For most brokers, 2015 was not only a year of chaos but a year where you did more - for less. Think about all the hours you were forced to spend on research, education, compliance, planning and execution.
2016 is the time to change all that, and if you haven't begun to put a plan in place, you are quite likely about to be lapped by your competition. So what's the first step?
1. Stop being a "broker"
Twice a year I go to the dentist. Same dentist for 16 years. Once a year I go to the eye doctor (I wear contacts). Same eye doctor for over a decade. I have a guy who does all of my landscaping and snow plowing. Same guy since when I bought my first home. And when I need legal advice I call my lawyer. Same lawyer since when I started my first company.
You getting my point here? These are people I trust...I don't think about shopping them out or switching them year to year. We have built a relationship that allows me to not second guess their judgement.
Brokers get "shopped". Brokers are a "commodity". Brokers are "transactional".
The people that we rely on are specialists. You need to be a specialist - a trusted advisor and consultant. That's the first step to surviving 2016.
2. Don't sell insurance
Stop being a commodity. If you have a "Free Quote" button on your website, stop what you are doing and remove it NOW. If you need "free" to attract clients then you have the wrong client base. A few weeks ago I did a quick post about Anthem/BCBS slashing broker commissions. It’s a few states here, a few states there...then it's nationwide.
It's time to stop relying on carriers to be your only source of income. Selling insurance limits you to collecting a commission and being at the mercy of the carriers who will squeeze a quarter until the eagle screams.
Which leads me to the next step.
3. Expand your service offering and build a better toolbox
This doesn't mean that you need to spend a zillion dollars and invest in all kinds of software and personnel. Find strategic partners you can leverage when needed to enhance your portfolio. If you want to compete with the national firms and the disruptors like Zenefits, Gusto, PayChex, ADP and Fidelity, you need to be able to offer your clients the exact same services. Then you will still have something to offer that they can’t: human interaction. That trumps technology every time.
Quote"You need to be a specialist - a trusted advisor and consultant. That's the first step to surviving 2016."
4. Once you have evened the offering, you can move on to what I call "hooking" the client.
A few years back I went on a fishing trip in Cape Cod. Out all day, sun was beating on us. Seemed like every few minutes I would hear "fish on!" and by the time we reeled them in, we would be exhausted. Then mate hands me a rig with this strange looking setup. Sort of like a parachute with five hooks hanging off it. So I throw it out and give it some slack for a while before setting up.
After about 5 minutes or so those famous words rang out: "fish on”. Here I am reeling in the line for what seemed like an eternity. So long in fact, the mate was making fun of me telling me I needed to work out more often. As I got close to reeling it in, he grabbed the line and lifted it up out of the water. To all of our surprise I had hooked four striped bass on this one rig. First time the mate had ever seen it.
The process of "hooking" a client isn't much different. If you offer only insurance, it's easy to be looked at as a commodity, get shopped and lose the business. Take that same client and offer them benefits administration, HR consulting, strategic planning and ACA compliance support and now you've got five hooks. They are not even going to think about leaving you...unless you are not doing your job as their adviser.
Be proactive, stop being reactive. I truly believe that this industry is hemorrhaging opportunity for those who are prepared.
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