If you were just starting out in the benefits brokerage business today, how would you organize your business? Its a perfectly legitimate question to ask yourself whether you own your business or you are a producer, consultant, or benefit adviser. After all, to remain relevant, you need to re-invent your practice now. And maybe this is the only way that we can get you to step back for a moment and evaluate what really needs to be done. So, what would you do?
Well first of all, at a strategic level, you would need to decide what your value proposition is. Why do clients need you as their adviser? What is it about what you do that is of value to your clients? Really, you need to answer this quite literally.
And right after that, you would need to decide what is your sustainable competitive advantage. What differentiates you and your practice from all of the other advisers in your marketplace? If you are struggling today to make your business successful in this very disruptive market, you likely are struggling to answer these very fundamental questions. And thats a very real problem. The only consolation, if any, is that you are not alone and you are in the majority. You need to decide to take action and delaying is not an option.
Beyond that, you likely would need to decide what types of clients you are going to pursue. What common characteristics will they have? Will they be in any particular industry sectors? Would you avoid certain sectors? What size employer will be your target market?
Determine your focus
Perhaps you are asking why this matters. Well, for example, if you were going to focus on small employers (less than 50 employees) you likely would want to align yourself with a quality, private exchange. You would need to be operationally very efficient. And you likely would also want to offer individual health coverages.
On the other hand, if you decided to focus on the mid-size employer market (100-500 employees) you would need to become much more consultative and strategic in your approach to employer and employee engagement. Your team would need expertise in analytics, plan design, self-funding, benefits technologies and a variety of other topics. I am over-simplifying to make a point, but hopefully you see the relevance and can apply this critical thinking to your circumstances.
How will you market yourself? How will you market your business? What marketing strategies will be most effective to reach your target audience? You need to decide what messages will resonate with the key decision-makers at your top 50 prospective client firms.
Listen, unless you were born into a very large family, the likelihood is not every client is going to be a relative. You cant rely upon every relationship being an uncle or a cousin. So how will you cultivate new relationships? How will you pro-actively pursue referrals? How will you develop centers of influence? You need to have very specific, repeatable strategies to accomplish these essential activities if you are going to increase your client base and generate additional revenues. And you will need specific strategies and capabilities to retain those clients even if there is executive turnover at that organization.
Depending upon how you answered some of these questions will determine the future of your business. There are very distinct implications that emanate from these issues which will determine the kind of capabilities, services, compensation structures, staffing requirements, expense considerations, etc. that you will need to consider. As you think about how you would build your business right now as if you were just starting in this industry today try to be honest and objective as you evaluate the possibilities. Think about what you would do differently, because your future depends upon it.
Kwicien is managing partner at Baltimore-based consulting and advisory services firm Daymark Advisors. Reach him at firstname.lastname@example.org.
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