When discussing acquisition strategy with producers, I’ll often hear them say, “Yeah, we compete on price, but we retain on service.”
The fact they even make this statement is a sign they know price alone isn’t enough. Yet, they don’t take the time to build a sales process that takes the decision away from price alone.
Price is always a factor; however, in most instances in this industry it is the level playing ground. With precious few exceptions, brokers have access to the same carriers, same plan designs and same prices. By admittedly competing on price, brokers/advisers never give themselves a fair shot at earning new business. This is why close ratios and new business volumes in most instances are way too low.
At least when it comes to fully insured plans, isn’t getting quotes one of the most basic tasks a broker does? By “basic,” I don’t necessarily mean it’s easy, but being able to get quotes and negotiate the renewal is, undoubtedly, a minimum expectation that business owners have of their adviser.
In baseball, the tie goes to the runner. The “runner” in our game is the incumbent broker who will almost always win the spreadsheet game.
You retain on what?
Now, let’s talk about the “we retain on service” declaration. Once again, isn’t this just another minimum expectation a business owner has of an adviser? Don’t they expect you to fix problems, advocate on their behalf and respond quickly?
Now, put both of these back together. If a business owner was working with an adviser who wasn’t able to handle the renewal effectively or who didn’t provide good service, what do you think the owner would do?
No doubt, the owner would fire the adviser in a heartbeat. The owner would fire the adviser because he wasn't even meeting the minimum expectations.
Service PLUS
Some try to use a capabilities presentation as a tie-breaker. They accumulate a long list of “value-added services” (we prefer to call them non-insurance solutions) and drone on and on about all the extra stuff they provide their clients.
See also: Will COVID-19 Spur Life Insurance Sales?
Guess what? In today’s benefits’ world, that list of stuff is now part of the minimum expectations. If you don’t have the tools, don’t even bother showing up for the job.
Sure, you will occasionally win with the spreadsheet when going against a way-too-traditional broker. You may even catch the incumbent asleep at the service wheel and pick up an account that way from time to time. And, just maybe, you were an early adopter for that very solution an employer wants but hasn’t yet been offered. It does happen, just not often enough.
Don’t find a false sense of security from those occasional wins.
The universe insists on balance
Here’s the reality of client attraction and retention. You will lose every account the same way you won it. This happens because you train clients on how to buy based on the way you sell to them in the first place.
The most hypocritical of all are “spreadsheeters,” who are offended when a client asks other brokers to quote at renewal. Who do you think taught them that?!
Advisers whose value proposition is limited to the price of the insurance product and fixing stuff when it breaks are effectively saying, “Hire me because I can meet the minimum expectations better than your current guy/gal.”
A subtle but profound shift
We’ve already agreed, price is important. However, what is way more important than the price on the spreadsheet is an adviser’s ability to put together an overall cost control strategy. THIS is what should be discussed during the sales process. The spreadsheet is simply a lagging indicator (yes, I know underwriters are predicting future claims) of what has already happened. You should be competing based on your ability to develop a strategy that will help moving forward.
We also agree the non-insurance solutions in your capabilities binder are essential. However, just scrolling through the list of what you have to offer leaves you sounding like every other broker.
It’s time to dig into those solutions the way they were intended to be used. After all, you invested in them because they solve real problems faced by clients. Put yourself in the seat of that buyer. Do you think the buyer is more interested in listening to your we-have-it-too list of resources or in the list of problems they are struggling with that they need to solve? No-brainer, right?!
See also: Crisis Mitigation Beyond COVID-19
Don’t be lazy
This isn’t some profound insight, I know. However, most of your competitors are taking the lazy route to new business. Genuinely solving an expanding list of problems takes work. It is no longer enough to show up with a fancy spreadsheet, promises of better service and a capabilities presentation.
Make yourself the painfully obvious choice. Your new business acquisition strategy must be built on proving you can continually deliver better results than anyone else. When this is the way you acquire new business, when it’s the client experience you provide, you will find yourself losing fewer and fewer clients.
You can find this article originally published here.
