The secret to differentiation and building competitive advantage
Had enough of change and market disruption? Well, there’s more to come. The question is will you let the waves of change pound you into submission and wash over your practice, or will you embrace change, and turn it into a positive force to propel your business interests. For many of you, the answer is: possibly. And that’s because you have not pro-actively developed a business strategy to differentiate your business practice and sustain your competitive advantage.
What exactly are we talking about? Many of you are thinking that your competitive advantage is great service for your clients. Great service gets you in the game. It is not a differentiator. And it provides no marketing advantage. Did you ever hear a competitor boast: We provide awful service, and we are proud of it? Hopefully, that’s enough said to prove the point that’s being made.
No, you have to be more creative than that. What will make you invaluable to your clients? What will cause third-party centers of influence to recommend your services? Why will new relationships seek you out to become their benefits adviser? Be assured, it is not because you are the access point to products and services and you claim that you deliver great service. It’s got to be more compelling than that. You need to have unique processes that other brokers are not utilizing. You need to provide unique consulting services. You need to elevate your positioning to that of a “trusted adviser.”
So what are some things that can differentiate you and your firm? Well, a number of forward-thinking advisers are now offering benefit strategic planning as a service. They are helping their clients to create a written road map that guides all their major benefits decisions and expenditures. Those that are doing this are gaining market share. And they are charging for the service besides. New client relationships, improved client retention, and new revenue streams. That’s hitting the trifecta. Do you have a formalized process for accomplishing this? Equally importantly, does any benefits broker in your market advocate such a process? Then it can be your differentiator and competitive advantage, right?
What else can you consider doing? You can consider morphing your practice and developing new skills to become a human capital consultant that advises on a broad range of business issues and charges consulting fees. Think of things like self-funded medical plans, human resource consulting services, payroll, the intelligent integration of voluntary benefits, and the addition of executive benefits, just to name a few. But instead of handling this array of product and service offerings as a series of one-off, “widget” sales, try working with your clients to develop a master plan that addresses their critical business issues first, and recommend appropriate solutions that are responsive to their stated needs. Yes, you need to become more consultative and strategic in your approach. But you will uncover more client needs and more importantly remain relevant to your clients.
Along those lines, do you know what changes are on the horizon for all your clients? For example, do you routinely and systematically ask your clients whether they are contemplating acquiring or merging with another firm in the next six months? If the answer was yes, wouldn’t that be great information for you to have right now? So by asking a simple business related question, you can gain extremely powerful marketing intelligence. So how can that help you to differentiate yourself and lead to a competitive advantage? Let your clients know that you can assist them as part of the due diligence team when they are contemplating such a transaction. You can provide an audit of the other firm’s benefits plan and provide them a very valuable assessment of the claims’ trends and the anticipated benefits costs over the next two to three years. That will enable them to make an informed decision about whether to proceed. Or it could save them millions of dollars in increased expenses from these hidden costs. Performing this kind of service for a client will definitely make you invaluable, and you will be their “trusted adviser” right alongside their accountant, attorney and important banking relationships, all of whom will be part of the transaction process. That in turn, will impress these other trusted advisers and can lead to them becoming a source of referrals.