curve for the agent, then they have to explain it in a clear and compelling way to prospective clients. And the back-end processing may present a learning hurdle as well. Incentives can take the sting out of selling new or complicated products by providing a short-term, tangible motivation to get to a long-term goal.
Incentives don’t only benefit the sales process for an individual agent. They can help attract and retain a talented workforce. Many people who work in sales are motivated by meeting and exceeding goals. Incentives show them they’re appreciated, while also showing that their ultimate goal is well within reach by breaking up large quarterly or annual sales goals into weekly wins.
Back to the training component. The more proficient and adept your team, the more attractive the environment for new talent. Since most people don’t love training (especially on technology or compliance), motivating them to gain that learning will put everyone on a higher level of competence, which in turn will attract more talented people.
Last but first, is the policy holder. Their expectations continue to increase as we get more accustomed to sophisticated technology in our everyday lives. After all, if my online store knows me well enough to make recommendations, shouldn’t my insurance provider know me, too?
This is where incentives can step in to relieve the tension between the reluctance of humans to learn new technology (in this case the agents/brokers) and the need for immediate gratification from the customers, who want a claim processed ASAP.
Ultimately, the whole purpose of insurance is to meet the needs of the customer. The more motivated an agent is to meet those needs with the right skills and the right products, the happier the customer. A happy policy holder is more likely to recommend your product or your agency, so why not motivate the team in the short-term to make customers happy for the long-term?
And one last note. When it comes to incentives, cash isn’t king. The Incentive Research Foundation (IRF) found that 83% of survey respondents view redeemable points as a treat and 80% said receiving points over cash rewards felt like getting a gift. The key is to line up incentives with goals, and to make sure your rewards in turn match your company culture and workforce preferences.