Carefully Crafted Affiliations Can Help Retain Clients While Opening New Doors and Creating New Revenue Streams for Brokers and Agents
While the Insurance and Benefits Industries have always been highly competitive, there are a number of new factors making it more and more difficult to retain existing Clients and to add new Clients. These include:
·A shift from traditional "Outbound" marketing models to "Inbound" marketing strategies - including "Internet Based" Brokers.
·Reduced Commissions from Health Insurers and other lines - whether or not related to Medical Loss Ratios (MLR).
·Most Employee Benefits have become "Voluntary" requiring Education, Communication, Enrollment and Data Management.
·Greater demand by Insurers and Employers for added Services that produce no Revenues.
·Competition from traditional service providers who have become "Brokers", ie. ADP and Paychex soliciting and getting "Agent of Record" letters by discounting their Payroll and other Services. Note - This not considered "Rebating"!
While the above may appear to be creating the "Perfect Storm" washing Brokers and Agents away, it can also be viewed as an opportunity to "Ride A New Wave"!
It is time for various non-competitive "Sectors" of the Insurance and Benefits Industries to: Unite, Affiliate, Provide Expanded Services, and Better Compete. We suggest that Brokers and Agents aggressively structure carefully crafted "affiliations". The affiliations could include the following Sectors:
·A Traditional Broker/Agent for Core Benefits, ie. Health, Dental, Vision, etc.
·A Voluntary/Worksite Benefit Specialist offering Supplemental Plans, Programs, and Services.
·A Property & Casualty (P&C) Broker.
·An Enrollment Company or Service.
·A Payroll Service Provider or System.
·A Third Party Administrator (TPA) specializing in Flex Plans and Self Funded Plan Administration.
In the past the the above Sectors generally worked independently. The Business Owners/Employers were solicited by each Sector separately. The Business Owners/Employers contracted separately for each Plan, Program and/or Service. While these individual practices will continue, many Business Owners/Employers would appreciate an opportunity to bundle the Plans, Programs, and Services when offered by competent professionals.
When creating these affiliations, consider the following:
·Affiliates should first build trust with the other Affiliates!
·Affiliates should be dedicated to contributing to the success of the affiliation!
·Each Affiliate should agree to contact a fixed number of existing Clients to approach on behalf of the affiliation and include the other Affiliates in the meetings as appropriate!
·Affiliates should not be asked to shift away from their existing marketing models or sacrifice existing revenues!
·The affiliation should have an "Engagement Period" before getting "Married". Test the water!
·Affiliates should have an understanding that the Business Owners/Employees may not need the entire package offered by the Affiliates. Affiliates will be included per the needs and desires of the Business Owners/Employers!
·Each Affiliate should be party to a "Held Harmless" clause for the other Affiliates' activities!
·Affiliates should agree to jointly develop "Marketing Tools" to present to the Business Owners/Employers delineating the advantages of the bundled or unbundled Plan, Programs, and/or Services!
·Affiliates should present a consistent message as to the "Value Proposition" the affiliation brings to the Business Owner/Employer.
·Affiliates should create a model for distribution of net revenues derived on a case-by-case basis! An example of a successful model was based on the distribution of net revenues by the role played by the specific Affiliates. The distribution of revenues was based on percentages allocated by:
·The Affiliate who brings the Qualified Prospect to the table. In many cases this would be one of the Affiliate's existing Clients. Note - When an existing Client is exposed to the other Affiliates, the Affiliate should not be asked to share in the existing revenues derived from that Client.
·The Affiliate(s) who "Close" on the Qualified Prospect and make the sale on behalf of the affiliation for the Plans, Programs, and/or Services.
·The Affiliate(s) who implement the Plans, Programs and/or Services.
·The Affiliate(s) who provide ongoing required Services.
·Regular meetings should be scheduled - in person or by conference call - to discuss problems and concerns, discuss marketing, and to refine the initiatives.
·Each Affiliate should be dedicated to making the affiliated group Financially Successful!
Properly structured and maintained, the affiliations as described above will:
·Give the individual Affiliates a competitive edge!
·Help to Retain existing Clients for the Affiliates!
·Provide a Marketing Advantage to the Affiliates for Attracting New Clients
·Provide a "Value-Added" Service to Business Owners/Employers.
For Brokers and Agents to survive the current and future marketplace changes, aggressive actions will be required to create "Safe Harbors". Competitors, old and new, are moving quickly to capture a finite number of potential Clients. They may be targeting yours!
For additional information - Contact Phil at email@example.com - Visit www.benefitplace.biz or Call 216.577.5579. Our Goal is to Shorten Selling Cycles, Reduce Marketing Costs, and Increase Revenues for the Insurance and Benefits Industries!