SALES LETTERS & INSURANCE LETTERS
Structure of a Sales Letter
A sales letter follows the selling process stages:
Attract attention
Create interest and desire
Win confidence
Motivate action
It overcomes buyers' objections like disbelief, perceived lack of need, risk
concerns etc. Each stage uses specific techniques.
Attracting Attention
Attention-grabbing openings use devices like proverbs, striking
facts/figures, stories, split sentences, conditional phrases, questions
related to the offer, commands, exclamations etc. They arouse interest to
read further.
Creating Interest and Desire
Describe the reader's problem vividly. Present your solution confidently.
Establish credentials briefly. Explain benefits addressing universal desires
like status, security, leisure etc. Use product name frequently. Hints of fear
of loss need care. Vividly describe benefits.
Winning Confidence
Present facts and opinions establishing your credibility. Facts include sales
figures, awards, certifications, trial offers. Opinions are customer
testimonials. Avoid excessive claims. Adopt a businesslike, rational tone.
Making Your Offer
Offer a discounted price, easy terms, and free gifts. Raise offer value by
adding benefits rather than lowering price. Give a strong guarantee
removing purchase risk.
Inducing Action
Scarcity incentives like limited time/quantity prompt action. Concluding
sentence precisely states the action to take. Easy response like a call or
card. Exclamatory imperatives are effective hooks.
Closing
Always include a postscript reminding of special offers and limited time
availability.
INSURANCE LETTERS
Insurance letters tend to be formal, but private companies' need for
customer relationships leads to less formality. Technical financial matters
must be simplified for non-finance readers. Effective insurance letters
require good product knowledge, understanding competition, and
command of writing principles.
Fire Insurance
In fire insurance, the insurer agrees to cover fire losses to the insured's
property up to a fixed amount during a policy period, in return for a
premium. Proposers give property details in a Proposal Form. If accepted,
a Cover Note grants temporary protection till policy issuance.
Premium rates consider physical hazards like building construction,
lighting/heating systems, occupied trade's fire risks, and location's
congestion and water availability. Insurers inspect premises and assess
moral hazard from the proposer's character and efficiency. An insurer's
letter quotes rates after inspection. Clients must inform changes in
property use affecting risk. The insurer then revises the premium.
Claims after fire damage are supported by required documents and
surveyed by the insurer's representative. The insurer verifies the claim
and settles it as per policy terms. Settlement considers depreciation and
under-insurance. Claims may be accepted, reduced or refused.
Marine Insurance
A merchant seeking marine cover writes to a broker with risk details. The
insurance company determines risk acceptability and issues the policy. It
needs details on client, conveyance, voyage, goods and packing, required
coverage, and insurance value.
Premiums are quoted after considering client reputation, voyage
route/length, conveyance, goods' damage risks and packing, and
extraneous risks covered. An open policy allows declaring multiple
shipments under its large coverage amount. The company informs when
the open policy amount is fully declared.
For cargo claims, the insurer verifies the cause and appoints a surveyor if
required. Claims may be accepted, reduced or refused based on policy
terms, documents furnished, and the insurer's own investigations.
Life Insurance
Life insurance provides investment, savings and family security. Premiums
are based on age, sum insured, policy term and type. Proof of age
determines applicability of age-related terms. Lapsed policies can be
revived by paying revival fee and due premiums. Hardship options include
policy loan up to 90% of surrender value or converting to reduced paid-up
policy.
Surrender needs original policy, age proof, bonus certificates and assignee
consent. Loans require the same plus loan fee. The insurer makes efforts
to dissuade surrender and default. For survival claims, the insurer asks for
needed documents. For death claims, the nominee initiates the claim
process. Scrutinized, justified claims are paid out.
BANKING CORRESPONDENCE
Banking Services and Customers
Banks provide many financial and security services like funds collection
and lending, safekeeping of money and valuables, share dealings, bill
payments, establishing credit etc. Customers range from financiers to
common individuals with limited banking knowledge. Nationalized banks
especially assist small businesses and weaker sections. Customers
approach banks for services, help and advice on financial matters they
may not fully understand. Lending conditions vary by location. RBI
regulations change as per economic policies. Bank letters need skills,
patience and banking knowledge. Language, explanations are adapted to
the customer.
Replying to Customer Enquiries
For enquiries about services like safekeeping, investments, loans etc, it is
best to invite customers for a personal discussion at the bank for suitable
arrangements per their needs. This avoids lengthy written explanations to
customers with limited banking knowledge.
Information on Customers' Creditworthiness
Banks provide customer credit information only to other banks, not public.
They give a general, non-committal opinion of creditworthiness on a
separate sheet, disclaiming liability. Customers' names, account details
are not disclosed. Precautions avoid legal issues in giving credit-related
information.
Requests for Loans and Overdrafts
Banks lend as per RBI regulations and policies, with priority sectors.
Borrowers need to submit security, documents like partnership deed,
board resolution etc. Securities include shares, goods, machinery, LIC
policies etc with steady value and liquidity. Loans are granted considering
creditworthiness and suitability of security. Customers are informed if loan
requests are approved or refused with reasons.
Replying to Customer Complaints
Complaints arise from misunderstandings about banking services. Banks
clearly explain their position and applicable arrangements. They may
suggest alternative services to meet needs. Tactful, courteous
explanations maintain goodwill.
Letters about Overdrawn Accounts
Valued customers may occasionally overdraw. They are promptly informed
to deposit required amount and arrange overdrafts. Recurrent
overdrawing without arranging overdrafts elicits warnings to maintain
balance or checks will be dishonoured. Severe overdrawing leads to
account closure.
Dishonour of Cheques
Customers are immediately informed if cheques are dishonoured due to
inadequate funds. Recurrent dishonouring necessitates stronger
communication.
Closing Accounts
Unsatisfactory account operation - insufficient balance, overdrawing
without overdrafts, frequent stop payments - leads banks to request
account closure after due notice. Deposits and withdrawals are halted by a
specified date.
Overdraft and Loan Accounts
If overdraft facilities remain unused for long, banks may close them as
funds get blocked. For loan accounts, banks may recall part of the loan or
ask for additional security if existing security depreciates substantially.
