A few weeks ago, I spoke at a Silicon Valley Association of Health Underwriters conference where Zenefits CEO Parker Conrad took questions from the audience. He had an interesting response to a question that reminded me of a 2009 article I wrote: Xbox The Future of Employee Benefits Customer Service. He was asked if he provided any face-to-face service. He responded somewhat tongue-in-cheek by saying that he did, as long as they could walk to the meeting.
Of course that got a chuckle from the audience. I dont remember his next comment word for word, but he followed that by saying that most brokers assume that providing service via the phone and/or Web conferencing does not yield the same result as an onsite visit. He totally disagrees with that premise. He believes that centralized services using the latest technology can actually provide a better result. To most brokers, this is turning the benefits business on its head.
Also see: "Why brokers must move out of their 'comfort zone.'"
Many benefit brokers live by the idea that face-to-face onsite service is the only way to provide quality service. Certainly that is one of the advantages a local broker has, being local. But times change. Web conferencing and even high definition Web conferencing is now readily available to even a small business. Consumer behavior has changed, too. Some CEOs and others find it acceptable to meet via the Web. Some may even find the company that can do this to be more forward thinking or technologically advanced. Others will see Web conferencing as being more cost conscious. Millennials have no problem speaking to others via the Web, smart phone, text messaging or chat. It is becoming more commonplace.
Onsite service also has a capacity problem. Imagine I am a national brokerage firm that has a highly skilled actuary or underwriter on staff. If that actuary were to drive one hour out to meet a client, meet for an hour, and then drive back, that one meeting would take three hours. During those same three hours, that same actuary could attend three web meetings. In this example, onsite service is three times more expensive than a Web meeting. Imagine if the client were getting billed for that time.
In my 2009 article, I used selling voluntary benefits sales as another example. Insurance buying events such as getting married, having a baby, buying a house, happen every day. It is simply not possible to be face-to-face for everyone when they have a need. Setting up an automated sales/service center can result in more sales.
Leveraging the latest technologies
The benefits business is seeing commissions being cut in many markets. I have a feeling this trend is far from over. Imagine if you had to build a business for a future benefits world where revenues were lower or you had to compete with other brokers on a fee-for-service basis. You would need to build a business that leveraged the latest technologies to improve operational efficiency. You may want to help your clients leverage technology so they too could be efficient in managing their HR and benefits, reducing manual service demand.
Employees in this new world would have ready access to such needed information via the Web and mobile. They would be able to speak with a benefits broker face-to face via mobile or Web. In this new world, you would be able to deliver state-of-the-art technology and high-quality services to more customers at a lower cost. If you were to do this, you would be building a business model like, well I guess, Zenefits.
While onsite meetings may not go away, it is naïve to think that another company could not deliver a similar level of service and advice via the Web and mobile using technology. Brokers fixed on old beliefs will be surprised when they get a BOR where the other broker has no local representation. It is happening today and will become more common in the future.
Markland is a principal of HR Technology Advisors and past president of Benefits Technology Group (BTG). HRT is an insurance and technology consulting firm focused primarily on helping insurance brokers, companies, third-party vendors, and their customers, with evaluating and implementing technology solutions and e-commerce strategies.
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