March 2009

Due to the intense competition and the intangibility of life insurance services, many insurers who previously viewed their products as a utility, now view their products, and coincidentally themselves as well, as a complex service to be marketed.  The dual goal is to satisfy customers while at the same time increasing profitability.  Relationship selling strategy resolves the contradictory tension between satisfying consumer needs on the one hand, and ensuring high levels of profitability on the other.  In order to implement the relationship selling strategy, the professional must understand the experience and needs of individual customers at both a personal level and a product level.  Our study focuses on mind-set segmentation in the world of life insurance as a way to improve relationship selling.  Our findings show that life insurance is an emotional experience.  We identified three distinct mindsets with different preferences and demands, respectively.  We suggest the shaping of mainstream life insurance policies using winning elements that will enhance acceptability and increase market share.  To retain customers, insurers should use appropriate messaging for each segment, to generate the relationship, repeat sales and, in turn, long term profitability.  This study extends the existing literature on segmentation and relationship selling by developing a method for typing by which insurance salespeople can identify a new prospect immediately, thus making the segmentation actionable at the local sales level.

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