How to Deal With Rate Shoppers

Everyone is a buyer?

I was speaking with someone recently and I asked if they ran into very many “rate shoppers”. They replied that most people they met with were just shopping rate so I asked, “What does the label ‘rate shopper’ mean to you?” Their reply was very telling. They suggested that a rate shopper wasn’t really buying but just checking out rates. They added that rate was the ONLY thing that mattered to the “rate shopper” and that if they didn’t have the best rate then they wouldn’t get the sale with these people.

Sounds logical, but when you really dive into it this person is missing a ton of opportunities with this attitude. Believing that most people are not interested in buying will affect this person’s sales process. If you know in advance that someone is not really a buyer then how hard will most of us work to get the sale? Not very hard. In fact, we’re likely to take shortcuts. We’ll talk rate too soon in the sales process before we have had any chance to build value in what we are selling. This strategy will actually increase the odds that the client will not like our rate because they haven’t heard why they should buy save for hearing the rate.

Everyone is a buyer
As consumers we rarely either have a need, or don't have a need. It's not usually an all or nothing situation where we are either going to buy or not. Usually, we are at varying levels of "need" for a product or service. At one end of the spectrum there is the person with absolutely no need. They don't want or need your product and they are not contacting you to make an inquiry. At the other end of the spectrum is the buyer. They are ready to buy, they have acknowledged a need and they are ready to make a quick decision. Most inquiries fall somewhere in the middle.

The scale below illustrates the varying degrees of readiness to buy:

10 - Client is buying from you
9   - Almost ready to commit; last few details to be completed before they are comfortable to buy
8   -
7   - Knows they need to buy something; actively seeking information, making inquiries and refining their product selection
6   -
5   - Moderate interest; starts investigation; may ask quickly about rates
4   -
3   - Slight awareness of need; maybe starts casually looking at websites; no formal inquiry at this point
2   -
1   - No need; not interested; not contacting you

The challenge when we meet someone is that we hope they are at a 9 or 10 on this scale and at the first sign of resistance (i.e. asking about rate) we assume they are at 3 or 4 on the scale.

Most people when they start shopping for financial services will start by asking about the rate. This is a logical place for them to start and most consumers will focus on price at the outset of any shopping excursion. Although it is tempting to label some inquiries as "shoppers" with the mindset that they are "not really buying" it's important to note that if they have contacted you then they are doing something. People don’t generally run around town collecting rates for no reason.
- They have a need
- Your company has an acceptable reputation
- The timing is right (most people are not that organized to go shopping for financial services months in advance)
- They’re not completely happy dealing where ever they are now (if they were, they wouldn’t be shopping).

They have started their buying process! It maybe at a lower section of the scale that will require more effort to close, but they have started their buying process and have already made a certain number of decisions in order to get to this place. Our job is to lead them through their buying decisions and treat them like the buyer they are.

Assume they are not buying and funny thing, you’ll probably be right.
So, what do you do with that initial rate inquiry? Respond to their question by asking some questions of your own. Get the focus off of rate and on to product. Your number one job is to make sure that when you do give them a rate, that it’s on the right product for their situation. Ask about what they are doing, why they selected the product they did, and what their overall goal is. You’ll be shocked how many answer and what you’ll start to realize is that many of those innocent rate inquiries that we are tempted to treat as an information request by someone that is not really buying, are actually very solid leads. And if our attitude and strategy is right, many of those shoppers will turn into buyers.

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