Since the introduction of the Affordable Care Act, disruptions have managed to take shape in the form of technology, revenue and rhythm of business. These disruptions would not have come about had the ACA not exposed the flaws in which brokers handle their business, an industry consultant says.
Kevin Trokey, partner and coach at brokerage and advisory firm Q4intelligence, recently spoke in a webinar hosted by Maxwell Health about what flaws are still occurring in the benefits market and how they can be corrected in the post-ACA world.
“Prior to the ACA, [brokers] had a pretty consistent rhythm with both sales and service activities that went on year round,” Trokey says. “In a post-ACA world, we know fourth quarters focus on keeping the business we have. We spend too much time in third quarter preparing for it, too much of first quarter recovering from it and then all of the sudden discover our sales years have become dangerously short.”
Trokey adds that many agencies have become too dependent upon a carrier’s insurance product and because of carrier consolidation they are becoming more selective about which brokers they work with.
“If there has been a disruption in what you deliver to your clients and a disruption to how you get paid, we have no choice but to tear apart our old business models and replace them with healthier models where we are more effectively in control,” Trokey says.
The best approach
One model that can no longer function in a post-ACA environment is a commoditized model where the broker’s primary focus is pricing, low margins, high volume and plug-and-play producers where only large size brokerages will be able to compete.
Trokey says because clients are faced with many decisions around regulation, compliance and cost containment, a consultative model is the best approach because brokers focus on results, are paid a premium, have client selectivity and can offer a sophisticated team tailored to the employer’s needs.
“Those who choose to take a more consultative approach instead of competing on price will be competing based on the results they can bring to the business of their clients,” Trokey says. “Because those results can be so much more impactful than a simple price on a spreadsheet, [brokers] will actually be able to demand a premium for what they do for their clients.”
If an agency commits to a consultative model, they will then need to know who they serve, how they deliver value, how to communicate, what the power of their sales process is, where they are going and what challenges their clients are facing.
“Feared competitors commit to serving the needs of their clients,” Trokey says. “They sit down with their clients on a regular basis and have meaningful business discussions, not just insurance discussions.”
Insurance is a must-have for employers, but it is not always what the client wants from their broker or adviser. Trokey says insurance is one possible way to help a client, but it all depends on the employer’s choice and what benefits they see as the most valuable to attract, retain the best employees for their business.
“When we commit to helping our customers achieve what they really want, we absolutely have to help with insurance, but now there are countless other [products and services] we can bring to help them to help achieve what they want,” Trokey says.
The right steps
Knowing what the client wants cannot happen at the face to face meeting. Trokey says by the time a broker meets with a client face to face it is too late to determine their needs because the client is looking to purchase at that stage.
The first step in knowing what the client wants terms of benefit products and services begins at the marketing step. Create a message that can be seen on the company website, social media pages and advertisements.
Once prospective clients begin to see the messaging within the agency’s marketing, the brokerage must determine how to fill their pipeline with new clients.
“There have to be processes in place of how we run email campaigns and cold call campaigns,” Trokey says. “There have to be processes in place on how to go out and generate referrals from clients and centers of influence.”
During that pipeline process, those email and cold calling campaigns will give a sales team the chance to hear what these prospective clients needs are. This is called the documentation step.
“When you uncover more needs, you will be able to filter through and identify those that are most urgent,” Trokey says. “When you’re focused on the most urgent needs, you will be able to deliver the most potent plan.”
Having the clientele is only half the battle for a successful consultative model. Trokey says agencies need to have a vision of where they are going. Brokers need to understand what growth rate is expected, profitability of the firm, value proposition, resources available, what skills and behaviors are expected and responsibilities of each staff member.
“If you take the time to explain to the team where you are going, why it’s important to get there, how you’re going to get there, how they’ll be impacted and how they’re expected to contribute to the journey; then you will find the staff will stop fighting against your change initiative and they may actually start fighting with you to help put it in place,” Trokey says.
To keep the vision of the agency pushing forward, Trokey says having specific communications with groups to mark progression will help the business develop a rhythm.
Have weekly meeting with producers about their biggest successes, number of prospects added, number of prospects moved forward, and have them identify one take away for next week and one from the previous week as a closer.
Have an all-team meeting monthly to determine key performance indicators, recurring issues that can be corrected, take a deep dive into a specific issue that needs addressing and like the weekly producer meeting, have each team member confirm one take away.
Finally, a quarterly strategy meeting that consists of a KPI for all agency members, results from quarterly goals, track progress to annual goals and establish the coming quarterly goals and how to achieve them.
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