Understanding Why Clients Buy: The True Driving Factors Behind Purchasing Decisions

Why do clients buy a product or service? What is the driving factor behind their buying decisions? Many agents believe that price is the main factor, but in reality, it is not. Agents often fall into the trap of wanting clients to buy for reasons that benefit the agents themselves. We’re all guilty of this. I was guilty of it when I ran an agency. We think, “Oh man, I just need one more account this month,” or “I need one more account to get this bonus,” or “I really want them to close because it's a high commission and I need that commission coming in,” or “I think the client should buy this because it's a cheaper price.” We assume that clients will buy for the reasons we think are important.

However, here's the great eye-opener: People don't buy for your reasons; they buy for theirs. We need to understand what the client needs before we can offer a solution. The great thing about human psychology is that it's predictable. If we want to understand human behavior and the motivations behind buying decisions, we can study them. There's been ample research on this topic, and here's the truth: individuals make purchases to improve their relative condition.

About a year ago, I picked up this wonderful hobby called running. My wife is a big-time runner, and she always runs half marathons. She invited me to run a half marathon with her, saying, “Babe, when are you going to run a half marathon with me?” I replied, “Sweetheart, if I'm going to have one medal on my wall, it's not going to say 'half'; it's going to say 'full'.” So, I planned for a year to get into running and run a full marathon. The next day, I laced up my $20 running shoes that I usually work outside in, and I went on my first run. After that mile, my feet were killing me, and it was painful. I had blisters and sore feet, and I wondered why anyone would want to run. I talked to my cousin, who is also a big-time runner, and asked, “What shoes do you wear? There's got to be something; my feet are killing me in these tennis shoes.” He advised, “Go to a running store, and they'll scan your feet and fit you with shoes made for you.” He warned, “Be prepared to spend a lot of money because the shoes they fit you with will feel like you're walking on a cloud.” He was right! I went to the store, and they scanned my feet. When they brought out the shoe, I felt like Cinderella. It was a perfect fit and felt like walking on air. I purchased those running shoes without even considering the price tag. I didn't look online for other places with the same shoe. Additionally, the worker sold me running socks to prevent blisters. I wanted to improve my relative condition, and that's why we make buying decisions.

It's impossible for us to make a purchase that we believe will put us in a worse state. Psychologically, we don't do that. We make purchases because we perceive they will improve our condition. For insurance agents, it's easy to fall into the mindset that clients only want a cheaper price on insurance. We assume this for them and try to show them the lowest price. However, in human behavior, a lower price often implies a decrease in value. If clients perceive a decrease in value, it's hard for them to make the buying decision. We need to articulate what clients need and explain the coverages that show them that doing business with us will improve their condition. It will put them in a better state by doing business with us. To show this to clients, we must connect with them and understand their wants and desires. We need to understand what they want to protect to provide a solution and demonstrate how we can improve their condition. Here's another great truth: 86% of consumers are willing to pay more for a better customer experience and value.

If you're still having trouble with clients saying no, and they're not buying, comment with the words “more sales,” and I'll send you the three main objections any client might have. Yes, you heard me right, three objections that every client funnels down into. I'll send you those for free, along with how you can start overcoming those three main objections to help close more deals and help individuals improve their relative condition with your insurance product.