Several years ago I asked a very bright teenager if he knew what he wanted to do when he grew up. He proudly declared, "I want to be a lawyer."
"You would make a great lawyer," I responded. "So what steps do you think you need to take to become a lawyer?"
He just stared at me blankly.
Recently, I learned he's selling electronics at a big-box retailer. He never even made it to college.
At September's EBA Summit in Dallas, MetLife National Medical Director and EBA Advisory Board Member Ron Leopold revealed results from MetLife's 2011 broker and consultant study, "Where Do We Go From Here? Prospering in a Post-Health Care Reform World." With serious concerns about medical commission cuts and maintaining top-line revenues, 58% of brokers and consultants are embracing two specific initiatives:
1) Becoming more consultative; and
2) Cross-selling more voluntary product
These are without question the two most effective changes a benefits broker can make to prosper in this difficult post-reform environment. In fact, these are exactly what I advise my broker clients to do, in order to differentiate their practice from the competition, to position their practice for transition to a fee-for-service model, and to generate meaningful new revenues.
Consult or die
The problem is, consultative selling and selling voluntary benefits are both dramatically new concepts for the vast majority of benefit brokers. A small number of progressive agencies - and the big houses - have been using a consultative approach for years. But most brokers and consultants haven't needed to be consultative in order to stay in business. However, those days are over. In universities, professors live by the axiom, "publish or die." In the post-reform benefits economy, brokers must "consult or die," their practice slowly - or perhaps not so slowly - dying of client attrition if they don't become consultative.
And what about cross-selling workplace voluntary benefits? If the big houses are in the forefront of consultative selling, they're bringing up the rear in selling workplace voluntary benefits. But they're in good company as the vast majority of benefit brokers have no experience with voluntary. And, to be fair, success selling these benefits requires a dramatically different sales approach than most group brokers are used to taking. But now, almost 60% of brokers and consultants have announced their intention to become more consultative and to cross-sell workplace voluntary benefits. Just like that.
Really? Well, as the story of the young man who never became a lawyer reminds us, any goal must have a realistic strategy, a road map that guides from point A to point B.
Not a product sale
Coss-selling workplace voluntary benefits the right way - the way that consistently sells cases and puts premium on the books - is a consultative process that puts you on the same side of the table with your client and solves difficult HR-related problems for the client.
Most brokers make workplace voluntary benefits a product sale. This is understandable, since their medical plans and ancillary benefits are product sales, because they're commoditized products sold almost exclusively on price. But voluntary is not a product sale . . . not if you want to sell HR on offering workplace voluntary benefits.
If you make workplace voluntary benefits a product sale, HR will respond with, "My employees don't use the benefits they have now" or "My employees can't afford your benefits" or "My employees don't want your benefits."
Whatever their objection, you're left having to argue with your client, never a winning proposition. Besides, you're unlikely to prove them wrong.
Solve, don't sell
The secret to selling workplace voluntary benefits to HR is to use workplace voluntary benefits to solve HR problems for the client. Don't present them as a product that HR must buy into, but rather as the funding mechanism for a valuable solution that HR needs and wants.
And, in these times of pinched HR budgets and having to "do more with less," your value proposition is sky-high since you can offer these workplace voluntary benefits-based solutions at no hard-dollar cost to the client.
"But," you ask, "what solutions do workplace voluntary benefits allow me to offer the client?"
Sometimes the benefits themselves are the solution. Here are just some of the more common solutions that the products can provide: freshen or enhance the benefit plan; fill gaps in the plan; shift costs; soften the blow of a "take away"; increase plan participation; improve retention & recruitment.
I can't expand on each of these solutions but let me discuss a couple, starting with filling gaps in the benefit plan. A voluntary short-term disability plan fills the gap between paid time off and the start of the LTD plan. And workplace voluntary benefits can fill the obvious gap represented by the deductible in a high-deductible health plan. With a $3,500 deductible, an employee can insure against the risk of having to pay the deductible with a $5,000 critical illness policy and an accident plan. The CI policy will pay the employee $5,000 upon diagnosis of heart attack, stroke or cancer, while the accident plan will pay all or most of the out-of-pocket expenses resulting from an accident.
One of the least understood aspects of voluntary benefits is just how valuable a workplace voluntary benefits enrollment can be to HR. Sometimes it's the enrollment services such as the benefit communication and sometimes it's ancillary services that the workplace voluntary benefits can pay for, such as benefit statements or a dependent eligibility audit.
Here is a sample of the solutions you can provide a client at no hard-dollar cost: improve benefit communication; update employee personal data & beneficiaries; boost plan participation; reduce plan costs by removing ineligible dependents; increase employee morale; and increase retention.
The one-on-one benefit communication between benefit counselor and employee can dramatically increase appreciation and utilization of benefits, boosting participation and morale. Employees excited about their benefits are less likely to leave the company, boosting retention.
"OK," you ask, "but how do I know what HR pain points the client has that I can help solve?"
Here's where you get consultative. You have to ask HR some strategic questions that will help you identify pain points that you can solve for the client. Here are some great questions:
"What about your job keeps you awake at night?"
"What are you getting pressure about from the CEO/CFO/owner/etc.?"
"What's the most difficult part of your job?"
"If you could wave a magic wand, what would you change about your department?"
Of course, you can't solve all of HR's problems with workplace voluntary benefits. But listen for pain points that these benefits can solve, knowing that you can offer a solution with no impact on her budget. Once you've identified a problem you can solve with workplace voluntary benefits, be sure to agitate the client's pain so that she is thoroughly uncomfortable with the status quo and is eager for a solution to remove the pain.
Transactional to consultative
Cross-selling workplace voluntary benefits as a solution and not a product sale moves you away from the typical transactional selling that until now has characterized the typical benefit broker. Helping the client identify and solve pressing HR problems is the hallmark of consultative selling. Become more consultative with clients and begin cross-selling workplace voluntary benefits by embracing the consultative approach to selling workplace voluntary benefits. You'll put more revenue on your top - and bottom - lines and you'll add value to your clients that you can leverage when it's time to move to a fee-based business model.
Griswold consults with carriers and agencies to develop effective voluntary benefits programs and expand their sales revenues. Reach him at (615) 656-5974, firstname.lastname@example.org or insurancebottomline.com.
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