Are you wrestling with the need to increase revenues despite compensation compression? (Think commission reductions.) A number of benefits advisers are actively pursuing strategies to migrate a portion or all of their revenues to a fee-based consultancy model. What are you contemplating? Perhaps a strategic alliance is a solution that you can embrace and deploy in your local marketplace. Many advisers are realizing that in order to move up-market (larger size accounts), they need more staff, different skill sets, access to other product solutions and services, and different market perception about their "small" practice.
So how can you expand your capabilities and not break the bank? One answer is forming strategic alliances with "friendly competitors" or synergistic businesses that complement your firm's capabilities. And we are seeing more firms band together to: gain size and scale; share resources and capabilities; and alter how they market themselves to prospects that heretofore were not necessarily approachable. We have seen a significant increase in the number of firms that are contemplating strategic alliances, the creation of adviser networks, or even alliances with synergistic firms in other related, but non-insurance industries.
Before you decide who to align with, a central question you need to be asking yourself is: What critical client issues am I attempting to solve? If you cannot identify specific client issues that you are addressing, why do your clients need to do business with your organization at all?
In the age of exchanges, association plans, group co-ops, and a myriad of other hybrid options that are already legislated or emerging, it's simply not reality that your clients need you to access benefits.
You have to solve a critical human capital management issue. Or help the CFO to determine the ROI for offering an integrated benefits offering of employer-paid options, voluntary benefits, and developing a culture of wellness. Or become the confidant of the CEO who is worried that employee engagement is on a steep decline and he or she knows that they do not have the promise of significant salary increases as a motivational tool to increase employee productivity.
So what are the critical needs of your ideal target client? And what is your current value proposition? You have to be able to articulate this succinctly or your marketing message will sound like everyone else that says "we give great service." What will be the potential solutions offered by the alliance, including your firm, that are not available in the marketplace today? You need to transform your business practice and seriously be contemplating a break-through solution that is a game-changer.
Next, you need to be thinking about who are the early adopters for your innovative solution. After all, that's where explosive growth opportunities exist. So what types of employers have some unique needs that your firm, and your potential alliance partners, can address? What are the characteristics of those firms? Are they public sector agencies confronted with huge budget deficits? Are they private sector clients with significant challenges in attracting and retaining the caliber of talent that they need to run their business operations? What are the "lightning rod" issues that keep senior officers at prospective client firms awake at night? You really need to grasp that and make it actionable.
It's critical to know since that's the market you want to pursue. Because when you approach clients and prospective clients you will be perceived as an "insider" that understands their issues and provides valued counsel. That's ultimately going to be your sustainable competitive advantage. So you need to be thinking along these lines when contemplating a strategic alliance or joining a broker network. You do not want to be a product or service offering in search of a need. Instead, you want to address a critical business need and be perceived as a subject matter expert. Now that's a winning marketing strategy that solves your client's issues and advances your own business needs.
Reach Kwicien of Daymark Advisors at email@example.com.
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