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Balancing sales techniques

Emerging Insight #:


Date of Release:

  July 7, 2016


  Financial institutions, Sales, Promotion, Consumer education, Agriculture


  Working paper: "Responsible Bundling of Microfinance Services: A Mixed Method Evaluation of the Impact of Timing, Pressure, and Information"

An effective mix of sales tools leads to high uptake for a bundled crop insurance product

Bundling insurance with other financial products has considerable potential to reduce costs and increase the reach of insurance. However, it can be difficult for loan officers to explain both a credit product and an insurance product, especially for more complex products, such as crop insurance. This issue was recently explored as part of a study carried out by the Microinsurance Center and EA Consultants, with a grant from CGAP, on a crop insurance product bundled on a voluntary basis with credit by the microfinance institution, Crezcamos, in Colombia.

Crezcamos’ loan officers were trained to sell a crop insurance product and were equipped with a standardized approach to selling the complex product. This approach involved a range of tools, including a video, a worksheet, key talking points, and guided answers to common client questions. Loan officers generally appreciated, remembered, and used the tools and protocol.

Each tool was designed for a specific purpose. For example, the video placed more emphasis on providing information about product details (e.g. coverage, price and benefit amount) than on marketing. This choice was made on the assumption that loan officers are adept at finding creative ways to sell products, appealing to their clients at an individual level. However, because they are not insurance experts and because their primary focus is sales, they may not always be adept at explaining the details of a relatively complex insurance product. Qualitative interviews suggest that product details explained in the video were more likely to be understood and remembered by clients than when this information was relayed by a loan officer.

As a whole, qualitative interviews suggest that the standardized approach was effective in helping clients to understand the product. Immediately after viewing the video and hearing the loan officer’s explanation of the product, clients could explain the basic features of coverage, including the events covered, the damage their crop must suffer to be eligible for a claim, the approximate price, and the coverage amount. Some were able to explain more complicated features. Furthermore, 23 per cent take up was achieved, a good result for voluntary crop insurance sales.

This study suggests that understanding can be tackled with a range of appropriate and informative sales tools, and that even farmers with low levels of education and knowledge of insurance can understand the main features of a relatively complex product.

Find out more in the full study, "Responsible Bundling of Microfinance Services: A Mixed Method Evaluation of the Impact of Timing, Pressure, and Information".